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Business / Companies

Pirelli sees opportunities in China's tire market

By Qiu Quanlin in Shanghai (China Daily) Updated: 2016-04-21 08:50

Pirelli sees opportunities in China's tire market

A worker manufactures rims for tires at the Pirelli & C SpA tire factory in Jining, Shandong Province.[Photo/Agencies]

Pirelli & C SpA, one of the world's top five tire makers, is looking for opportunities to work with Chinese homegrown automotive manufacturers to provide tailored products, amid booming demand for high-end SUVs and electric cars, said a senior company manager.

"It is very important to work with local car players-that is a traditional business model for Pirelli," said Gregorio Borgo, director of general operations of Pirelli.

Citing the success of working with Fiat in Italy and Ford Motor Co in the United States, Borgo said Pirelli needed to localize its strategy, focusing on the booming the SUV and electric-vehicle sectors in China.

"Demand for SUVs and electric cars in China is growing very fast, and they are both good in quality and technology," said Borgo.

Sales of Chinese self-developed SUVs increased 58 percent year-on-year in the first quarter of 2016, according to the China Association of Automobile Manufacturers.

"I know there have been a lot of beautiful SUVs and electric cars developed in China in recent years. We need to provide better tires for them," said Borgo.

Borgo said China's automotive market is in volatility, but demand for premium cars is still growing rapidly.

According to Borgo, the Chinese market for prestige cars including Porsche, Ferrali and Lamborghini, which are partners of Pirelli, grew by 26 percent year-on-year in 2015.

Also, sales of premium cars in China, including BMW, Audi, Volvo and Mercedes-Benz, grew 7.5 percent year-on-year in 2015, according to Borgo.

Pirelli sees opportunities in China's tire market

Gregorio Borgo, director of general operations of Pirelli.[Provided to China Daily]

"So, we are still expecting rapid growth in the Chinese tire market due to the growing demand for luxury cars," said Borgo.

Borgo made the remarks after Pirelli launched its latest P Zero tire in the Asia-Pacific region in Shanghai on Tuesday.

Also, Pirelli, the official Formula One tire supplier, launched a new variant-Dragon Sport-to address the local needs in the Asian market.

The Dragon Sport tire, a product fully developed and manufactured in Pirelli's Yanzhou plant in Shandong province, is the company's answer to the growing needs of brand sensitive owners of midrange class and synergic vehicles, said Borgo.

Guiseppe Cattaneo, chief executive of Pirelli Asia-Pacific, said the company would expand its retail network considerably to take advantage of the growing demand for privately owned cars.

"The tire replacement market in China has not been fully explored yet. This is both a challenge and an opportunity for Pirelli," he said.

China National Chemical Corp's acquisition of a controlling stake in Pirelli, which was announced about a year ago, would certainly push forward the development of its business in China, said Cattaneo.

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