Twenty-five years ago, Canon U.S.A. Inc.’s famous “Image is everything” television ad debuted. The company sold a lot of Canon EOS Rebel cameras with that campaign, helped by its celebrity spokesman: long-haired, charismatic tennis player Andre Agassi.
Although highly successful, the ad was criticized for emphasizing image over substance. But Agassi went on to win eight Grand Slam tournaments, and is a member of the International Tennis Hall of Fame. And Canon still sells the EOS Rebel camera line.
The Pirelli name has strong top-of-mind awareness all over the world, including China. Pirelli is a Tier 1 ultra-high performance tire. In the Italian tire maker’s own words, the brand is synonymous with “quality, reliability, strong emotions and the ultimate in performance.”
It is an image Pirelli has always worked hard to promote — the iconic Pirelli Calendar comes to mind — and to protect.
More than 150 years after its founding, however, the company and, by extension, its brand are facing an identity crisis. By the end of October, it is highly probable China National Chemical Corp., ChemChina for short, will own a majority interest in Pirelli & Cie SpA.
At least in the U.S., Chinese tires are generally considered lower in quality than any U.S.-made brand. It’s a stereotype Japanese and Korean tire manufacturers faced in the past, and overcame.
Often a low-cost alternative to other entry-level tires, they are branded as “you-get-what-you-pay-for” products. That is certainly not always the case, and some of the largest tire companies in China already have mastered the learning curve at their manufacturing plants.
Eventually, technology-challenged Chinese tire factories will be weeded out, overall tire performance will improve and Chinese tire quality will be a non-issue.
In the meantime, Pirelli’s image may or may not take a hit, depending on whom you ask. Pirelli CEO Marco Tronchetti Provera said Pirelli will continue to control its own destiny. It will share consumer tire technology with ChemChina, but not plant space.
On March 23, Tronchetti addressed Pirelli’s employees about what the agreement will mean to the company.
“The opportunity with a partner like ChemChina is for the company to become bigger and to have a more effective penetration of the Asian market,” he said.
“Our factories and employment in general can only benefit, in the future, from the entrance of a new shareholder. The Chinese partners appreciate our ability to produce tires of very high quality and our factories, which are at the cutting edge worldwide.
“These are the points of strength in which we will continue to invest because they will allow us to maintain our leadership in the ‘Prestige’ segment and to be among the leading producers in the ‘Premium’ segment.”
At a reception held during the 2015 New York International Auto Show on April 1, Pierluigi Dinelli, chairman and CEO of Pirelli North America Inc., helped introduce the Lamborghini Aventador LP 700-4 Pirelli Edition. It features P Zeros with red stripes on the sidewalls.
Pirelli is the only original equipment tire Automobili Lamborghini SpA has ever mounted on its vehicles.
“I think that to become better as Pirelli, we need to partner with a really great company that is going to push us forward and is going to challenge us to deliver always better and better products,” said Dinelli. “So if we want to be ahead of the competition, Lamborghini is the right partner to deal with.”
Will ChemChina be the right partner as well? My guess is any tarnishing of Pirelli’s reputation among tire dealers will fade quickly, at least while Tronchetti is CEO.
As for ChemChina and its National Tire & Rubber Co. subsidiary, partnering with Pirelli can only enhance their tire brand names, Aeolus among them. ■
If you have questions or comments, please email me at [email protected].
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