Pirelli targets 9% growth through to 2020
Milan, Italy – Pirelli & C. SpA is targeting average annual growth in sales of 9% or above for the 2016-2020 period, driven by its focus on high-value products.
The Italian tire maker said in its annual report, published in March, that it aimed to increase the proportion of high value products to 63% of total revenue by 2020, up from 54% in 2016.
Pirelli said it intended to invest an average equal of 7% of annual revenue for the 2017-2020 period, 82% of which will be earmarked for the high-value segment.
The company expects to increase its high-value production capacity from 38 million units in 2016 to 53 million in 2020.
The increase will be partially achieved through the conversion of standard-tire lines to high-value capacity, according to the annual report
The company foresees a reduction of 7 million units in ‘standard’ capacity, 3 million of which will be converted to high-value.
The project to covert capacity in Brazil began in 2017, said Pirelli, to serve growing demand in the NAFTA region.
Additionally, Pirelli will increase production capacity for high-value tires globally by 11 million units to achieve the target.
As part of its growth strategy, Pirelli aims to speed up its homologation programme with prestige and premium car manufacturers.
In 2017, the Milan-based company obtained 402 homologations, 324 of which it classified as ‘new premium’.
Also, the company aims to develop “an unprecedented product innovation programme”, which it says will strengthens its specialties and super specialties range.
Between 2017 and 2020 Pirelli intends “to launch up to 18 new product lines with global and regional coverage, including winter products, summer and four seasons, specialties/super specialties plus traditional products.”
Future prospects for Pirelli and other major tire manufacturers will be discussed and debated at Future Tire Conference 2018, taking place 30-31 May, during the Tire Cologne international trade fair in Cologne, Germany. Click here for more information.