Pirelli maintains grip on Chinese market amid strong performance

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After relisting in Milan last year, Italian tire maker Pirelli, which was acquired by state-owned China National Chemical Corp (ChemChina) in 2015, announced on Tuesday in Beijing it would look to further focus on the Chinese market.

Pirelli may boost output from its factories in China, Ren Jianxin, chairman of ChemChina and Pirelli said at the media briefing, but did not reveal a specific plan or time frame.

Two of Pirelli’s 19 factories around the world are located in Yanzhou, eastern China’s Shandong Province, and Jiaozuo, central China’s Henan Province, with annual production of 12 million tires, according to data from Pirelli.

According to a report by Business Wire, China is the largest producer and exporter of tires. In 2016 the country produced 6.1 million tires, while it exported 3.31 million that same year, with a value of 11.46 billion US dollars.

In 2017, the Asia-Pacific market was the fastest growing region for Pirelli, with 800 million euros (948 million US dollars) revenue, up 14.3 percent year-on-year. More than two thirds of that income came from the Chinese market, according to Pirelli.

With local market experience and sales channels, ChemChina will support Pirelli’s innovation in China, which also complements the “Made in China 2025” strategy, Ren said.

In addition to a great performance in the world’s largest auto market, China’s improving business environment is also an attractive factor, Marco Tronchetti Provera, executive vice chairman and CEO of Pirelli told CGTN on the sidelines of the media briefing.

China’s opening-up policy in the auto sector will attract more investment and bring better growth opportunities for the whole industry, he said.

The Chinese government announced in April it would gradually ease restrictions on joint ventures in the auto industry, removing foreign ownership caps completely by 2022.

Last October, Pirelli started trading on the Milan stock market, where it had traded since 1922 before delisting in 2015 due to the ChemChina acquisition deal.

After being taken over by ChemChina, Pirelli streamlined to focus on high-end consumer tires for brands including Audi, BMW and Mercedes, folding its truck and industrial tire business into a unit of ChemChina.