Known for its style, speed and performance marketing values, Pirelli & C. S.p.A. is a multinational company based in Milan, Italy, listed on the Milan Stock Exchange since 1922, with a temporary privatization period by the consortium led by the Chinese state-owned enterprise ChemChina.
Pirelli is said to be considering Thailand as a location for one of its MIRS plants, as the company aims for a 10 per cent share of the Thai market. A new Scorpion 4×4 tyre is expected to be launched in Thailand next June – the 4×4 sector is an important one, as Thailand is a major Asian market for pick-up trucks.
In the USA, Pirelli has introduced a new tyre, the P6 Four Seasons. As the name suggests, it is an all-season tyre, which is already OE fitment on a number of European vehicles. In North America, OE contracts have been signed for the Lincoln Town Car and Ford Crown Victoria. The tyre is also undergoing homologation on new models from Jaguar, DaimlerChrysler and BMW. It will be available in 23 sizes for wheels from 15″ to 17″, aspect ratios from 65 to 45 and H, V and W speed ratings.
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In J.D. Power’s 2002 Global Component Branding Study, tyres and stereos came top of the list of components for which consumers prefer brand names. 68 per cent of respondents in Europe, Japan and the USA said it was important to have branded tyres, although awareness levels differed. No doubt prompted by recent recalls, more than 80 per cent of US respondents said tyre brand was important, compared to less than 20 per cent of Japanese. 17 brands were included in the study and the leading brands were Michelin, Pirelli, Goodyear and Bridgestone. Michelin’s brand was the strongest in Europe and the USA and Bridgestone was tops in Japan.
Pirelli has reached an agreement with SmarTire for the application of tyre pressure monitoring systems. The system will be marketed under the brand X-Pressure and should be commercially available across key European markets. Francesco Gori, Head of Pirelli Tyre Division says, “This agreement opens a new phase in the evolution of Pirelli which integrates the tyre with the vehicle. It may come that the tyre will have dialogues with the vehicle’s control systems.”
Good news for manufacturers and truck tyre distributors in the UK – truck tyre prices of several leading brands are set to increase. Goodyear prices have already been increased by 3.5 per cent and Bridgestone prices are set to rise by an average of 3.5 per cent also. Pirelli has confirmed that it will increase its truck tyre and retread prices by 4 per cent in November and Michelin is said to have increased new truck tyre prices by 3 per cent, Remix prices by 2.5 per cent, with no change to Encore prices. The rising cost of raw materials is cited as the main reason for the increases.
In Germany, VW/Audi has embarked on a press publicity campaign for winter tyres. The program runs for October/November and includes tyre and wheel assemblies with tyres from companies Bridgestone, Continental, Dunlop, Goodyear, Michelin, Pirelli and Mabor Winter Jet, a Continental house-brand. The interesting point is that, when the tyre is purchased, a storing service is offered, accompanied by a free guarantee. The 24-month guarantee includes protection against punctures, damage caused by kerbing and vandalism. The guarantee is not restricted to VW or Audi cars. More information will be available under www.reifengarantie.de, although the page is not yet up and running.
Pirelli’s first half figures show that the group made a loss of 52 million Euros in the first half of the year, compared to a profit of around 200 million Euros for 1H 2001. This is directly attributable to what Pirelli calls “the unprecedented crisis in the world telecommunications market; excluding telecom consortium Olimpia (in which Pirelli has a 60 per cent stake), the group’s profit was 2 million Euros. Tyre sales were up 0.7 per cent over 1H 2001, at 1.488 billion Euros.
For the fifth consecutive year Michelin has come top of the JD Power survey for satisfaction in passenger vehicle original equipment and top in the light truck OE tyre satisfaction league. The study has been based on reports from 33,700 consumers in their first three years on new vehicle ownership and reports on satisfaction with OE tyres. Michelin had the lowest percentage of owners reporting a tyre problem in the first year of ownership and more than 60 per cent of users said they would buy Michelin tyres as replacements. This is the highest level of repurchasing of any OE tyre brand.
Indian manufacturer Ceat Ltd has caused a stir by agreeing to outsource some 10,000 tyres per month from Pirelli. Recently Indian companies have sought to find cheaper alternative products by buying from other, lower cost markets but this move goes against the trend with Ceat importing higher cost, higher quality products from a world leading brand. The reasons are said to be to fill the gap left by the collapse of the Ceat – Goodyear JV to produce radials and to try and give the company a foothold in the growing radial tyre market without setting up another manufacturing operation in India. It may also offer a low risk opportunity to test the Indian market’s capacity for high quality, high cost premium brand products. The outcome of the exercise may alter the nature of the Indian tyre market according to some commentators.
Pirelli’s new North American HQ and first US MIRS tyre factory were officially opened this weekend in Rome, Georgia. The ribbon was cut by Roy E. Barnes, Governor of Georgia and Pirelli North American President and CEO Gaetano Mannino. Various other local dignitaries attended the ceremony. The complex will employ 300 in three years time, 250 of which will be involved in production. Initially there will be three MIRS modules, but Pirelli says that this number “will substantially increase” by 2003. Pirelli also says that it expects to announce new OE contracts for MIRS tyres with more than one North American car manufacturer.
A two-thirds fall in the world Telecom market has meant a drop of 90 million Euros in profit before interest and tax for the Pirelli group in the first half of 2002. Turnover was down 11.9 per cent to 3.35 billion Euros, compared with 1H 2001 and group operating profit fell 35 per cent to 278 million Euros. The tyre sector performed well, particularly in the high performance segment, but this was not enough to offset what Pirelli describes as “the unprecedented crisis” in the world telecoms market. The group is carrying out a “cost containment exercise” which it says has resulted in efficiencies totalling 90 million Euros in the first half.
Pirelli unveiled its automatic Continuous Compound Mixing system (CCM) which complements its MIRS tyre production system and allows extremely accurate and environmentally-friendly mixing of up to 40 components. Seven patents have been applied for, with the first one granted in North America. Together, says Pirelli, CCM and MIRS will mean “a new generation of tyres, with performance unimaginable up to now.”
A motorcycle tyre produced by Pirelli’s MIRS system has received OE homologation from bike manufacturer Aprilia for its RSV 1000 model. MIRS production modules are due to be installed at the Metzeler factory in Breuberg, Germany, shortly.
Following speculation over the last year, Pirelli has confirmed that it is retaining its Commercial Vehicle Tyre Operation, and that this sector will now be headed up by Alberto Pirelli in Milan. Chairman, Marco Tronchetti Provera, said: “Pirelli is in the best position to manage and develop its assets, as demonstrated by its improved performance against major competitors and given the Group’s ability to finance its own growth, there is no necessity for any sale. Restructuring within the Pirelli Group and its new three-year plan show good prospects in terms of profitability and cash flow”.
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