Industry News

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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