MILAN—Pirelli & C. S.p.A. aims to further increase sales of high-value tires, under a growth plan detailed in the company's annual results presentation.
The document, issued Feb. 26, builds on Pirelli's relaunch, last year, as a premium passenger car tire supplier after separating its industrial tire business into Prometeon Group.
Under the latest plans, the company's Latin America operation is to cut standard tire production and convert to making high-value products, including increased SUV penetration.
Likewise, in its Middle East, Africa and India region, Pirelli said it would look at "progressive reduction of standard production."
Again, operations there will increase the proportion of high-value product sales, which already exceed 50 percent of sales in the region in 2017.
In Russia, meanwhile, the tire maker aims to improve its share in the 17-inch and larger market, "with an increasing weight of locally produced high value tire." It also will try to strengthen price position in the region.
Pirelli has previously outlined four categories of high-value products: Prestige which was developed with car makers such as Ferrari, Bentley, Bugatti and Rolls Royce; New premium tires with diameter of 18 inches or more; Specialty tires including runflats and color editions; and Premium moto, which are high-end motorcycle tires.
In 2017, Pirelli said its achievements included improving product mix. This included phasing out legacy brands, such as Amtel, in Russia, and pruning lower rim sizes in Europe and South America.
The tire maker said that it also had managed to limit low value original equipment contracts last year and improve profitability.
Another achievement in 2017, according to Pirelli, was its progress with integrated OE/replacement business management.
The Milan-based company said it successfully redesigned the management with first pilots of predictive/forecasting tools showing "encouraging results." The company's digital transformation efforts include establishing a centralized plant-planning function working with new digital tools.
The prestige business unit, added Pirelli, "bore its first fruits" with increased OE market-share while a new "customize-to-order" supply chain was activated for color edition.
For 2018, priorities will include re-engineering and consolidating the "integrated business planning process," starting from Prestige, concluded Pirelli.