MILAN—Pirelli C. & S.p.A.'s renewed focus on its "high value" tire segment is affecting the bottom line and driving company's overall growth.
The Milan-based tire maker reported a 3.7 percent year-on-year revenue increase in 2018, to $5.9 billion, growth that was driven by strong sales of its high value tires. The segment registered growth in all regions and increased 10 percent overall, compared to 2017.
It contributed to 63.7 percent of Pirelli's total sales in 2018, compared to 57.5 percent the previous year. Adjusted EBIT before start-up costs rose 8.2 percent to about $1.1 billion, according to a Feb. 14 release.
Pirelli previously outlined four categories of high-value products. They include:
- Prestige, which was developed with luxury car makers;
- New premium tires with diameter of 18 inches or more;
- Speciality tires such as runflats and color editions; and
- Premium Moto, which are high-end motorcycle tires.
Pirelli noted that it invested about $526 million in its operations last year, the bulk of that was directed toward research, development and manufacturing of its high value products.
Since its acquisition by ChemChina in 2016, Pirelli has relaunched itself as a "pure consumer tire company," supplying car, motorcycle and bicycle tires globally. It was at this time that the company has renewed its focus, shifting emphasis from standard tires to its high value segement.