Faced with the rapid changes in the Chinese automobile market, Pirelli is accelerating the implementation of its ESG strategy and promoting the localization of the supply chain.
“China is not only the world’s largest tire and automobile market, but also the fastest growing market.” Recently, Pirelli Asia Pacific CEO Mazanin said that in the company’s strategy of “focusing on high-value groups”, China is the most important and attractive market that the company can serve.
“The company integrates elements of sustainability and innovation into its tire products.”
According to the “2025 China Semi-Steel Tire White Paper”, my country’s current demand for green tires has grown significantly, with sales accounting for 23% in 2024, an increase of 8 percentage points compared to 2020.
At the same time, the demand for environmentally friendly raw materials such as bio-based bananas and silica is gradually increasing, and environmentally friendly attributes have become a new fulcrum for brand premiums.
In this regard, Juliano, chief technology officer of Pirelli Asia Pacific, said that Pirelli is using the braking system in the company’s technical reserves as a starting point to cooperate, including Chinese brands.
“The company believes that there will eventually be a variety of functions that can be used by end users, especially in the Chinese market and new models. This will be the best place for the company to carry out advanced pilots for other markets around the world.”
The tire market is changing rapidly
In recent years, as the sales and ownership of passenger cars in my country have continued to grow, the market size of the tire industry has also continued to expand.
According to the “2025 China Semi-Steel Tire White Paper”, as of 2024, the overall size of my country’s tire market has exceeded 600 million units, with a compound growth rate of approximately 10% from 2019 to 2024.
At the same time, the domestic market is also changing.
The sales proportion of mid-to-high-end tire brands will gradually increase, from 33% in 2023 to 38% in 2024.
Although foreign investment is still the dominant force in the domestic tire market, its proportion is declining. As of 2024, it has dropped by 5% compared with the same period last year.
In this context, consumption has begun to drive structural changes in the tire market. The growing demand for mid- to high-end tires is further forcing manufacturers to accelerate technology research and development and promote an increase in the proportion of high value-added products.
The reporter noticed that as a tire company with a history of 153 years, Pirelli is also responding to changes in demand in the Chinese market.
In response to the current market demand for green environmental protection, Pirelli has launched the first tire containing more than 70% bio-based and recycled materials.
“This product accounts for more than 55% of natural and recycled materials, and is equipped with an Elect technology suite designed specifically for pure electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV).” Pirelli said that on the one hand, the company continues to increase investment in research and development and introduce new materials to replace fossil raw materials; on the other hand, it also provides third-party certification for the source, traceability and usage of these materials to ensure the reliability and substantiveness of the results.
“By 2030, the company’s goal is to have bio-based and recycled materials account for more than 80% of its flagship products.” However, Pirelli also said that the biggest challenge currently lies at the industrial level.
“How to build a robust supply chain of innovative materials that ensures sustainable output and reasonable prices while always maintaining the quality, performance and safety standards represented by the company’s brand.”
At the same time, Pirelli is also improving tire performance and safety through virtual development technology and integrating artificial intelligence into the R&D process.
“Take the company’s Cyber tires as an example. By integrating with the vehicle’s electronic system, it enhances the safety of auxiliary functions such as ABS anti-lock braking, traction and vehicle stability control. In addition, when applied to road infrastructure monitoring, it can improve the safety of all vehicles, even vehicles not equipped with this innovative system can benefit.” Pirelli said.
Intensify the layout of the Chinese market
In fact, in the face of rapid changes in the Chinese market, Pirelli has begun to take action.
“For many years, China has been driving the company’s innovative development. China is a more developed market, a market where new technologies are emerging, a market full of new opportunities, and the market where the company is developing the fastest in terms of new solutions, new materials, new suppliers and supply chains.” Pirelli’s head of sustainable development and innovative mobility, Martell, said that the company not only relies on China, but also learns from China to advance progress in all these aspects at the speed necessary to achieve its ambitious goals.
It is understood that Pirelli entered China in 2005 and has three factories in China, two in Yanzhou, Shandong and one in Jiaozuo, Henan. It has more than 5,000 employees in China.
The company’s retail network covers 31 provinces across the country, with a total of more than 3,000 sales points.
At the same time, Pirelli is also continuing to promote the digital transformation of factories in the Asia-Pacific region based on intelligent and flexible production, relying on technological innovation to drive sustainable development.
“The Yanzhou factory has become one of the company’s most advanced factories in the world, focusing on high-performance passenger car tires and motorcycle tires. The factory also houses the company’s first international-level R&D center in the Asia-Pacific region, with world-leading R&D capabilities. It aims to strengthen intelligent production lines, continuously improve product ecological safety performance in line with the current automotive market development trend, meet the environmental protection needs of new energy vehicle manufacturers, and provide high-quality products equipped with advanced innovative technologies.” Pirelli said.
In the future, Pirelli will also accelerate its investment in the Chinese market.
“Continued fluctuations in costs and key material supplies in the global supply chain have forced companies to adopt a new response in their operating models.” Juliano said that in the current competitive environment, compared with many regions around the world, the development level of local suppliers in China is more advanced.
“Thanks to this, the company is actively expanding more local supplier resources. The company has been practicing the strategy of ‘local-for-local’ for many years, and the recent supply chain crisis that has spread around the world has further strengthened the necessity of implementing this strategy. Therefore, developing localized supply chains in collaboration with the headquarters is the most important focus of the company’s local team in China at the moment, and its core goal is to protect our business and profits.”
