Pirelli Sees China Demand Holding Up, Counters Michelin Warning
(Bloomberg) -- Pirelli & C. SpA’s chief executive officer distanced his company’s fortunes from those of French competitor Michelin, saying demand for high-end tires remain strong in China.
The Milan-based company is still expecting double-digit volume growth globally, CEO Marco Tronchetti Provera said in an interview. Cie. Generale des Etablissements Michelin warned earlier Thursday of weaker sales for the second half of the year due to new emissions-testing standards in Western Europe and the slowdown in China’s auto market.
“We are very different from any other player in the tire industry” because of a focus on premium consumer tires, Tronchetti said in an interview with Bloomberg News. “We also don’t expect any slowdown on our addressable market for next year.”
Pirelli, which makes tires for luxury brands including Ferrari, McLaren and Bentley, generates about 83 percent of its profit from high-value tires. The company, which counts state-owned chemical company ChemChina as a major investor, is maintaining its targets for 2018, including adjusted Ebit of around 1 billion euros ($1.15 billion), Tronchetti said.
“The market is sound and will be sound,” Tronchetti, 70, said.
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