Innovation, R&D Essential to Lead the Market

Q: What role does Pirelli expect Mexico to play within the company's technological development process?

A: The Silao R&D center will help increase Pirelli's technological and industrial competitiveness throughout the North American region and enhance the company's ability to serve and support premium brands, primarily in the US.

The new Pirelli technology center will have as main areas:

• Modeling: Application of virtual mathematical models to predict vehicle dynamics.
• Tests: Development of new internal tire testing methodologies.
• Digitization: Adoption of digital practices for tire manufacturing.
• Cyber: Development and implementation of technologies that allow the tire to send essential information, such as pressure and temperature, directly to the vehicle.
• Specialties: Robotic application of technologies, such as tire rolling noise elimination technology, oriented toward future mobility developments.

Q: What strategies did Pirelli adopt to keep its production afloat during the pandemic and following supply chain disruptions?

A: We implemented strict sanitary protocols in both factories and corporate offices. This safeguarded the health of collaborators and avoid pauses in production and administrative processes. The implementation of remote and hybrid work schemes also enabled all areas of the company to continue operating normally.

Planning the acquisition of raw materials and product deliveries has also been key to maintain uninterrupted production. We also focused on the digitization of processes in all areas of the company. While this strategy was already underway, its implementation was accelerated by the pandemic.

Q: How is Pirelli innovating within its product portfolio to meet customer needs amid the automotive industry's transformation towards electric and connected vehicles?

A: The electric and connected vehicles market segments are continuously growing. Pirelli Elect tires, which are also manufactured at the Sialo plant, are well-suited for EVs because they are designed to increase the autonomy of the car. They have low rolling resistance that helps increase their range of autonomy and reduce energy consumption. Environmental care and innovation are key elements in the design and manufacture of Pirelli Elect tires.

Tires for a performance car must also contribute to the effective noise reduction. In premium vehicles, external components such as tires are often the main sources of noise. Safety is also essential for all vehicles. All of Pirelli's products ensure safety by adhering to the specifications of each vehicle.

Q: How has Pirelli performed in the Mexican retail and aftermarket segments?

A: Pirelli became a leader in the premium tire segment by understanding what consumers want and responding to those needs. These consumer insights have guided marketing efforts in the brand's strategy, including strengthening its share of the OE market. They also enhanced our approach to retailers, which are critical to the development of the brand. For this latter market, Pirelli puts a lot of emphasis on all aspects related to points of sale, such as colors, store design and furniture because we want the tire buying experience to be enjoyable. These characteristics allow customers to feel confident with the technology-driven performance our tires deliver, helping them recognize Pirelli's strong connection with the best cars in the world. Pirelli's strategy is to focus on the premium end of the market.

Pirelli maintains this strategy in Mexico thanks to the clear growth of the premium vehicle segment and the rapid growth of demand for these tires. Distributors will continue to play a key role as a point of contact with consumers, so Pirelli will continue supporting key dealerships, helping them to better manage their business and encouraging them to focus on value-added products and services.

Q: How is Pirelli positioned as a leader in Formula 1?

A: Since 2011, Pirelli has been the exclusive supplier to Formula 1, one of the best testing laboratories for tire technology. Results obtained from this event are later used to manufacture high-performance products, which would not be possible if Pirelli did not invest heavily in technology.

For over half a century, Formula 1 vehicles used 13-inch tires but now have switched to 18-inch tires. The design of those tires took over 10,000 hours of indoor testing, over 5,000 hours of simulation and over 70 virtually developed prototypes, which were used to create 30 different specifications that were tested by nearly every Formula 1 team for over 20,000 kilometers.

In addition, Pirelli is the first and only tire manufacturer in the world to receive three stars in the FIA's environmental accreditation program, a prestigious recognition of the company's efforts for sustainability in motorsports. Among the steps Pirelli has taken to win this accolade are the increased use of renewable materials, the elimination of single-use plastics from on-track activities and a supply chain managed entirely in accordance with best practices of environmental and social sustainability.

Q: What are Pirelli's plans and strategies to continue growing its operations in Mexico?

A: Mexico represents a strategic region for Pirelli’s operations in North and Central America. Last year’s visit from Governor of Guanajuato Diego Rodríguez Vallejo to Pirelli’s corporate offices in Milan, Italy, demonstrates the company's close ties to the state, one of the most economically advanced in Mexico. We plan to continue investing in Guanajuato to continue growing.

Pirelli has been part of Mexico’s business community for 10 years and we will continue to seek investment opportunities in our plant because we think of long-term development.

Pirelli is a multinational tire manufacturer based in Milan, Italy with 150 years of experience in the industry. Pirelli has commercial operations in over 160 countries and manufacturing sites across the EU, Asia-Pacific, North America and Latin America, including two plants in Guanajuato, where the company produces high performance tires.