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Pirelli looks to keep growing in Australia

Not tyred yet: Pirelli’s Australian market share currently sits at seven per cent but is likely to continue to grow in the coming years.

Growing car parc, sales channel relationships to lift Pirelli’s local market share

13 Nov 2019

PIRELLI Tyres Australia says it is planning to grow its market share over the next three years by leveraging increasing demand for high-performance vehicles, a growing car parc and its strong relationships with its sales channels, including competitor-owned retail chains.


Speaking to journalists last week in Melbourne, Pirelli Tyres Australia managing director Pierre-Olivier Chevalier stressed that “there is a real passion about automotive in Australia”, making the market ripe for the Italian tyre-maker.


“The demand in terms of prestige [Aston Martin, Bentley, Ferrari, Lamborghini, Maserati, McLaren, Pagani and Porsche], and premium [Alfa Romeo, Audi, BMW, Jaguar, Land Rover, Mercedes-Benz and Volvo] cars is there,” he said.


“But what makes things a little bit different in Australia is when we’re talking about – for instance – BMW, we’re talking about M, when we’re talking about Mercedes, we’re talking about AMG, when we’re talking about Audi, we’re talking S and RS.


“So basically, the Australian market is really open to uplift, I would say, in the level of the cars, which for us is extremely pleasing to see because obviously the more we go up, the more we have a bigger share.”


Mr Chevalier said that while Pirelli focuses on the prestige and premium segments, its tyre range still covers “99.5 per cent” of the Australian market, which he described as “interesting” due to the presence of “cars from all over the world”.


“We have a high share of European cars, a high share of American cars, a high share of local brands – there are cars here we don’t see anywhere else in the world – and a high share of Asian car-makers, as well,” he said.


“Everything makes this market quite interesting, so of course we have to adapt our product to the largest (number of) people.”


Mr Chevalier said Pirelli is looking to further grow its Australian market share over the coming years, with it currently sitting at about seven per cent – which is up from four per cent in 2016 and good enough for fourth among the tyre-makers – although it does lay claim to 17 per cent of the local prestige and premium segments combined.


“The car parc keeps growing in Australia, and the prestige and premium car parc is growing faster than the rest of the market, so I would say that our (share) should naturally grow in the coming years,” he said.


“If we talk about premium and prestige today, we have market leader position in the segments we are focusing our efforts (on).


“And obviously the plan is to keeping extending our market position.”


For reference, on a global scale, the prestige market is seven times larger than it was 20 years ago, while the premium market has tripled in size. The mainstream market has only grown by 50 per cent during that time.


Mr Chevalier said that Pirelli’s Australian performance is significant “considering we’re growing without any retail (presence) behind us” while the top-three tyre-makers do.


“We are growing through our own customer network, which makes us, today, the only independent premium tyre manufacturer on the market, which is not the case for our competitors,” he said.


Mr Chevalier added that Pirelli is “present in the most relevant channels” in Australia, “starting with the big retailers and well-known chains like Bob Jane (T-Marts), Jax (Tyres), Tyrepower, for instance”.


“We are also growing very fast in a new channel, which is the car dealers,” he said. “If you got to any car dealers from (mainstream) to prestige, you have the possibility to also fit (Pirelli) tyres – this is fastest-growing segment.


“We are also present in what we call the sub-outsellers and outsellers market, so people who are distributing all over the country. Considering that Australia is a big country with big distances, obviously logistics is a key criteria to provide the right availability.


“(Then there) is internet, which is a segment that is growing, but I still feel the market in Australia is really focused on the retail.


“And obviously still have very many independent stores across the country, where people are buying and fitting tyres.”


Despite the presence of several large competitor-owned retail chains, Pirelli Tyre CCO of north-east Asia and Pacific Dimitrios Papadakos said there is a key reason why they are not viewed as an issue.


“All of our competitors have decided to invest in specific chains here in Australia, but all of them have only one common thing: all of them buy Pirelli. They need us. We have so many exclusive OE fitments [more than 700 in the prestige segment] that they’re coming to us,” he said.


“So the decision of Pirelli is to invest where we know we can do better, (which is) R&D and production. Honestly speaking, as the producer of a brand, touching the end-user is not our job – this is my feeling because we know well how to produce and sell the tyres to our specialist and our partners.


“We’re open to everybody to sell tyres, and right now we’re very happy because we’re friends with all of them.”


Mr Papadakos said that Pirelli will still invest in the Australian market as part of its plans “to stay for a long time”, with the Asia Pacific region last year representing 17 per cent of its global revenue.


“Of course we talk about prestige and premium is our DNA, but our growth will come also from the (mainstream) sizes and cars because we want to grow everywhere,” he said.


From a global perspective, Pirelli has a commanding 50 per cent share of the OE-fit prestige segment and claims “co-leadership” in its premium counterpart.


Mr Papadkos said that “90 to 95 per cent” of prestige vehicles’ first “three or four” tyre replacements are like for like, ensuring that Pirelli’s segment dominance continues well after the OE fitment.

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