Pirelli reveals plans for Chinese production

Oct. 13, 2005

Pirelli & Cie SpA has started making truck tires in Yanzhou, China, with the goal of eventually producing 1.2 million units per year. A passenger tire plant for China also is in the works, say Pirelli officials.

"This is the most important expansion plan ever undertaken by the Pirelli Group in the Far East."

The 500,000-square-meter truck tire factory will initially produce 540,000 tires for the Chinese, Southeast Asian and Australian markets.

Pirelli believes that China "will become a key market for tire producers in the coming years."

Pirelli's goal is to capture 3% of the Chinese radial truck tire market by the end of 2006, "with the aim of then growing at twice the speed of the market."

The Italian tiremaker will invest $90 million in China this year and up to $180 million over the next couple of years.

"These investments also will allow Pirelli to start the realization of a car tire plant, which will serve the Chinese market's growing demand for high performance tires."

Pirelli plans to operate through a 60%-controlled company, the result of a joint venture agreement signed in June with Roadone Tyre Co. Ltd.

The Yanzhou plant will use the company's "zero gradi" technology.