NEW HAVEN, Conn. (April 5, 2002)—Pirelli S.p.A.'s tire unit will resume responsibility July 1 for the sales and customer service of the Pirelli brand in the U.S., altering a distribution alliance Pirelli has had with Cooper Tire & Rubber Co. since 1999.
Cooper will continue to manage logistics support for Pirelli and manufacture selected lines of Pirelli products for sale in the U.S. The parties said the transition with regard to Pirelli dealers will be handled with a minimum of change or disruption so that customer service will not be affected
Both companies will investigate the possibility of Pirelli's international group supplementing Cooper's performance tire product offering by manufacturing selected ultra-high-performance sizes or lines.
Pirelli and Cooper announced their distribution venture on Feb. 12, 1999, saying they were joining forces in the Americas in an effort to boost sales and cut costs.
The deal called for Cooper to take over sales and distribution of Pirelli passenger and light truck tires in the U.S., Canada and Mexico, and for the companies to cooperate on raw materials purchasing. Cooper said at the time that adding the Pirelli brand to its product range would help it gain a position with larger retail chains and solidify business with existing customers.
Pirelli, meanwhile, expected the arrangement to lead to a doubling of Pirelli brand tire sales in North America—to $400 million or more—in two to three years. Instead, sales have remained at about the $175 million level.
A Pirelli spokesman said few sales through the arrangement had taken place in Canada and Mexico.
The two companies said they restructured the agreement in order to improve the competitive strength of both companies. While the results of the alliance were generally positive, it was agreed that a new approach would be beneficial in pursuing separate brand strategies, the companies said in a press release. Both companies will continue to consider themselves partners in technical and related matters.
D. Richard Stephens, Cooper Tire's president, and Francesco Gori, general manager of Pirelli's tire business worldwide, expressed satisfaction at the new arrangement, which will be finalized shortly.
“Our companies have learned to know and appreciate each other since the beginning and are looking forward to a new and different phase of our alliance which will benefit customers for both brands,” they said in a joint statement.