Pirelli's Next 150 Years Start With a Transformative Product Shift

As it passes its 150th birthday, Italian company Pirelli is transforming from a tire manufacturer to a technology company that makes tires.

In a recent interview, CEO Marco Tronchetti told Newsweek that, despite the changes in the industry, the company is keeping its spirit alive by focusing on its history of technological innovations.

"For me, it means the proudness of being at the help of such a company with history that goes through three centuries, and the responsibility to deliver a competitive Pirelli for the future generations." he said. "To continue for at least another 150 years."

Tronchetti has been at the helm since 1992, where he has spent the last four decades working to expand the company's international operations and integrate automation into the production process.

Before that, he worked for his family's maritime transportation company.

Pirelli was originally founded in 1872 to make rubber products. In 1896, the company was granted a patent for bicycle tires. Five years later, their first car tires hit the market.

Called the "Ercole," they were made with a new rim anchoring system that made it easier to withstand higher speeds than the common slick or radial tires at the time.

Tronchetti reflected on the origins of the company, saying that it was started at the right place and the right time, when technological innovations were ripe for development. "In the beginning, Giovanni Battista Pirelli was clever to understand the strength of the opportunity coming from technology," he said.

Pirelli CEO Marco Tronchetti
Pirelli CEO Marco Tronchetti (left) being interviewed by Italian journalist Ferruccio De Bortoli at the company's 150th anniversary celebration in January. Pirelli & C. S.p.A.

Advancements in materials research in the 1920s led to the development of a range of tires that were lower-pressure and easier to ride, including the Superflex and Stella Bianca lines.

The 1930s saw the switch from cotton to rayon, a synthetic fiber, in tire carcasses. The company opened its first synthetic rubber factory in the 1940s and in the 1950s, Pirelli started selling the Cinturato, the first tire built with a wrap-around radial structure.

A collaboration with Lancia, an Italian car brand now owned by Stellantis, yielded the wide radial tire. The standard radial tires available at the time couldn't withstand the needs of a Lancia Stratos on the track, so a tire with a reduced sidewall height and a radial structure to increase grip was created.

A century of research and development into compounds, grip and performance have followed Pirelli into its relationship with Formula 1 and other motorsports organizations. For Pirelli, it provides what Tronchetti describes as an "open-air lab."

Pirelli Cinturato P7 Tire
A Pirelli Cinturato P7 all-season tire. Pirelli & C. S.p.A.

The company has been the exclusive tire supplier for Formula 1 since 2011 and is a major influence in race dynamics. Before each race, the company selects three tire compounds for teams to use based on weather reports and track conditions.

The sport allows the company to see how its tires will behave at extreme temperatures and the highest speeds possible. Rally races test the tires' abilities in snow, ice, mud and other conditions.

"We can elaborate, through data analytics, all of the information to continue to improve safety, the environmental impact and the performance of our tires," he said.

As a natural extension of those analytics, the company debuted the HL tire last year. It's the company's first tire built specifically for electric and hybrid vehicles. Standing for "High Load," the HL tires are built to handle the extra weight that an electrified vehicle carries with its battery pack.

The company, Tronchetti says, is trying to maintain its advantage in a luxury car market that is starting to turn electric.

"We are the number one supplier of prestige cars," he explained. "Fifty percent of the market - Ferrari, Maserati, Lamborghini, Aston Martin, Porsche, Bentley - is Pirelli. One out of two cars coming from prestige manufacturers is Pirelli."

That, and implementing automation into the company's production process, were his biggest goals when he took the helm 30 years ago.

Pirelli Simulator
Pirelli employees regularly test their products in simulators. Pirelli & C. S.p.A.

Tires today go through much faster development cycles than they did in the past. Data analytics, advances in engineering and simulation technology allows the company to respond to challenges quickly. Tronchetti says that the Pirelli of the future will need to further combine skillsets to continue its success.

"We have to combine new competencies in data analytics and artificial intelligence with all of the competencies of materials, structures and chemicals," he argued. "That is something that is exciting. Digitalization is the name of the game."

By the beginning of 2023, Tronchetti expects to retire as CEO while remaining an advisor to the company. He sees great potential for the company, the industry and the world as a whole to come out of the pandemic better than ever.

"People are willing to build the future," he said. "And I think politicians around the world should leverage the positive side instead of underlying differences. So it can be a very interesting time in a positive sense. (The world) is volatile, but the will of the people is to grow."