Pirelli Tire North America Inc. believes its new ``middle American'' original equipment contracts will help it expand both its U.S. dealer base and its replacement sales.
Ford Motor Co. has selected Pirelli Scorpion STR tires in size LT265/75R16 for fitment on its 2003 Excursion sport-utility vehicle and Super Duty F-250 and F-350 pickup trucks.
The tires will be made at Pirelli's Brazilian factory and shipped to Ford assembly plants in Louisville, Ky., and Cuautitlan, Mexico.
As a Pirelli spokesman pointed out, ``You don't sell many Ferraris in Des Moines, Iowa, but you do sell Ford trucks.''
Pirelli's dealers-about 440 of them representing around 4,000 points of sale-are mostly in the coastal areas where import vehicles arrive, but the more mainstream contracts should help the tire maker expand its distribution network.
``One of the things our dealers keep telling us is you have to have OE because it's important for them. It's much easier when we have OE for them to sell our product,'' Gaetano Mannino, CEO and president of Pirelli Tire North America, said at the North American International Auto Show, held Jan. 11-19 in Detroit.
The contracts are only the second round in the U.S. OE market. In the fall, Pirelli finally announced it had been awarded OE contracts, 14 years after entering the market. The tire maker will supply Ford with its new P6 Four Season tires for the Crown Victoria, Grand Marquis and Lincoln Town Car. While those fitments are aimed at the luxury to high-performance sedan market, Pirelli's most recent contracts with Ford are more middle American.
``We thought that it would be good to have a broad recognition in the marketplace involved in the SUV business, and the opportunity came two years ago with Ford,'' Mannino said. ``Starting from there, we have other projects where you will see a better matching of the concept that you have a Pirelli in the high performance (vehicles).''
It will take three years to see the effect of the OE business as it kicks in on the replacement side, Mannino said. ``On the other side there is the pure growth of the dealer.''
``We need to grow our dealer network and add to that the effect of the OE business. These two combined will take us to double (sales) in the market,'' to $500 million within three years, Mannino said.
As far as price on its replacement tires for middle America fitments, it probably will be a matter of a few dollars premium, he said. ``It won't be the big value that you can probably ask when you're talking to a tire person for a Ferrari.''
But that doesn't mean the tire maker is broadening its product line to include lower speed-rated tires. Conversely, the market is coming more toward Pirelli's high-performance products, the North American CEO and president said.
``You can walk around the show and you will not see an S-rated tire anywhere; you hardly see H-rated tires,'' he said. ``Most of the time what you see is the higher ratings.''