Pirelli Freezes China Investment

The changes that have occurred in global markets since last year have prompted Pirelli to mothball its planned US$100 million investment in China. In July 2008 the company announced it would invest this sum in China over a two-year period in order to double production capacity by 2011. Yet despite at 40 per cent year-on-year increase in sales within China during the first half of 2009, weak global demand has led to a rethink in Milan.

“In July 2008, we were living in a different world,” stated Pirelli China managing director Giuseppe Cattaneo. “At this moment, we want to have a look at what’s going on.” In a Reuters article, Cattaneo comments on a sharp drop in US and European demand, and expresses hope that a ‘clearer picture would appear by the end of this year.’

“Once the situation becomes better, or let me say more clear, we’ll be able to confirm this investment,” Cattaneo said. Pirelli has also put a stop on its investment within Russia until business conditions pick up.