Despite no investments, Pirelli sales rise in Russia

Departing a profitable market isn’t for everyone: Pirelli & C. reports that Russia accounted for “about 3.5 per cent” of its global revenues of 1,699.7 million euros in the first quarter of 2023, which means the tyre maker Q1 2023 revenues in Russia amounted to approximately 59.5 million. Not a colossal sum when compared with total sales, but nonetheless more than Pirelli made in that market in the first quarters of the two previous years.

In a prior interim financial report, Pirelli discloses that activities in Russia accounted for three per cent of company turnover in both Q1 2021 and Q1 2022. Looking at revenues for both reporting periods, this indicates first-quarter turnover in Russia of approximately 37.3 million euros in 2021 and some 45.6 million euros in 2022. This being the case, Pirelli’s Russia revenues rose by about 59.5 per cent in the past two years.

Production in Russia in Q1 2023 accounted for about eight per cent of overall group production. Pirelli does not refer to production capacities in its Consolidated Results to 31 March 2023 but mentions in its 2022 Annual Report that Russia accounted for 11 per cent of total compacity for 2022.

Production geared towards local market

In March 2022 Pirelli reported it had suspended investments in its factories in Russia, except for safety-related expenditure, and would gradually limit its activities in that market. To comply with international sanctions, from the second half of 2022 Pirelli has geared production at its Kirov and Voronezh car tyre plants in Russia towards the domestic market and identified alternative sources for import/export streams.

This shift in focus to the Russian market took place as some of Pirelli’s premium rivals were leaving the country, and this seems to have caused the Italian brand no harm at all: Speaking with Russian newspaper Kommersant, a representative of popular online retailer Avito indicated that Pirelli was the most popular brand of new tyre purchased through the platform in Q1 2023, ahead of Triangle and Yokohama.