MILAN, Italy (Nov. 12)—Pirelli S.p.A. has signed a letter of intent with China's Aeolus Tyre Co. Ltd. to create a joint venture for producing tires and steel cord at plants to be built in China's Henan Province.
The as-yet unnamed joint venture will start next year with radial truck tires, primarily for the Chinese and Southeast Asian markets, Pirelli said, and then venture into radial passenger tires and steel cord. The letter of intent calls for a $180 million investment over three years.
Radial tire production in China increased 28.5 percent in the first half of 2004 alone, making China the fastest growing tire market worldwide.
The venture's truck tire element will expand Pirelli's global capacity for such products by about a third, supplementing output from existing facilities in Italy, Turkey, Egypt and Brazil.
Pirelli did not disclose the projected capacities of the factories.