Nearly one month ago, Pirelli & Cie Spa – parent company of Pirelli Tire North America Inc. (PTNA) – painted a sobering picture of consumer tire demand for the rest of 2020.
The company predicted that the economic impact of the COVID-19 pandemic would cause an 18% decline in the global replacement tire market for the year.
And it suggested that the global OE tire market would experience an even larger, 21% drop – directly caused by “the global fall in the production of new vehicles,” according to Pirelli officials.
To date, Pirelli has not revised those projections.
But there is a glimmer of hope on the horizon – particularly on the OE side, according to PTNA CEO Pietro Berardi.
“Pirelli is deeply coordinated with OE customer management to continuously align future stock levels with adjusting vehicle demands,” he says.
“Vehicle production is currently targeted to ramp up within the second quarter – with each OEM managing their own plans in coordination with federal and state officials, the implementation of updated facility health and safety guidelines and adjusting market demand.”
At press time, based on the latest information available, Berardi says Pirelli is “evaluating the possibility” of partially restarting its plant in Rome, Ga.
The heavily automated complex – which uses the company’s Modular Integrated Robotized System (MIRS) – “has been thoroughly sanitized” following “strict COVID-19 protocols, based on our experience in China and Europe.”
The 18-year-old facility can produce 1,700 consumer tires per day at full throttle, according to MTD research.
Lessons learned
According to Berardi, who was named CEO of PTNA this past March, Pirelli is “drawing on the lessons learned from our experiences in China, where our operations are now slowly – and thankfully – returning to normality, on how best to contain the effects of this situation on the company and its partners.”
That includes the company’s North American dealer network.
“We are confident that the current inventory levels in our local warehouses remain adequate to guarantee the service level expected by our business partners,” he says.
“Given the nature of the COVID-19 emergency, we have moved all interaction with dealers, carmakers and other clients onto digital platforms.
“And in the case of our dealers, our sales team is always available to provide any support needed during this slowdown.”
Berardi says he has been impressed by dealers’ flexibility during the COVID-19 crisis.
“We’ve seen our partners investing in online capabilities for consumer interaction, using this time for getting associates up to speed with our online product training catalog and webinars, getting organized with new ideas – such as touchless service – and adapting to remote communication tools for education and engagement.”
“During this time, we have formed closer bonds with our customers, with an improved flow of information, to serve end customers better – laying the foundation for a strong restart of business activities together,” he notes.
As governments across North America begin to reopen their economies, Berardi expects that certain product segments – particularly light truck tires, commercial tires and consumer OE tires – will bounce back sooner than others, “reflecting the activity of the transportation, construction and medical sectors.”
