Famed Italian tyre maker Pirelli, now owned by Chinese petro chemical giant ChemChina, has said it will be targeting the Australian truck tyre market and is aiming for an ambitious 10 per cent of the market.
The hard fought and fiercely competitive truck tyre market in Australia is one of a number of markets the Italian tyre maker will be targeting as its new Chinese owner urges an expanded product range and better profitability.
The company is going after a greater share of the commercial vehicle tyre market – including in Australia according to reports automotive trade publication Go Auto last week.
Pirelli was acquired last year by ChemChina for $9.8 billion and a large amount of its expansion will be on the back of production from ChemChina’s own China National Tire and Rubber(CNTR) plants.
Pirelli has attempted to ramp up its penetration into the Australian truck tyre market but the lack of a full range meant it was always starting with a handicap.
Using production from CNTR plants will allow Pirelli to seriously target the Australian market with tyres in different price segments. It will use the Pirelli brand to targeting the top-tier premium tyres and its CNTR brand tyres in the budget sector of the truck market.
Pirelli does have a presence in the commercial tyre business in Australia but only has top end premium truck tyres.
Tyres made and supplied by CNTR will allow Pirelli in Australia to offer tyres across the entire commercial market without watering down its premium brand.
Pirelli executives have told the media that that the new Chinese ownership would allow the company to mount a significant assault in all industrial markets.
This will apparently mean Pirelli will remain a premium brand and it will be in the tier one of price while CNTR’s brands will be positioned in tier two and tier three price segments
The split would create the lower tiers catered for by CNTR through its Aeolus and Guilin truck and agricultural tyre brands.
With the many fleets in Australia Pirellis says it did not have a wide enough range with multiple price points to make a real impact in the past. But the company now believes it has the opportunity to penetrate the market with all the price tiers.
The company is targeting a market share rise to about 10 per cent but not at the cost of profitability which is was of greater significance to the company than its market ranking.
Pirelli currently has about one per cent of the industrial and commercial market in Australia and believes it could rise to be about fourth in the overall rankings but says it is keen to be number one for profitability.