Paolo Ferrari is going to be a hard act to follow at Pirelli Tire North America Inc. After three years as chairman, CEO and president, Ferrari is taking over Pirelli Latin America.
The man with the big shoes to fill is Pierluigi Dinelli, who will take over as chairman and CEO of Pirelli’s NAFTA region in January 2015.
Ferrari hosted his last U.S.-based dealer meeting in Las Vegas prior to the start of the recent SEMA (Specialty Equipment Market Association) Show. He outlined Pirelli’s goals through 2017, giving Dinelli not only direction but momentum.
“In 2014, we are a completely different company than we were in 2011,” he said. “If we look to 2017, the future looks really promising for us.”
Then and now
Three years ago, dealers told Ferrari that Pirelli “didn’t quite seem to be committed to the American market.” Only 4% of the company’s tire sales in the United States were produced in North America, with that coming from the Rome, Ga., factory. Also, its fill rate to dealers was only 69%.
This year, thanks to the new Pirelli plant in Silao, Mexico, 40% of sales are “local for local,” said Ferrari. In addition, the fill rate is at 85%.
“In 2017, we will further grow our production in Mexico (from nearly 2 million tires annually to 6 million), we will get to 60% local for local… and we are targeting a 92% to 95% fill rate.”
Although North American production has improved, Pirelli still imports most of its tires. Sixty percent are manufactured in Europe, Latin America and, to a lesser degree, China, “but clearly our focus is to make sure we increase our local for local production, which means not just more tires available,” Ferrari told Pirelli dealers.
“It means a better service level, and for us it means more efficiency across the board, from the top line to the bottom line to the cash flow. Hopefully, the more value we create for our own company, the more we can share the value with you.”
OE vs. replacement
Pirelli’s overall strategy starts with original equipment fitments. “It’s the way we stay ahead of the technology curve,” said Ferrari.
Company-wide, Pirelli had 1,611 OE homologations in 2011. That rose to 1,846 this year. Fitments in 2017 will be up another 6%, to 1,855. In the “premium/prestige” category, OE fitments also will continue to increase, from 1,396 in 2014 to 1,505 in 2017. All-season homologations are trending upward as well.
Both the Mexican and Rome, Ga., facilities produce OE tires.
Under Ferrari, Pirelli has tied its replacement strategy to its OE strategy. The last five replacement product introductions in the U.S. have shared tread patterns with their OE counterparts. The only difference in the name is the added “Plus” for the replacement tires.
While the OE versions are tuned to their respective vehicles, the replacement versions feature higher tread wear warranties. Pirelli will continue the “Plus” strategy because it is working, according to Ferrari.
Another Plus for Pirelli
The P Zero All Season Plus was developed specifically for North American driving enthusiasts, said Ferrari. It is a replacement tire that provides maximum performance in wet or dry conditions, including light snow. Inner block winter siping technology is partially responsible for the snow traction performance, while lateral siping on the outer blocks ensures maximum cornering performance, dry grip and improved aquaplaning resistance.
Pirelli backs the tire with a 50,000-mile limited tread wear warranty and its 30-day trial, which the company markets under the Confidence Plus Plan.
“The P Zero All Season Plus also marks the latest product from Pirelli’s successful ‘Plus’ strategy, derived from original equipment product development that is dedicated to the aftermarket — with a focus on maximizing driving pleasure without abandoning tread wear,” said Ferrari. The others are the P7 All Season Plus, Scorpion Verde All Season Plus, Cinturato P1 Plus (launched earlier this year) and the P4 Four Seasons Plus (a standard touring tire).
The tire initially will be available in 15 sizes:
17-inch (seven): 225/55R17 97W, 225/50R17 98W, 215/45R17 91W, 225/45R17 94W, 235/45R17 97W, 245/45R17 95W and 245/40R17 91W.
18-inch (five): 225/45R18 95W, 245/45R18 100W, 225/40R18 92W, 235/40R18 95W and 245/40R18 97W.
19-inch (one): 245/45R19 102W.
20-inch (two): 245/45R20 103W and 275/45R20 106W.
An additional 32 sizes will become available in 2015. The size complement will grow to 71 when 24 more sizes are released in 2016. They will cover models including the Acura RLX, Audi A7/A8 Quattro, Cadillac CTS, Dodge Challenger/Charger, Chevrolet Camaro, Ford Mustang/Focus, Infiniti G37/M37/Q60, Lexus GS/IS/LS, Lincoln MKS and Volkswagen GTI.
Ferrari said being perceived as a niche brand can be a drawback because it is misleading.
“We are, in a way, a little bit of a niche brand, and we like to be that way. But when you look at the coverage of our product line, it is actually much higher than people would think.
“Obviously, we do focus on the UHP (segment), but when you look at the other segments, we cover them pretty well. From 2011 to 2014, we grew in UHP, CUV and LT. We have a very comprehensive, yet simple, product portfolio.” ■
