Italian tires race into the Chinese market

Gregorio Borgo, Pirelli's general manager operations

Pirelli & C. SpA, the world's fifth-largest tire maker, has set a goal to increase penetration into China's premium car market in its industrial plan updates for the years 2013-17.

In China, Pirelli hopes to increase its dealership network from around 2,000 points of sale to about 4,500 in 2017, the company said on Wednesday in London.

Gregorio Borgo, Pirelli's general manager operations, said Pirelli will focus on strengthening its partnerships with premium car brands to make sure Pirelli gains a larger share of the Chinese market.

Strengthening partnerships with premium car brands will also help boost the growth of Pirelli's dealership network, because it will build up demand for Pirelli tires by Chinese drivers, Borgo said

"Chinese end users are consistent when they go to the aftermarket to change their tires. So if they are happy with the original equipment tire they will stick to that make," he said.

Adding another advantage of Pirelli is it is the only manufacturer in China able to produce run-flat tires.

To supply China's growing car market, Pirelli is currently expanding its manufacturing base in Yanzhou, Shandong province, and it is expected to become Pirelli's largest global manufacturing center next year.

Borgo said that manufacturing car tires in China is relatively cheaper than elsewhere, but promised to ensure the tires manufactured in China are of the same quality as tires manufactured elsewhere.

The reputation of Pirelli received a boost when the company won an exclusive three-year contract with Formula One in 2011.

Borgo said the Formula One contract has increased Chinese consumers awareness of the brand , and Pirelli has been building this through the use of social media marketing.

Pirelli began manufacturing truck tires at its Yanzhou plant in 2005. Then in 2007, it added a production line for manufacturing car tires with the capacity to produce 5 million tires a year.

Pirelli's tires are traditionally considered high performance products, as they grace the wheels of some of the world's most desirable marques such as Aston martin, Bentley, Ferrari and Lamborghini.