Pirelli will lead the Premium market with unrivaled technology, the greatest talent and a relentless global outlook
Seven years after the turmoil of September 2008, the recovery remains mixed. This year, world gross domestic product will be slightly up, with the US forecast to be the frontrunner with growth of 3.3%. Pirelli’s new factory in Mexico is well placed to serve North America.
South America is expected to be volatile, with negative GDP growth in Venezuela and Argentina and a stable economic activity Brazil. Europe should grow 2%, benefiting from the European Central Bank’s pledge to do whatever it takes to stabilise and boost the region’s economy. A weaker euro and growth-orientated policies by individual governments should help European companies.
Despite uncertainty last year, the rapidly developing economies will make a significant contribution to global growth in coming years. China is expected to become the biggest car market by volume by 2017, while Germany will remain the highest bluechip car market by percentage of cars on the road, at about 40%.
Foreign exchange markets are expected to be volatile in 2015, with emerging market currencies such as the Brazilian Real, Argentinian Peso and the Russian Rouble forecast to devaluate against the US dollar.
Raw material markets are expected to show a slight rebound in prices starting from the second half of 2015, especially with regards to natural rubber; the resulting raw material cost reduction as compared with 2015 will be eroded by the mentioned devaluation of emerging markets currencies.
Tyre market outlook
Premium is expected to account for 25% of the total car tyre market in 2015, 1 percentage point ahead of 2014. After 10% growth in 2014, the market is expected to increase by 7% in 2015. China, Europe and North America will be the major growth areas for tyres.
Truck tyre markets (all steel only) are expected to grow by 2% globally in 2015. The strength of Europe and North America is expected to offset a slowdown in emerging markets.
South America – which accounts for 13% of the total truck tyre market in rapidly developing economies – experienced a steep drop of 23% in tyres fitted by manufacturers in 2014. It will only partially recover in 2015.
Pirelli priorities for 2015
A 2015 priority is the consolidation of our prestige and leadership in supply of tyres to car manufacturers. This means innovating with products that meet today’s technological challenges.
Moreover, we aim to continue growing market presence in the replacement channel but with a selective strategy. We want to reduce business with generalist wholesalers and grow in car models where the company does not have homologated products.
In the medium market segment, Pirelli plans a significant product renewal which includes the Cinturato All Season, targeting a small but growing market niche.
In the Moto business, 2015 will see the beginning of production in Indonesia to supply the Asia Pacific region.
For truck and agricultural tyres, starting in the core South American market, our business model will become more ‘fleet-centric’ and will benefit from a value proposition which focuses on tyre efficiency, retreads and services. These will be delivered through owned dealers, independent trade partners, retread specialists and truck vehicle dealers.
Pirelli’s ambition remains the same: to lead the highend tyre market and capture high-margin markets around the world for many years to come. We will do that through our unrivalled technology, the best talent and a relentless global outlook, creating value in a responsible and sustainable way.