Pirelli targets U.S. market with investment in Mexico

SILAO, Mexico — Pirelli & C. S.p.A. is doubling down on its commitment not only to North America, but to its plant in Silao.

The Milan-based tire maker said it is investing $113 million over the coming two years into its Mexican factory primarily to boost capacity for larger-rim diameter tires and tires for electric vehicles that will be sold in the U.S.

This latest investment is in addition to $15 million Pirelli announced in early March and $36 million pledged in late 2021.

The upgrade will increase production by more than 1 million tires a year, Pirelli said, to 8.5 million units a year from the current 7.2 million, and create 400 new jobs by the time it's completed.

When the expansion is complete, the plant will have a production area of 2.24 million square feet, up 172,000 square feet from the current footprint. The plant's employment will rise to 3,200 at full capacity, Pirelli said.

The announcement of the upgrade comes on the 10th anniversary of the commissioning of the Silao factory.

Among the dignitaries attending the event were Diego Sinhue Rodríguez Vallejo, governor of the Mexican state of Guanajuato; Luigi De Chiara, ambassador of Italy to Mexico; Claudio Zanardo, president and CEO of Pirelli North America; and Paulo Benea, and CEO and general manager of Pirelli Neumaticos SA Mexico.

Marco Tronchetti Provera, executive vice chairman and CEO of Pirelli, said in a video message the plant has contributed to "the success of Pirelli's global strategy of becoming the leader in the high-value segment."

He said expections were high when Silao was chosen as the site of the plant. "Today I am happy to say that we have achieved our goals and that the factory and the people who work there have exceeded our expectations. In fact, the Silao plant is one of the most technologically advanced in the group and will soon host a new Pirelli R&D Centre.

"As we have for 10 years, we continue to strongly believe in Silao and its people."

In early May, Pirelli revealed plans to build a technology and digitalization hub for production at its factory in Silao in a bid to implement Industry 4.0 principles and strengthen the "innovation ecosystem" at the facility, budgeting $15 million for the project.

The hub will be housed in another 71,900-sq.-ft. expansion of the factory premises.

The investment affirms Pirelli's desire to grow its share of the North American market. Earlier this year, Zanardo told Tire Business that the company will continue to pursue "segments most important to us," including 18- and 19-inch rim diameter tires that are "growing in the market" as well as the burgeoning EV tire market.

"It's the place where we want to compete," he said.

Zanardo reiterated that during the Silao expansion announcement.

"North America is becoming more and more important for Pirelli," he said. "We are investing a lot in the region. We are developing products that answer to the specific needs of this market. We are opening local R&D centers, to further increase the level of technology and innovations of local products," he said.

Once the capacity increase is complete, he said those products will be available in the entire North American market.

"We want to provide our local customers with the right products for this market, at the right time, with the highest level of service," Zanardo said.

Pirelli recently introduced the WeatherActive, its first tire with all-weather capabilities; the Scorpion AS Plus 3, a new redesigned touring all-season tire for light trucks, SUVs and CUVS;, and the P Zero All Season Plus Elect, its first replacement tire developed specifically for electric vehicles.

Each of those products are manufactured "through the advanced technological processes of the Silao plant," Pirelli said.

Pirelli said the latest announcement means the company has committed more than $800 million to the facility in the past decade. The R&D center there will join 13 others around the world.