Pirelli plans to end loss in Europe by exporting tires produced here to emerging markets, were demand continues to increase.
Friday, April 5th, Pirelli said that it has prepared a “significant review of its commercial structures” t offset loss caused by the weak economic conditions on the Old Continent. The harsh conditions in the region forced the company to delay the release of its 2013-2017 business plans from May 8th to November.
“The idea is to keep the factories busy in Europe where these tires are made producing premium tires to serve growing markets elsewhere,” said an anonymous source familiar with the matter. “It entails some extra transport costs, but the margin on premium tires is enough to cover it.”
According to the source, the Italian company does not plan to close plants or cut production outside Europe, as it is relying on growing sales in foreign markets to make up for the European loss and sluggish demand.
On another matter, top teams Red Bull and Mercedes try to convince Pirelli to rush last year’s tyres back into service as they are penalizing the best cars. Pirelli’s Paul Hembery, however, said the marque will only look to change tack if the teams “unanimously” demand it.
“If we do something, and suddenly two or three cars are no longer competitive but some others are suddenly faster, then we just have a new problem. We are analyzing the situation,” Pirelli said.