Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • ITEC
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • International Elastomer Show
    • Women in Tire & Rubber
    • HEXPOL Sponsored Content
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • ETRMA: COVID-19 pummels European tire markets in 2020
      New systems solutions advance the sustainability of automotive weatherseals
      3D mapping, navigation from Conti, others on cusp of mainstream
      The new One: Nokian unveils all-season passenger tire
    • ETRMA: COVID-19 pummels European tire markets in 2020
      R&D, Group 1 oils shift keeps Nynas busy
      The new One: Nokian unveils all-season passenger tire
      USW opposes Taiwan tire makers' dumping counterproposal
    • 3D mapping, navigation from Conti, others on cusp of mainstream
      R&D, Group 1 oils shift keeps Nynas busy
      Motion Industries rebrands as 'Motion'
      Proto Labs to buy e-commerce company 3D Hubs for $280 million
    • New systems solutions advance the sustainability of automotive weatherseals
      Arburg: 2021 Technology Days in June will run for 6 days
      R&D, Group 1 oils shift keeps Nynas busy
      Arburg boosts electric machine business with AMK acquisition
    • Proto Labs to buy e-commerce company 3D Hubs for $280 million
      Ace Products & Consulting partners with Wallace Instruments
      Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
    • WCCO task force navigates pandemic, expands communications
      ASTM cancels April meetings as COVID-19 continues impact
      Paycheck Protection Program funding reopens Jan. 15
      Detroit Auto Show canceled; alternative event being planned for September
    • Tero Peltomaki named Cimcorp CEO
      Synthomer CEO MacLean to step down by early 2022
      ARP Materials adds technical sales manager
      Jack Murphy joins Akron Dispersions
    • USW opposes Taiwan tire makers' dumping counterproposal
      India decides against extending carbon black duties
      Hot topics at virtual CES: AVs, air taxis and drones
      Paycheck Protection Program funding reopens Jan. 15
    • Editorial: Against a backdrop of turmoil, M&A deals give glimpse of normalcy
      Column: Pandemic looms over everything in life, business in 2020
      Column: Lessons from the 2020 Best Places to Work
      Editorial: Silicone hit hard by pandemic, expected to bounce back
    • Advancements in synchronous drive belt design for industrial and consumer markets
      Effects of multiple repurposed materials for reinforcements of standard rubber compounds
      Impact of peroxide blends on the cure rate and aged properties in HNBR
      Techniques to detect long chain branching in polymers
    • Rubber Division seeks abstracts for 200th Technical Meeting
      WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
      IEC speaker: Specialized elastomers may reduce spread of life-threatening pathogens
    • WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
      Rubber Division planning second Women of Rubber event
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: Nova thinks outside the box with sealing tech
      New Products: MonTech introduces 1,500 kN lab press
      New products: 3M introduces new durable, pliable medical adhesive
      New Products: Lanxess launches energy-efficient PU elastomer
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • ETRMA: COVID-19 pummels European tire markets in 2020
      New systems solutions advance the sustainability of automotive weatherseals
      3D mapping, navigation from Conti, others on cusp of mainstream
      The new One: Nokian unveils all-season passenger tire
    • Proto Labs to buy e-commerce company 3D Hubs for $280 million
      Ace Products & Consulting partners with Wallace Instruments
      Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
    • Bridgestone bets on guayule as alternative natural rubber source
      Synthomer CEO MacLean to step down by early 2022
      Jack Murphy joins Akron Dispersions
      Synthomer optimistic, raises earnings forecast
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Selectâ„¢: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
      Sponsored By HEXPOL Compounding
      Understanding and Selecting Performance Additives for Rubber Compounding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2020 International Silicone Conference Virtual Edition
      2020 ITEC Virtual Edition
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
June 13, 2018 02:00 AM

Pirelli sees growth in high-value segment

Tire Business Report
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Responding to a questionnaire sent by Tire Business, Andrea Casaluci, general manager of operations for Pirelli & C. S.p.A., said the company will continue to focus on high-value tires as the prestige and premium markets continue to grow.

    Q: With the year nearing its halfway point, how would you describe the state of Pirelli in 2018?

    A: The growth in profitability recorded in the first quarter was proof of the validity of our strategy, and as a result we were able to confirm the targets for the full year despite the slowdown in some markets and the high volatility of exchange rates and raw material costs. So we are on track with the guidelines set out in our Industrial Plan for 2017-2020.

    In particular, Pirelli is getting stronger in the high-value segment, which includes prestige and premium, as well as specialty tires, and we are progressively reducing our exposure to the standard segment. This is our high-value strategy, which also involves the further strengthening of partnerships with prestige and premium car makers and increasing our high-value production capacity and extending the distribution network coverage, which now stands at around 14,500 points of sale worldwide.

    And we are more and more focused on developing new products that meet the emerging needs of the end-customer, such as the Velo range for bicycles and cyber smart tires. Cyber technologies are the most recent chapter in Pirelli's Perfect Fit strategy, focused on the development of made-to-measure products and services that meet the personal requirements of drivers as well as the specializations of car manufacturers.

    Perfect Fit solutions also include the P Zero Color Edition and the development of specific tires for individual cars—denoted by special markings on the sidewalls (with different markings for each manufacturer)—and our specialties like Seal Inside, Pirelli noise canceling system and so on.

    Q: What are some of the pleasant surprises you are seeing in the market? What has surprised you most?

    A: Pirelli was able to identify certain emerging market trends at an early stage, and these are now consolidated. I am referring to the constant increase in variety of product offerings driven by the demands of consumers who themselves are always more diversified.

    They are concerned with, among other things, safety, extended mobility, environmental impact and noise reduction. To these we need to also add demands of car makers who want to contain CO2 emissions, optimize aerodynamics and reduce noise.

    Pirelli has shown that it can deliver solutions for all these demands, which guarantees the creation of value for clients and, as a consequence, for us.

    Q: Where do you see industry markets headed in the second half of 2018?

    A: Our analysis looks beyond the year and is the basis for the 2017-2020 business plan. Over the three-year period—and we are already seeing the trend in 2018—we expect 9 percent market volume growth in the high-value segment, which is already outperforming the standard market by a factor of 8, in line with growing demand for premium and prestige cars and the growth of new forms of mobility, such as the electric and hybrid vehicles.

    Thanks to our "consumer centric" approach, we are also developing products that are more and more "tailor made," such as "Connesso" and "Cyber Car," our latest smart tire products for replacement and original equipment channels.

    Q: What trends are you seeing in the marketplace? How are you reacting to them?

    A: The markets are moving toward higher rim sizes and high-value tires in sync with new car technologies. We are following these trends with new products and processes and, as a result, have increased our homologation portfolio to more than 2,150 prestige and premium homologations, as well as launching tires with an embedded sensor, such as Pirelli Connesso, which enables the communication of data, via a cellphone app, regarding tire wear, pressure and temperature. It also includes the offer of personalized services, such as car valet and remote assistance.

    Andrea Casaluci

    Earlier this year, for the OE channel, Pirelli presented its "Cyber Car," which also through an embedded sensor tracks the functional parameters of the tire and transmits them to a vehicle's onboard intelligence which can then adapt the ABS and check stability for a safer and better performing drive.

    This is being tested by car makers and will be available for the first time for both electric and traditional vehicles by the end of the year. In our plants, we are implementing a plan of transformation and renewal that aims at the digitalization of planning, production, distribution and consumer profiling processes.

    This plan includes four inter-functional programs: the integrated forecasting program, which applies data science to offer greater demand predictability; the smart manufacturing program and flexible factory, to respond in an ever quicker and more flexible manner to the requests of consumers, car makers and distribution networks; the supply chain program, which aims to bring consumers closer to personalized services; and the prestige program, focused on the prestige end-consumer.

    Q: What sectors look strong? Are they sustainable in the future?

    A: In general, the high-value segments are growing well and at a faster rate than the rest of the market. This trend will consolidate in the future because the high-value segment is more resilient in the face of economic cycles, and it is common to all the areas of the world.

    Q: What sectors are struggling? Do you expect them to rebound? If so how soon, and if not, why not?

    A Commodity markets remain volatile with increases in oil and metal prices due to trade actions and sanctions and geopolitical factors, such as the ongoing Syrian conflict, the re-imposition of U.S. sanctions on Iran, and further production shortfalls in Venezuela. These have tightened global oil supply. The recent rise in oil prices will soon be reflected in headline inflation across many parts of the world. That said, outside the U.S. economy, it is hard to see any systemic rise in inflationary pressures.

    Q: How, if at all, is the threat of tariffs affecting you?

    A: Part of Pirelli's approach is what we call local-for-local production, which means we try to have production facilities within or close to keys markets. In NAFTA we have two plants that produce predominantly for the U.S. market; in addition we are upgrading our capacity to high-value in Brazil to serve the U.S. market. In China, too, we mainly produce for the APAC markets. All this should limit risks related to trade disputes.

    Q: Are you anticipating any price hikes in the second half of 2018?

    A: Adjustments to prices dictated by the high volatility of exchange rates and fluctuations in raw materials have already been made. We are constantly vigilant on this front and we will intervene if necessary.

    Q: What are the challenges the industry is facing? How have the tax cuts affected you? In particular, are customers buying more tires because of it?

    A: In the U.S., for example, we are facing some important market changes where the independent tire dealers are the strongest usual distribution channel, and car dealers are gaining market share, while mass merchandisers decline. In addition to this, all players started to sell tires online and investing in digital marketing targeting the millennials.

    I don't foresee that tax cuts in our sector will lead to an increase in sales in the short term.

    Q: How are Pirelli's plans going to expand high-end tire production in general, and in Brazil in particular? Are there any expansion plans for the Rome, Ga., plant, or for any other Pirelli facility besides Brazil? If so, what?

    A: We have recently announced investments of more than 250 million euro in the next three years in Latin America—already included in the 2017-2020 industrial plan—in the context of our global strategy as a company focused on consumer tires in the high-value segment. These investments will be used for the ongoing modernization of local production facilities and the development of high-value tires and also the partial reconversion of standard capacity into high-value. The investments will allow us to satisfy the demand for high-end tires both in local markets and, in particular, in the NAFTA area for which Brazil is one of the integrated sources of supply.

    In our plant in Rome, Ga, we produce high-value tires with our best robot technology: the MIRS. The actual volume of production is in line with the needs and mix of products of the U.S. market.

    We do not break down our investment plan by country, but in 2020 we aim to have 63 percent of total revenues deriving from high-value, and all our factories around the world, therefore, are affected by a process of optimization of the production mix in favor of the high-value component.

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • ITEC
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • International Elastomer Show
      • Women in Tire & Rubber
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION