Strategy by business segment


Pirelli aims to achieve market leadership in 2015 by:

  • developing marketing activities targeting Premium customers. Pirelli will further segment the Premium clientèle with the goal of becoming the point of reference in the decision making phase of acquisition, through initiatives aimed at the consumer and trade. Spending on marketing activities will more than double between 2012 and 2014. All resources, programs and internal levers of the business unit will be focused on the Premium segment;


     
  • An unprecedented range of Premium products, with an offer that spans the P Zero, Cinturato, Scorpion and Winter series. Product innovation will be further accelerated, with the launch of 18 new projects in 5 years compared with 16 in the last 10. By 2015, 57% of sales will derive from new products and the number of products belonging to the Premium category will grow by 28% between 2011 and 2015. Particular attention will be dedicated to the Winter products with the aim of satisfying growing demand: sales and capacity in this segment are expected to grow by 40% by 2015 (around 90% including Russia) and an increase of the offering (Studdable, Ice, Sottozero, Scorpion Ice);
     
  • development of partnerships in original equipment to support technological leadership and after-market activities; Premium weight on OE will reach 80% in 2015;


     
  • innovation extended to distribution and retailing to provide Premium Consumers with the best experiences by increasing the geographical coverage (+40% in Europe), optimizing distribution channels and by opening new Pirelli stores;
     
  • by 2015 the Premium production capacity in new plants in rapidly growing economies will increase. In 2015, over 60% of Premium capacity will be located in new plants and 69% will be in countries with competitive industrial costs. Of the business unit's investment, around 80% will be destined to volumes/quality/mix;

     


Target Car


The revenues of the Car segment are estimated to grow from an expected 3.5 billion Euros in 2011 to 4.3 billion Euros (including Russia) in 2012 and to 5.1 billion Euros in 2014: at the conclusion of the period the Premium segment will account for 58% of sales compared with 50% in 2011. The EBIT margin of the Car segment will pass from an expected 12% at the end of 2011 to 13-14% in 2012 and reaching 17-18% at the end of 2014.



There will be a noticeable increase in the weight of the Premium segment in the total sales of the various geographical areas: in particular, it will rise from 68% in 2011 to 78% in 2014 in Europe, from 41% to 53% in the Middle East and Africa, from 58% to 71% in the Apac area, from 55% to 66% in the Nafta area and from 13% to 21% in Latam. In Russia, the decline from 41% to 27% is linked to the integration of the legacy volumes of the acquired assets. Russia, Mea and Latam therefore have great potential for further development that Pirelli is going to pursue. Pirelli premium brand marketing initiatives have also been strengthened by its renewed commitment to Formula 1.



Last Revised: 04 Jan 2013