ROME, Ga.—Pirelli Tire North America Inc. wants more market share, but don't expect the tire maker to make any drastic changes under new CEO Mauro Pessi.
“We will continue to emphasize Pir-elli's place in the marketplace, which stresses the company's heritage of innovation and differentiation,” Pessi said.
In doing so, Pirelli will carry out a selective strategy that ensures a better profit margin for dealers, he said. “We will make sure that Pirelli is properly represented in the shops of those dealers we do business with. Pirelli should be in a premium position.”
And dealers understand that position, and agree with it, according to the 17-year Pirelli veteran, who returned to the firm last October after a year's hiatus with another company.
Pirelli Tire North America continues to work toward parent Pirelli S.p.A.'s goal of achieving $1 billion in sales. But the company will stick to its principles in getting there.
“The Pirelli brand's been growing in a down market,” Pessi said. “We're surviving the (economic) crisis because our dealers understand our position in the market place.”
Pirelli reported sales in North America in 2008 of about $450 million and is on target to exceed that slightly in 2009, according to the firm's most recent quarterly financial reports. North America represents about 8 percent of Pirelli S.p.A.'s global sales.
Underscoring Pirelli's strategy of differentiation was its launch last fall of the Scorpion Verde All-Season SUV tire, which Pessi said is an example of Pirelli's work to create products with “explicit benefits.”
“Consumers don't really care about green,” he said. “So it's our job to explain properly how lower rolling resistance and better fuel mileage, for example, can help cover 50 to 70 percent of the cost of a second set of tires.
“Add in lower weight, less noise, aromatic-free compounds, etc., and you start to have 'real benefits,' ” he said. “It's part of a mindset to become eco-conscious.”
Pirelli expects to double to roughly 40 percent in two to three years the share of its product portfolio that's considered green, he said.
Pessi returned to Pirelli a few months ago after leaving the Italian tire producer in June 2008 to become CEO of Italian brake systems maker Brembo S.p.A. He resigned his position with Brembo last Aug. 31, citing “differences in ideas” regarding the firm's organizational structure.
He took over as the top executive of Pirelli's U.S. arm from Hugh Pace, 58, who was chairman and CEO for the past two years before retiring at year-end.