10 Million Tires and Counting

Q: How are Pirelli’s investments in Guanajuato developing and what challenges have you encountered?

A: Pirelli announced a further US$200 million investment in 2015, which will bring our total investment dedicated to Mexico to about US$620 million. The new plant we are building now in Guanajuato will cover 70,000m2 when completed, bringing our total combined capacity to produce between 7 and 7.5 million tires per year across two plants. We expect most of these tires to be exported, either directly or indirectly. The project is moving forward well. We broke ground in June 2016 and we expect to start producing tires in the new plant during the second half of 2017, by which time we will have a total workforce of more than 1,800 associates in the two plants.

Q: How do you expect this production increase to impact your operations in the original equipment segment?

A: It is a positive step at a time when many new carmakers are coming to Mexico. We were the first in the Bajio to invest in a modern plant and are well ahead of our competitors. We celebrated the production of our 10-millionth tire made in Mexico in 2016 and five years of production since the first tire was manufactured in the state of Guanajuato. Pirelli has become a part of the community and we are delighted to be in Silao, Guanajuato.

Our factory produces tires for Audi, Volkswagen, Ford, BMW, Mercedes-Benz and for the Challenger Hellcat. All the tires for these models are designed and manufactured in Mexico for local and export markets. Globally, BMW and MercedesBenz are our customers and we have expectations that when their Mexican plants are ready to find a tire supplier, we will have the opportunity to participate in that business. We also have ongoing relationships with Asian carmakers. But even though Kia, Mazda, Honda and Toyota are now all in the area we do not supply them from the Guanajuato plant. This does not mean that we will not do so in the future.

Q: How is Pirelli performing in Mexico’s aftermarket and retail segments?

A: We are gaining market share and continue to open new retail locations throughout the country. Targeted strategic growth that is not just for the sake of growing means our business is developing long-term viability. In the premium segment, we are one of the market leaders.

We want to be the premium brand of choice for the Mexican consumer, the supplier of choice for the Mexican distributor and the employer of choice for Mexicans in the automotive industry. We are building solid foundations for this to happen. Six years ago, there were 28 people working for Pirelli in Mexico, today there are more than 1,700 of us.

Q: What new products are you going to launch from Pirelli’s new factory?

A: At the moment, our factory is focusing on products that are mainly designed for North America, although some are also for the global market. In Mexico, we produce a series of “Plus” tires, such as the P7 All Season Plus, Scorpion Verde All Season Plus and the P Zero All Season Plus. These tires are designed for the replacement market.

Building on the world-famous P Zero line, we are already producing the next generation and new Scorpions are in the making. Our R&D team in Mexico continues to grow. The company’s 24 engineers, of which 22 are Mexicans, work in a world-class laboratory. We perform R&D and laboratory activities for other facilities around the world.

Q: What is the global strategy to face the changes in the global automotive industry?

A: Globally, the car business is clearly growing but more so in the premium category, and that is our target market. This allows us to follow our customers, the carmakers as well as aftermarket companies, to markets where premium cars are sold more widely, such as the US, Europe and China. We tailor our tire technology to make new cars better, and carmakers appreciate this quality service.