Pirelli Tyre Russia says the country’s current economic crisis is far deeper than previous turbulence experienced but the Italian manufacturer is in the market for the long haul.
Speaking to just-auto on the sidelines of this year’s Russian Automotive Forum (RAF) in Moscow, Pirelli Tyre Russia general director, Aimone di Savoia Aosta, outlined the company’s strategy to look to exports to make up some of the 17% market downturn last year but noted the supplier had not resorted to any redundancies.
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“Today the strategy of Pirelli is let’s try to survive and get over this period,” said Aosta. “There is a big difference with this crisis – this is much stronger.
“Pirelli is definitely a company that has chosen for much more than a decade to be on the premium side of the market. Frankly, a positive message in a time of deep crisis, Russia [Pirelli] has not reduced [staff].
“We decided to go brownfield in Russia to have a fast approach to the market. Obviously we did not see the crisis immediately. We do not regret our approach. We are in a joint venture with a very important company, with Rostec, which helped us a lot getting into brownfield. It would have been very difficult for a company like Pirelli to deal with existing relationships [otherwise].
“We have decided to localise all of the winter range more and more. This is more profitable for us and gives us a much more premium aspect on our Russian plants. Pirelli has roughly a 23% share of the market. Every fourth car produced in Russia was fitted with our product made locally.”
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By GlobalDataAosta estimated this present crisis will last far longer than Russia’s previous downturn in 2008 with the market recovering perhaps in 2018.
As for exports, Pirelli Russia says it sold 400,000 pieces in 2014, “real peanuts,” noted Aosta, while adding the manufacturer had capacity to grow the sector as well as the domestic segment, which he values at EUR1.3bn (US$1.5bn).
“Today, most of this goes through tyre wholesalers. Pirelli is here to stay and we are not even remotely thinking of reducing our investments in Russia,” said Aosta.
