The core of Pirelli’s growth strategy is its consolidated capacity to innovate products and processes and consider new opportunities that might arise from ongoing research activities.
The exchange of know-how amongst the different business units, partnership with the best suppliers and continuous collaboration with major university research centres and leading car makers, ensure that the Group has technologies capable of developing cutting- edge products, successfully tested at major sports competitions, certified as original equipment by the most prestigious car makers and transferred to highway use to satisfy specific customer requirements.
Traditionally focused on the development of new highend premium products (UHP, winter, runflat, SUV and motorcycle tyres), R&D activity has been complemented by increasing strategic attention to the reduction of environmental impact. This relies on a "Green Performance" strategy that calls for comprehensive eco-innovation, exploiting technological components and the most advanced know-how, the result of intensive research on materials, model prototypes, profiles, tread designs and production processes.
Research and development costs totalled euro 199.2 million, corresponding to 3.2% of net sales. The R&D costs related to the premium segment totalled euro 163.3 million, equal to 7.4% of premium product net sales. Sales were concentrated on high-end products, making it possible to achieve major results:
- in 2013, ten out of the twenty new car product lines planned for the 2011-2015 period were introduced, as previously announced;
- in the truck business, the evolution of Winter, Regional and Offroad products in the 01 series was successfully completed;
- in the motorcycle business, the new Enduro and Sport Touring products received top scores in 2013 tests;
- the first generation of the Cyber Tyre was intro duced on the market beginning in 2012, and the second generation will be introduced in 2015.
To achieve the targets set out in the business plan 2013- 2017, Pirelli intends to further reinforce its commitment to research and development in all business segments.
The R&D unit has its headquarters in Milan and ten regional centres, and relies on the collaboration of about 1,400 engineers.
It will develop 14 new product lines in the car business (including six winter tyres): six will be initially dedicated to the original equipment segment and eight immediately to the replacement segment. A portion of the new products will be sold on all markets, and a portion will instead be reserved for specific, individual local markets.
Six lines will also include niche products like Runflat and Seal Inside tyres. Aside from significantly expanding its product line, Pirelli will introduce other technological innovations. These will include the PNCS (Pirelli Noise Cancelling System), to reduce noise, and new materials and geometries intended to reduce the rolling resistance of certain products by up to 20% by 2017.
In the Moto business, Pirelli aims at consolidating its technological leadership with even better performing products. Plans call for the introduction of ten new Pirelli products and eleven new Metzeler products. In particular, a new line of radial tyres will be developed for 250-350 cc motorcycles on the Latin American market, while the Metzeler Custom Touring line will be launched in North America.
Pirelli will introduce 11 new tyres between 2014 and 2017 in the Truck business. These will include the new Regional tyre, which offers greater mileage and tyre tread reconstruction technology, the Highway and City tyres, whose rolling resistance is comparable to what is offered by its principal competitors, and rounding out the line of severe winter condition tyres. Finally, Pirelli will focus on development of the technology for reconstruction and customer service through the Cyber Fleet.
In the Agricultural business, Pirelli will transfer the radial tyre fabrication process to the replacement segment, invest in local production capacity and renewal of the product line, while establishing original equipment partnerships with top brands – John Deer, CNH and AGCO – in view of developing products that target specific local needs.