Pirelli 2020 figures reveal high-value tyre segment resilience
Pirelli has joined its global premium-brand tyre manufacturer counterparts in announcing a significant decline in 2020 revenue, around one-fifth down year-on-year (-19.2 per cent). As you would expect, the company said the sharp contraction was due to the Covid-19 pandemic emergency. The more optimistic news for Pirelli was the relative resilience of the high-value car tyre segment, which, at -14.4 per cent, beat the overall revenue figure significantly.
In 2019, the Italian manufacturer’s split between what it terms high-value and standard segment revenues was in a ratio of almost exactly 2:1. In 2020, there was a sharp increase in the high-end share (70.4 per cent) versus standard (29.6 per cent). Pirelli’s strategy has consistently focused on producing tyres for high-end car models, and it was quick to point out the benefits of this approach in its 2020 filings. It said the high-value tyre market has proven its resilience even in the “greatest global market crisis”.
Pirelli forecasts for 2021 also focus on the high-value tyre market, since the manufacturer believes it will recover to 2019 levels this year. It only expects across the board global tyre demand in the car and truck tyre segments to recover to this level in 2023. Pirelli wants to capitalise on its leadership in the high-value car tyre segment via pull-through sales driven by its recent original equipment deals with prestige car manufacturers, it states.
Comparing Pirelli with wider market averages, Pirelli noted that it outperformed the market in car tyres of 18”-plus in 2020. Its fall of -7.8 per cent was better than the -9.5 per cent of the full market. In original equipment business, this difference was even wider, with Pirelli volumes only -6.3 per cent versus the market’s -13.2 per cent contraction. Pirelli was well-placed to capitalise on the global bounce of this segment in the fourth quarter too; its volumes were up 19.1 per cent versus a market rise of 9.1 per cent. In the replacement high-value market, Pirelli was down versus the market at -8.9 per cent versus -6.9 per cent. However, the last quarter of 2020 saw it rise faster than the overall market, growing at 6.5 per cent versus 2.5 per cent, evincing Pirelli’s progressively growing strength in this segment.
In 17” and lower sized tyres, Pirelli’s reduction in 2020 volumes was contrastingly more accentuated than the market’s. It shipped -22.6 per cent fewer tyres versus the full market’s -16.5 per cent in this segment.
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