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MTD Exclusive: CEO Berardi Outlines Pirelli's Plans for North America

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"We have a customized approach with the customer at the center and then providing the service, the experience and most importantly, the product," says Berardi.

Pietro Berardi is no stranger to the automotive aftermarket, having held senior leadership positions in the Nissan-Renault-Mitsubishi alliance and FCA Group. Seven months into his role as CEO of Pirelli Tire North America Inc. (PTNA), Berardi also has become an expert on the North American tire industry.

When Berardi joined Pirelli, the company tasked him with strengthening its presence in North America, integrating the firm’s original equipment and replacement channels, enhancing relationships with strategic customers and more.

In this MTD exclusive, Berardi provides an update on his progress, as well as a glimpse at where PTNA is headed. He also discusses the company’s product strategy, Pirelli’s participation in the future mobility ecosystem, his take on the state of the market as 2020 winds down and other topics.

MTD: For years, Pirelli has targeted exotic vehicle fitments in North America. Will that continue? What is your overall fitment strategy in this region?

Berardi: You are aware of how big Pirelli is in motorsports and how important we are in what is called the exotic vehicle (segment) - very prestigious brands like Lamborghini and Porsche. But Pirelli is much more than that. What we are delivering to the North American customer is that Pirelli is also getting in big segments, like domestic SUVs and pickups, together with electric vehicles (EVs.) So we are more than a brand for dream cars. We want to get into the market segments that are growing the fastest to get the right product, with the right value for money, to the customer. We love to say we would like to provide the perfect fit for every car in North America.

MTD: The Pirelli brand has always been associated with high-end, premium performance as reflected in price points and the way that dealers position the brand within their own screens. Will this continue to be Pirelli’s brand essence in North America? What’s your vision for the Pirelli brand?

Berardi: Those values will always be the DNA of Pirelli in North America and throughout the globe. What we are bringing to North America is the strength of our brand and applying that to the specific needs of this market. The most important thing is the customer and we want to approach this market with a customer-centered philosophy. We have products that are specifically designed for the customers of this market. And we want to deliver the right combination for our customers.

MTD: Of course, customers include independent tire dealers. Can you bring us up to speed on your dealer strategy and your vision for Pirelli’s North American dealer network?

Berardi: We are pretty happy with our strategy. We have a good portfolio of customers. I like to call them partners. We feel we have good coverage across the US and Canada. One area I would like to focus on is increasing (our) regional (presence) in order to become more accessible to more customers. My goal is to tailor service to individual dealer needs. What works in Miami and Los Angeles is not the same thing that will work in the central regions. We have a customized approach with the customer at the center and then providing the service, the experience and most importantly, the product.

MTD: What sort of investment will be required to implement this customized approach?

Berardi: We want to invest in order to better distribute our product and provide more training to our customers in trying to get our message delivered more consistently. It’s a 360-degree approach. You’ll go nowhere if you don't have the right products, you don't know how to sell them, you don't know how to distribute them and you don't know how to communicate. The idea is to start with the customer at the center of our strategy. Then we are planning to invest in distribution, salesforce, training and communication. 

MTD: When you talk about expanding distribution, are you referring to picking up more regional tire distributors or are you more focused on increasing your presence at the retail level?

Berardi: It’s a combination of both. I think we are doing a great job at being present in the regional hubs of our current customer base. I’m also looking with specific interest at those independent distributors that cover more than one state. There are a couple of partners we’d like to get stronger with. We have a clear list of customers we want to tackle.

MTD: You started with PTNA in March 2020 and brought an extensive amount of automotive industry experience with you. What aspects of the North American tire industry impressed you right off that bat and what opportunities did you identify for Pirelli in this region?

Berardi: My impression right off the bat is that all the players are very, very good; innovation plays a key role; (the market) is driven by product innovation; competition is pretty tough; you need to understand your customers; and you need to provide the best service possible. There’s a lot of focus on the end user, launching new products and how distribution is run. We’ve never stopped investing in research and development. So planning new products, leveraging our relationships with car manufacturers - it’s really exciting and it’s really challenging. We are sailing uncharted waters (with COVID-19), but it is a very sophisticated industry.

MTD: COVID-19, obviously, has had a major impact on many aspects of our industry. But it sounds like the pandemic has not slowed down Pirelli’s new product roll-out schedule….

Berardi: Absolutely. When there are crises or uncertain moments, the temptation is to become controlled about budget and costs. We have not been shy about continuing to invest efficiently. We have a couple of new, important products that are about to come to the market. We’ve continued investing in order to deliver to our costumers in the U.S. and Canada the best products possible.

MTD: Can you update us on the production ramp-up at your plant in Rome, Georgia? At what capacity is it operating?

Berardi: We are currently at full capacity. I am happy to report that as of today, we are running normal shifts and are even able to provide more products to our current customers.

MTD: The Rome plant is heavily automated. Does this provide you with advantages, in terms of your ability to react immediately to market demand, such as when the pandemic hit?

Berardi: Yes. It gave us flexibility. We were able to satisfy the needs of particular customers. We were able to (enjoy) a high level of flexibility.

MTD: Shifting gears, so much has been written about the rise of electric and autonomous vehicles, as well as ride sharing and other things that fall under the label of future mobility. What’s Pirelli’s take on these things as they pertain to North America and how will they influence your product development efforts?

Berardi: This will massively influence our strategy. And we’re not talking about the future. We’re talking about the present.  EVs and hybrid vehicles are already a reality. This is a trend that is not going to leave us. We at Pirelli are partnering with the world’s most important carmakers to develop solutions and to be at their side during this very critical moment of technological transition in the automotive industry. We have achieved several milestones. We have been cooperating with several partners. And we are trying to bring our best knowledge and our best technology when we develop new products. We are taking all aspects of future mobility seriously and are investing heavily in our R&D budget in order to be a leader in this segment.

MTD: Dealers are seeing more EVs and hybrids rolling into their shops. Are you investing in dealer training as it relates to future mobility? 

Berardi: Having dealers know the product is going to be the distinctive element of success. The more that cars become complicated, the more the dealer needs to be prepared to serve the customer. We have to train dealers so they can prepare for this wave of customers. One way to generate more loyalty (with dealers) is to increase the level of training. We also have to challenge ourselves in new ways to deliver content and reach dealers.

MTD: What is your take on the state of the North American tire market for the rest of the year and into next year? What can we expect to see?

Berardi: I’m surprised by how fast the market has recovered. The market recovered quickly and better than I expected. Based on this - if nothing changes, even in current circumstances - I am expecting a stronger end of the year than what we were estimating a couple of months ago. If things don’t get worse in terms of the pandemic - not going back to a lockdown, not going back to what happened in the spring - we will have a fourth quarter that is very strong. But I don’t want to be naive. It all depends on the economy, how consumers are reacting - there are so many variables. 

MTD: COVID-19 aside, what are the top challenges facing tiremakers over the next two to three years?

Berardi: First of all, complexity. The car industry is evolving. Everything is becoming more complicated, so having very effective planning in terms of product screening, managing inventory and providing the right product will become more challenging than it is today. You will have to be perfect in delivering products to customers. The auto industry is going through a radical transformation. We are already into it. One thing I always tell my board is we need to be ahead of the innovation. If we take it in the proper way, this can be a boost of our success.

MTD: What is your long-term vision for PTNA? 

Berardi: To keep investing with carmakers. My plan is to expand our original equipment footprint. I think the Ford F-150 is a great, great landmark (for PTNA.) That shows you the commitment we have to the light truck segment. We are expanding our coverage in the CUV and SUV segments - not only with European carmakers, but also with Asian carmakers. Then, at the same time, we’re not forgetting independent dealers and distributors. My commitment to this customer is to provide them with a consistent product portfolio, good quality and a wide range of coverage that allows all of our business partners to achieve good, sustainable margins. 

“The idea is to become an even more relevant player in the region,” says Berardi. “The customer has to be the center of everything.”

 

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