Pirelli adjusts supply strategy as US tariffs take effect
16 May 2025
Share:
Italian tire maker supplying 40% of tires to US market from factories in Brazil, Europe
Milan, Italy – Pirelli is remodelling its commercial strategy for the US market in response to US tariffs on imports of automotive parts, including tires.
In its first quarter results 14 May, the company said the US accounts for over 20% of group revenues, but only 5% of domestic demand is met by Pirelli’s local facility – in Georgia.
The rest of the demand is served mainly through imports: 55% from Mexico and 40% from Europe and Brazil.
Under the new tariff regime which took effect 3 May, a 25% tariff applies to car tires imported from Europe and Brazil, though there are exemptions under a trade agreement between the US, Mexico and Canada
In response, Pirelli has updated its mitigation plan, including temporary inventory increases, changes to commercial flows, adjusted pricing policies and an extended cost-reduction programme.
The Italian tire maker said it expects such measures to offset the potential impact on cash flow and profitability, particularly if tariffs remain in force throughout the year.
Despite tariffs, Pirelli confirmed its full-year 2025 targets, forecasting revenues to come in between €6.8 billion and €7.0 billion and volumes to grow 1–2% compared to last year.
The group also forecast a price/mix improvement of 2–3%, leading to an adjusted earnings (EBIT) margin of 16%, up from 15.7% in 2024.
This article is only available to subscribers - subscribe today
Subscribe for unlimited access. A subscription to European Rubber Journal includes:
Every issue of European Rubber Journal (6 issues) including Special Reports & Maps.
Unlimited access to ERJ articles online
Daily email newsletter – the latest news direct to your inbox