Market Situation and trends – Mark Karl Wilhelm, General Manager Pirelli Tyre Nordic

The recovery of the Swedish Economy and the celebration of a crown princess about to be married

Soon the Crown Princess of Sweden will get married and thousands of tourists are coming to Sweden because of their interest in this big Marriage. This will be beneficial for the Swedish economy but we can not only rely on that for the growth of the Swedish economy.

We have seen the worst of the Financial Crisis and countries all over the world are seeing a recovery in the economical growth with an increase of the demand for products and services.

The Swedish GDP increased by 3% the first quarter 2010 compared to the same period last year.

We are happy to see that the new car registration in Sweden January – April has increased by 36, 4 % compared to the same period 2009, in May the increase was even higher 37, 2 %. This is a good indication of the recovery in demand from the end consumers and companies.

Pirelli Tyre Nordic’s sales in Sweden have exceeded this growth during the same period, so we are very happy with that result. We have focused a lot on increasing our sales to the retail market and that has been a winning concept.

We see no reason why the increase in demand should not continue and we think we will see good results from our side and from the whole industry for the rest of 2010.

Rubber prices are at a historical high

Since the end of 2009 the price of raw rubber has increased at a fast pace reaching an all time high in April this year. End consumers have not seen yet any big change in the price level of tyres in Sweden, most likely due to the improved value of the SEK versus the Euro,  While this situation will probably not last, it  is hard to say when it will result in increased pricing for the Swedish consumer.

The environmental discussion pushes the tyre industry in the right direction

No one could have missed the environmental debate about climate change and what all of us can do to take our environmental responsibility. For the tyre industry this has resulted in more environmental ways of manufacturing tyres and the use of more environmentally friendly materials.

Pirelli has far exceeded the environmental requirements for tyres sold in Europe with its own range of “green” tyres, the Cinturato family, which give drivers the same, if not better, performance than the previous non environmentally friendly versions.  We have had great success in the Nordic and European tyre tests reinforcing Pirelli’s position as the tyre manufacturer with the best balance among safety, all around performance, and a green heart.

We can see a big demand from the market on our Environmental friendly tyres and these tyres stands for most of our summer sales. The new tyres are more silent, have a lower rolling resistance and last longer than the previous tyre models and we can see that those features are exactly what the end user is asking for.

The biggest news from our side regarding environmental tyres is our new environmental friendly SUV tyre, Scorpion Verde. Scorpion Verde was launched in the middle of March this year. It is our first environmental tyre for Sport Utility Vehicles and we can see a big demand for this product in that car segment. So far we have received a really positive feed back from the market.

So far we have only seen the beginning of the green revolution in the tyre industry, but a lot of things are happening to make sure that we reach an environmental sustainability for all of us.

/Mark Karl Wilhelm, General Manager Pirelli Tyre Nordic

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