Pirelli to invest USD200 Million for expansion in Mexico
Mexico:
Pirelli Tire North America Inc., the American subsidiary of Pirelli, is
planning to invest an additional amount of USD200 million for the expansion of its
tire plant in Silao, Mexico, which was built in 2012. The Mexico facility,
specializes in manufacturing high performance (HP) and ultra-high performance
(UHP) tires for passenger cars and light trucks. Besides that, the tire
production at facility would further be increased by 50% and will reach to 7.5
million units, annually, by the end of 2018.
As per Pirelli’s 2013-2017 industrial plan,
taking into consideration the current investment amount, the company’s total
expenditure on the facility would reach to almost USD630 million, wherein, the
production of the plant would take place from 2018. The company also specified
that the expansion is likely to generate several employment opportunities and
the number of employees in the facility is expected to increase from 1,400 to
over 1,800 people.
While discussing about the opportunities, Pirelli
stated that the investment depicts the importance of Mexico facility among all
the other international operational sites of Pirelli, especially in the NAFTA region,
where premium tire sales grew by 24.3% in the past year (2015).
The officials at Pirelli proclaimed that the
company aims to strengthen its collaboration with OEMs, to support the launch
of new product lines like the Cinturato P7 All Season Plus, the Scorpion Verde
All Season Plus, the P Zero All Season Plus and side by side also focus to
increase the sales in the replacement channel.
According to a recent report published by TechSci Research, “Mexico Tyre Market Forecast and Opportunities, 2020” with a motorization rate of nearly
29% during 2014, the automobile market of Mexico embrace an enormous potential
for growth, thereby, promising a significant demand for tires in the country during
the forecast period. On account of expanding fleet size and
increasing sales of vehicles, coupled with the rising automobile production,
the country’s tire market is expected to incline in approaching years.
As per TechSci Research, Pirelli already
holds a stiff positon in the Mexico tire market. Moreover, the plan of further
expansion in Mexico would enhance the share of Pirelli in the country’s tire
market by the end of 2018. In addition, Pirelli is catering the demand of tires
to the NAFTA OEM market by manufacturing its products’, as per client request,
which is amplifying the share of Pirelli in entire North American region.
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