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March 01, 2018 01:00 AM

High-value tires lead Pirelli growth plan for 2018

Shahrzad Pourriahi, European Rubber Journal
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    MILAN — Pirelli & C. S.p.A. aims to further increase sales of high-value tires, under a growth plan detailed during the release of the company's fiscal 2017 results.

    The plan builds on Pirelli's relaunch last year as a premium consumer tire (passenger, SUV, motorcycle) supplier after separating its industrial tire business into what now is know as Prometeon Group.

    Under the latest plans, the company is targeting the conversion of 7 million units of "standard" car tire production to higher value-added production, including increased penetration into the SUV sector.

    The plan also calls for improvements to the firm's product mix, including phasing out "legacy brands" in Russia (Amtel, for example), pruning the number of lower rim sizes in Europe and South America and limiting low value OE contracts.

    In Russia, Pirelli aims to improve its share in the 17-inch rim diameter and bigger market, "with an increasing weight of locally produced high-value tire" along with strengthening its price position in the region.

    In the Middle East, Africa and India region, Pirelli said it would look at "progressive reduction of standard production" and increase the proportion of high-value product sales, which already exceed half of sales in the region in 2017.

    Pirelli previously outlined four categories of high-value products it's pursuing:

    • Prestige, developed with car makers such as Ferrari, Bentley, Bugatti and Rolls Royce;
    • New premium tires with rim diameters of 18 inches or more;
    • Speciality tires, including runflats and color editions; and

      Premium high-end motorcycle tires.

    Another achievement in 2017, according to Pirelli, was its progress with integrated OE/replacement business management.

    The Milan-based company said it "successfully redesigned" the management with first pilots of predictive/forecasting tools showing "encouraging results."

    The company's digital transformation efforts include establishing a centralized plant-planning function working with new digital tools.

    The prestige business unit, Pirelli said, "bore its first fruits" with increased OE market share, and a new customize-to-order supply chain was activated for color edition.

    For 2018, priorities will include reengineering and consolidating the "integrated business planning process," starting from Prestige, Pirelli concluded.

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