Pirelli to Invest $100 million in Doubling China Tyre Capacity

Pirelli & C has announced that it will invest $100 million in expanding the capacity of its Chinese tyre production operation over the next two years. The investment is designed to double the company’s passenger car tyre production capacity by 2011, while also increasing truck tyre output. According to the Reuters news agency, the expanded capacity could double Pirelli’s share of China’s market to 10 per cent within five years.

The investment would mean Pirelli’s total Chinese tyre capacity would rise to 11 million passenger car and truck tyres and could help China become Pirelli’s second largest global market within five years, Reuters quoted Pirelli chairman, Marco Tronchetti Provera as saying.

According to the report China represent’s Pirelli’s fifth largest market by unit volume, representing about 10 per cent of sale. Roughly half of Pirelli’s Chinese production is domestic sales, with the remainder being sold on global export markets.

During the press conference, Tronchetti Provera reiterated previous comments that Pirelli is looking to expand its business in China, India and Russia, where he aims to open a plant by the end of 2009.