By Denna Bowman
Pirelli is set to announce plans to set up a production base in Mexico in order to supply tyres to the growing North American market, according to the Financial Times.
Last week the Italian tyres manufacturer used its 100th anniversary celebration in Argentina to announce it was investing $100m in Argentina over the next three years,
Now Marco Tronchetti Provera, president and chief executive of the Italian tyres company, has revealed in an interview with the FT that Mexico could become part of its global expansion programme.
He said told the newspaper: “The plan is not yet finalised, but in our picture it makes sense to produce in Brazil and Argentina for the regional Latin American market and to supply America from within [a country that is part of the North American Free Trade Agreement] instead of from Latin America.
“For us it is more convenient to invest in Mexico because there are many carmakers investing there,” he said.
According to the FT, the lower labour costs in Mexico were another key factor in the decision to open a facility there.
Pirelli says tyre sales rose in the US and Canada at a “high double-digit rate” in the second quarter this year and the North American market accounted for about 9 per cent of global sales.
While Pirelli is “happy” with its 5 per cent share of the world market but is increasingly focusing on premium tyres for sports utility vehicles and top-of-the-range cars, as well as special performance tyres, such as “green” tyres that reduce fuel consumption and winter tyres.