Pirelli was founded in 1872 and it’s among the top five leading tyre Manufacturer Company in the world. In 2012 Pirelli signed a joint venture with Indonesian automotive and motorcycle components producer Astra Otoparts.
South East Asia is the largest motorcycle market in the world, expanding at double digit growth, Pirelli is looking through this partnership to get a competitive source and a better knowledge of this high potential area.
The factory will have a capacity of 7 million pieces per year, the larger portion of the output will be sold in Asia while the remaining capacity will be allocate to European and North American market.
The production site is located 130 km East of Jakarta and first tire is due to be produced in May 2015, …show more content…
The three Pirelli representatives that I have interview are:
Mr. Paolo Benea - President Director Evoluzione Tyres (the JV between Astra and Pirelli)
Mr. Vittorelli Antonio – R&D Pirelli Industrial
Mr. Luca Zaccomer - APAC Marketing Director
All three stakeholders were positive toward the decision of the group to open an additional production plant in Asia.
Having a factory in Indonesia will help the group in reducing transportation cost, shortening transit time, improve product availability and keep inventories under control. Producing in an Asean country will grant a series of trade benefit among the southern Asian nations adhering to the free trade agreement.
APAC Marketing Director Mr. Luca Zaccomer believes that it will be challenging to penetrate the Asian market due to the fierce competition of local manufacturer.
Local producers are producing medium- low quality products at very cheap prices looking for large market share while Pirelli will probably need to target the niche of end user capable to look for superior performance. Pirelli main communication plan will reinforce concept such mileage, resistance, grip and …show more content…
Labor cost in Asia are still cheaper than other continent and proximity with natural rubber plantation will give an additional competitive advantage,.
Opening a new factory will also increase the group yearly output by 7 million pieces meaning that Pirelli will have now the opportunity to reach out more customers and therefore increase profits. Pirelli will probably decide to adjust prices and “buy” more market share in emerging market while in mature market, saving will be invested on branding activity and R&D.
Weaknesses:
The major weakness of opening a new factory is that it is a high capital investment also the high barriers of entry in Indonesia due to the high consumption of local goods means that Pirelli will have troubles finding more customers to increase their customer and distributors in Indonesia.
Opportunities
Provides an opportunity to lower the selling cost in Asia for the tyres as the factory is located in Asia therefore the shipping cost will be reduced. It also provides an opportunity to use PT Astra Otoparts distribution channels to reach out to more
South East Asia is the largest motorcycle market in the world, expanding at double digit growth, Pirelli is looking through this partnership to get a competitive source and a better knowledge of this high potential area.
The factory will have a capacity of 7 million pieces per year, the larger portion of the output will be sold in Asia while the remaining capacity will be allocate to European and North American market.
The production site is located 130 km East of Jakarta and first tire is due to be produced in May 2015, …show more content…
The three Pirelli representatives that I have interview are:
Mr. Paolo Benea - President Director Evoluzione Tyres (the JV between Astra and Pirelli)
Mr. Vittorelli Antonio – R&D Pirelli Industrial
Mr. Luca Zaccomer - APAC Marketing Director
All three stakeholders were positive toward the decision of the group to open an additional production plant in Asia.
Having a factory in Indonesia will help the group in reducing transportation cost, shortening transit time, improve product availability and keep inventories under control. Producing in an Asean country will grant a series of trade benefit among the southern Asian nations adhering to the free trade agreement.
APAC Marketing Director Mr. Luca Zaccomer believes that it will be challenging to penetrate the Asian market due to the fierce competition of local manufacturer.
Local producers are producing medium- low quality products at very cheap prices looking for large market share while Pirelli will probably need to target the niche of end user capable to look for superior performance. Pirelli main communication plan will reinforce concept such mileage, resistance, grip and …show more content…
Labor cost in Asia are still cheaper than other continent and proximity with natural rubber plantation will give an additional competitive advantage,.
Opening a new factory will also increase the group yearly output by 7 million pieces meaning that Pirelli will have now the opportunity to reach out more customers and therefore increase profits. Pirelli will probably decide to adjust prices and “buy” more market share in emerging market while in mature market, saving will be invested on branding activity and R&D.
Weaknesses:
The major weakness of opening a new factory is that it is a high capital investment also the high barriers of entry in Indonesia due to the high consumption of local goods means that Pirelli will have troubles finding more customers to increase their customer and distributors in Indonesia.
Opportunities
Provides an opportunity to lower the selling cost in Asia for the tyres as the factory is located in Asia therefore the shipping cost will be reduced. It also provides an opportunity to use PT Astra Otoparts distribution channels to reach out to more