MILAN, Italy (Nov. 4, 2010) — Pirelli & C. S.p.A. will build a $210 million car and light truck tire plant in Mexico in the coming two years in large part to support projected growth for high-performance tires in North America.
The investment is part of Pirelli's five-year industrial plan, which calls for the Italian tire maker to focus on growth in the world's expanding markets, notably Latin America and Asia-Pacific. Pirelli is budgeting $2.65 billion globally over five years toward modernizing its manufacturing capacities, with a goal of ensuring 60 percent of equipment is less than 10 years old.
The new plant in Mexico will come on stream in 2012 and ramp up to its full annual capacity of 5 million units by 2015, Pirelli executives said today at a presentation of the five-year plan in Milan. Employment should hit 700 at full capacity. It will be built at an as-yet undisclosed location with Pirelli's “latest production technology.”
Some of the production will supply the domestic market, but the bulk of output will be destined for the U.S. and Canada, Pirelli said. Adding this plant will free up some production capacity in South America now dedicated to supplying North America to local market.
Pirelli said the decision supports its strategy to focus on the premium consumer segment in North America, where management expects to report 8-percent annual sales growth through 2013 to about $725 million and achieve double-digit operating income margins.
The plant will be Pirelli's second in North America, ninth in the Americas and 20th worldwide.