LAS VEGAS—It's the end of the road for the Armstrong brand. Nearly nine years after the Pirelli Group acquired Armstrong Tire Co., Pirelli Armstrong Tire Corp. is eliminating the brand from its lineup.
In its place, the company will introduce a new brand—Formula—which it will market as a package with the Pirelli line. Formula will not be sold as a stand-alone brand, the company said.
PATC President Giovanni Ferrario announced the decision to discontinue Armstrong-brand pro-duction during an address to 200 tire dealers attending the company's 1997 North American Business Meeting, Jan. 14 at Caesars Palace hotel in Las Vegas.
Also at the meeting, the New Haven, Conn.-based tire maker unveiled two new tire lines: the P6000 Sport Veloce, targeted at the growing all-season high performance market; and the Scorpion A/T, aimed at the burgeoning light truck tire market.
Elimination of the Armstrong brand, which entails a full line of passenger and light truck tires, is part of the company's three-year plan to grow the Pirelli brand in North America. Loss of the brand also will result in a new name for the company, which eventually will drop ``Armstrong'' from its nameplate. The new name still is undecided, Mr. Ferrario said.
In existence for 85 years, the Armstrong line will be phased out over the next six months to allow dealers to adjust their inventories.
Henceforth, PATC will concentrate 100 percent of its efforts on selling Pirelli brand tires in North America, using Formula as an entry-level line, Mr. Ferrario said.
A full line of Formula-brand passenger tires, from 80-series to 60-series sizes, and a line of light truck tires will be offered. Dealers should begin seeing Formula brand tires by late spring, according to Franco Carini, PATC vice president of marketing.
The tires will be made at PATC's lone North American tire plant in Hanford, Calif., as well as at Pirelli plants in other countries.
PATC shut down its only other North American tire plant, in Nashville, Tenn., last November.
Mr. Ferrario said the company has increased production capacity at the Hanford plant to the point where it now makes nearly as many tires as did Hanford and Nashville combined.
In cutting Armstrong, Mr. Ferrario noted the brand no longer held a strong image in the marketplace. He attributed this, in part, to PATC's favoring the Pirelli line whenever the company experienced production shortfalls.
``Whenever there was an availability problem, Armstrong was hit by that,'' Mr. Ferrario said.
Also, for strategic reasons, PATC no longer wanted a second stand-alone brand in North America and is not in a position financially to rebuild the line's image, while promoting the Pirelli brand.
Mr. Ferrario admitted the company had made mistakes in managing the Armstrong brand, but that Pirelli had no regrets in buying the company, which he said has helped further establish Pirelli in North America.
``Still, when you give up a brand after eight years, it's not been a success story,'' he said.
In marketing the Pirelli line, Mr. Ferrario favors what he called a vertical brand strategy featuring a single brand, rather than several lines, as has become popular with some other tire makers.
Having so many brands and sizes is difficult for the tire dealer to manage, he said. Instead, PATC will provide dealers with a full range of Pirelli tires in a package that includes Formula tires at the low end. ``We understand you need an entry line and broad line to give profitability,'' he told dealers.
Dealers attending the meeting had mixed reactions regarding the demise of the Armstrong brand.
Roland Lesieur of Maynard & Lesieur in Nashua, N.H., was surprised and called the decision a ``serious mistake.''
``Armstrong is still a recognized name. . . ,'' he said. ``It should definitely be retained.
``We know we can sell (tires) under the Formula name,'' he added, ``but we feel it would be an easier sell under the Armstrong name.''
However, Bill Bloomfield of Eurotire in Fairfield, N.J., thinks ending the line will have little impact. ``To my customers, the (Armstrong) name doesn't mean anything,'' he said. ``If they are looking for something with a lower price and I tell them it's a Formula made by Pirelli, it's the same thing as telling them it's an Armstrong brand made by Pirelli.''