Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • Titan to offer free COVID-19 vaccines at Iowa facility
      Bridgestone hosts vaccination events for plant employees
      Cioffi: Will remote working be the new normal?
      Bridgestone Iowa plant navigates pandemic, demand
    • Conti adding dynamic driving simulator at German R&D center
      Yokohama gains OE fitments on BMW, Mercedes-AMG sport utilities
      SEMA picks site in Michigan for 2nd SEMA Garage
      Online retailer CARiD.com looks to triple size of tire/wheel installer network
    • Video: Michelin looks to diversify for additional growth opportunities
      Michelin strikes supply deals with new Canadian racing series
      Yokohama gains OE fitments on BMW, Mercedes-AMG sport utilities
      Vipal Rubber retread guarantee program hits milestone
    • Love's adds 6 Speedco servicing sites to its Travel Stop network
      Bridgestone hosts vaccination events for plant employees
      Jinyu Tire starts truck tire production at Vietnam plant
      Vipal Rubber retread guarantee program hits milestone
    • New York chipping in $3M+ toward Sumitomo factory expansion
      SBA extends and expands COVID-19 loan program
      Stimulus spending should help tire industry
      U.S. agro-science firm gets $1M grant to research sunflower latex
    • Video: Michelin looks to diversify for additional growth opportunities
      Conti adding dynamic driving simulator at German R&D center
      Michelin strikes supply deals with new Canadian racing series
      Yokohama gains OE fitments on BMW, Mercedes-AMG sport utilities
    • Maxxis offers discount to ChampCar competitors
      Michelin strikes supply deals with new Canadian racing series
      Bias-ply tires return to NASCAR Cup Series for Bristol dirt race
      Hankook named race tire supplier for touring car series in Europe, Japan
    • Snap-On introduces TreadReader handheld tire scanner
      Vogue Tyre introduces ‘biggest, boldest' red stripe tire
      Cooper adds Rugged Trek all-terrain to Discoverer LT/SUV tire line
      Hankook unveils Vantra specialty trailer tires
    • Bauer Built promotes pair to VP positions
      TECH Americas adds Haggerty to marketing team
      Snap-On introduces TreadReader handheld tire scanner
      Discount Tire adopts mobile tread-depth scanning system
    • Snap-On introduces TreadReader handheld tire scanner
      Marked for winter: Origin of Three-Peak Mountain Snowflake
      Post-repair message adds personal touch
      Cioffi: Will remote working be the new normal?
    • SEMA picks site in Michigan for 2nd SEMA Garage
      SEMA touts expanded Las Vegas Convention Center ahead of 2021 expo
      TIA seeking nominations for Tire Industry Hall of Fame
      SEMA survey shows resilient auto aftermarket in 2020
    • SBA extends and expands COVID-19 loan program
      Stimulus spending should help tire industry
      Giti disputes report blasting tire maker for accepting PPP funds
      SEMA survey shows resilient auto aftermarket in 2020
    • Titan to offer free COVID-19 vaccines at Iowa facility
      Vogue Tyre introduces ‘biggest, boldest' red stripe tire
      Maxxis offers discount to ChampCar competitors
      Jinyu Tire starts truck tire production at Vietnam plant
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
      Sponsored By AppointmentPlus
      Three Important Lessons Learned for the Tire Business During a Pandemic
      Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      An introduction to wheel balancing
      Wheel weights: Balancing form with function
      Choosing the right balancing equipment
    • Video: Demounting
      An introduction to demounting, mounting and inflation
      Staying safe when demounting and mounting tires
      Demounting Equipment
    • Video: Safety
      Introduction: Creating a culture of safety
      Protecting your people with proper hygiene
      Making friends with OSHA
    • Video: Tire Repair
      An introduction to tire repair
      How to properly patch a puncture
      Tire repair: Shining a light on visual inspections
    • Video: TPMS Service
      An introduction to TPMS service
      The importance of proper relearn procedures
      Decoding sensor data for TPMS diagnosis
    • Video: Training
      Intro: Finding and training technicians
      Shop Floor: Scholarships
      Advantages of apprentice program partnerships
    • Video:Vehicle Lifting
      An introduction to lifts and lift safety
      Recommendations for using a jack
      Jack stands for commercial tire service
    • Video: Wheel Torque
      Introduction to proper wheel installation
      Torque check and recheck recommendations
      Using torque sticks to speed service times
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
  • Awards
    • Tire Dealer Humanitarian Award
MENU
Breadcrumb
  1. Home
  2. News
April 01, 2021 09:27 AM

Pirelli unveils $2.4B investment plan to upgrade technology, capacity

European Rubber Journal
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    MILAN, Italy — Pirelli & C. S.p.A. has unveiled a two-phased industrial plan that calls for investments of nearly $2.4 billion in capacity and digitalization through 2025 and should generate sales growth of nearly 9% a year.

    The Pirelli 2021-22/2025 industrial plan includes two distinct phases, which address a rebound from the COVID-19 pandemic crisis and then further stabilization of growth in high-end markets.

    During the first phase (2021-2022), Pirelli said it expects "a substantial rebound" in global gross domestic product, driven by China and the U.S.

    At this phase, the tire maker said it expects its production capacity utilization rate to return to 90%, helped by "a capacity rationalization that is already under way, with growing importance in countries with lower production costs."

    This will be followed in 2023-2025 by a phase of expansion of capacity to support the growth in volumes.

    This phase will also see a strong focus on connectivity, automation and the Internet of Things at an industrial level, with benefits in terms of efficiency and elimination of production defects, said Pirelli.

    During Phase 1, Pirelli intends to invest up to $870 million, equal to roughly 7.5% of total revenues, focusing on technological upgrade, mix improvement, productivity and optimization of industrial efficiencies.

    In the second phase, the company aims to invest between $1.4 and $1.5 billion, for both "constant technological upgrade" as well as capacity upgrade for "high value" tires, in particular in countries with lower production costs.

    The tire maker expects its digitalization efforts to transform its key processes, connecting them in real time.

    By 2023, the company said it "will adopt a simultaneous business model, wherein workflows are supported by five digital platforms capable of integrating internal functions with external partners/customers in real time and full time."

    All the data will be stored in a "data lake" for better interpretation through artificial-intelligence AI models, Pirelli added.

    In terms of production presence and capacity, Pirelli expects it will manufacture 73 million units of tires in 2022, of which roughly 53 million are "high value."

    By 2025, the tire maker targets a capacity expansion to 75 million units per year, of which 56 million will be high value.

    In terms of its manufacturing footprint, Pirelli said it expects to operate 18 production plants by 2025. Of these, 15 will make passenger car tires (12 high-value and three standard), while its plants in Bollate, Italy, and Java, Indonesia, will focus on bicycle tires and motorcycle tires, respectively, and the Burton, England, factory will make semi-finished products.

    Pirelli said it expects 77% of its capacity for high-value tires will be located in plants in countries with lower production costs, up from 74% in 2020.

    According to its website, Pirelli operates 19 factories in 12 countries and a commercial footprint of around 15,900 points of sale in 160 countries.

    In financial terms, Pirelli anticipates that sales will grow to between $6.8 billion and $7.4 billion by 2025, compared with $5.1 billion in 2020.

    As for efficiencies, the Italian manufacturer said "program was already set in motion in 2019," with Phase 1 delivering $130 million in savings in 2020.

    Phase 2, covering 2021-2022, will deliver net savings of around $200 million, equal to 4.5% of total base costs in 2020.

    In addition to these savings, during 2023 and 2025, Pirelli aims to achieve net efficiencies between $85 million and $120 million, about half of which come from digital transformation efforts.

    Related Article
    Pirelli nominates Prometeon exec to be its deputy CEO
    Pirelli looking to scale back U.K. plant capacity, employment
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION
    • Awards
      • Tire Dealer Humanitarian Award