Pirelli Won the Battle, but Who Will Win the War?

On 27 February the FIA announced that Pirelli had won the tender to be the official tyre supplier to the 2008, 2009 and 2010 FIA World Rally Championships. The decision came as something of a surprise for two reasons: Pirelli withdrew from WRC, citing “marketing reasons” only one season earlier; and secondly because the decision means Group Michelin no-longer supply either of the two leading four wheel motorsport series.

The announcement is the second major motorsport supply contract that Pirelli has won, following the announcement that it will supply the Grand-Am in the USA in January. It is also the second top flight FIA motorsport series Group Michelin has withdrawn from or been passed over for.

And that’s why Group Michelin is not amused. Some motorsports commentators have even gone as far as suggesting that the decision, which was made at an extraordinary meeting of the FIA in Paris, was a slap in the face to Michelin. If the tone of BF Goodrich’s response is anything to go by, that probably isn’t far from the truth.

“We demonstrated during the 2006 championship that the BFGoodrich tyres were the best. Two World Champion titles crowned these successes. In 2007, not a single competitor in the tyre industry wished to officially oppose the BFGoodrich brand.

“The BFGoodrich brand was therefore eliminated on the basis of criteria unknown to us but obviously unrelated to sports. For the time being, we take note of this decision,” said Mr. F. Henry-Biabaud, BFGoodrich Rally competition director.

Henry-Biabaud continued and was more forceful still: “The financial and technical efforts we deployed for the past two seasons have therefore not been acknowledged, which is all the more regrettable since we know that today’s and tomorrow’s WRC car manufacturers unanimously supported our proposal.”

So far there has been no mention of how much the arrangement has cost and there has been no offical explanation as to why this decision was taken. Therefore with Henry-Bribaud’s words in mind, the implication is that the FIA’s choice was at least partly financially motivated.

In contrast with the BF Goodrich response, Pirelli representatives suggested that the FIA’s choice was based on its “century-long commitment to motorsport” and, in particular, the sport of rallying.

While the speed of Pirelli’s u-turn was a surprise to some, the return of the Italian manufacturer was not altogether unpredictable. After leaving the series last season, Pirelli representatives refused to rule out re-entry, suggesting that supply was always a possibility.

“Racing is in Pirelli’s DNA and clearly an agreement of such importance is recognition of a commitment to motorsport that has continued uninterrupted for a hundred years,” explains Paul Hembery, director of Pirelli Competizioni.

Set against this backdrop Paul Hembery’s response to the news that Pirelli had been successful was very telling. In an interview with Autosport.com he said: “With a control tyre you drink champagne when you win the deal and probably not again – we’ll win every rally next year because ours is the only tyre.” However, the timing of the deal has major plus points for Pirelli. Hembery continued: “It’s quite fitting; this year, Pirelli celebrates 100 years of competition.”

So Pirelli have won the battle, but has the Italian manufacturer won the war, and at what cost? The same questions that were asked of Bridgestone when it gladly embraced the idea of exclusively supplying F1 have to be asked of Pirelli? Does supplying a control tyre bring generate the same kind of marketing value that competing and winning in a competitive situation does?