NEW YORK—Pirelli Tire North America Inc.'s new chairman and CEO, Pierluigi Dinelli, has a list of strategies to achieve his goal of growing the Pirelli brand in North America.
Among the items on his “to-do” list are:
c Develop a wider range of products dedicated to the market, especially light truck tires (See related story on page 25);
c Focus on a consistent strategy to strengthen the partnership with customers;
c Increase production at the company's Silao, Mexico, tire plant; and
c Overall, increase the Pirelli brand presence in the U.S. market.
“In order to grow our presence and our market share, we need to have product available,” Mr. Dinelli told Tire Business at the recent New York International Auto Show.
Mr. Dinelli, who took over the helm of the company's NAFTA region in January, wants to improve the tire maker's fill rates and expand its fitments portfolio in the U.S. and Canada through a boost in production at the the Silao plant, which opened in 2012.
“In order to grow, we need to boost production,” he said.
The plant has been ramping up production steadily, increasing the number of units by 1 million over its 2014 annual rate. Next year the plant will increase its annual output by another 1 million units, he said.
Nearly all the units produced are shipped to the U.S. and Canada, he added, split 50/50 OEM/replacement market. He noted that the plant is receiving increased orders from car makers that prefer the Silao plant's modern equipment and proximity to the U.S.
But boosting output won't be enough. Mr. Dinelli admitted the company also needs to expand its range of products and vehicle applications—particularly for light trucks and all-terrain vehicles.
“Our range is not so deep on different sizes,” he said. “To increase the breadth of our range, we need to develop more,...we need more products in the American market.”
Since Pirelli's share of the North American market is small, “our biggest effort will be to grow our share of customers.” Mr. Dinelli acknowledged the company needs more significant growth of product range.
“If we are missing segments, we can't grow our customer accounts.”
He said Pirelli is focusing on product development of all-terrain tires for off-road use and plans to launch applicable tires in mid-2016. “That should give us a big boost,” he said.
The company's focus now is promoting its new Pirelli P Zero All Season Plus, a tire developed specifically for the U.S. market. The company's biggest challenge, he said, is to increase sales of that tire in the second half of the year.
To spur sales, the company recently unveiled its largest marketing campaign to date in North America with the launch of a dedicated interactive website, dubbed “HighwayZERO”—at www.highwayzero.pirelli.com—to promote the new P Zero tire.
The company is increasing its social media marketing efforts, as well, but has no plans to sell tires directly via the Internet.
“We do not foresee opening up Internet sales.... We have so much space to grow in the traditional market that we want to avoid conflicting with our dealers. It isn't going to be beneficial for us to go online,” Mr. Dinelli said.
“The Internet is an extraordinary vehicle,...but we want to be a producer and leave the market to the traditional tire dealers.”
He noted that in the past the company tried to sell tires, particularly motorcycle tires, online in other countries, but “honestly, it had never been successful...,” he added. “We don't want to do it in the U.S.”
Accordingly, Mr. Dinelli reiterated Pirelli's commitment to the “traditional” type of tire dealerships—stressing that the company will not operate company-owned retail outlets or market through mass merchandisers.
“We are satisfied with our customer base,” he said.
Pirelli is “extremely satisfied” with its FasTrack associate dealer program launched in 2013, Mr. Dinelli said, noting that about 900 dealers have joined the network.
“We are satisfied with the program. The program has grown rapidly,” he said, reiterating that the company needs to also invest more in supporting its dealer network, including promoting its products.