Pirelli (MIL: PIRC) stock price is 32% down year-to-end after the coronavirus pandemic dealt a big blow for all tyre makers around the world. The Italian company is now making strides to reboot its R&D department and improve its competitiveness amid ongoing challenges.
Fundamental analysis: Pirelli tweaks its R&D operations to stay on course throughout the pandemic
After being forced to close its factories in March due to coronavirus, the Italian tyre company Pirelli was in need of quick amendments to keep its business alive.
Pirelli’s new line of products was scheduled for launch in early 2021 so the company’s CEO Pierangelo Misani pushed his technicians and IT experts to get more research and development online in order to enable engineers to conduct virtual tests.
The pandemic sent Pirelli’s revenue down by a third in the first half of the year. The company had to keep its new tyre operations alive for its sales to bounce back next year.
“There are moments of crisis, like COVID, when you have to reshape and make yourself more efficient and that’s what we’re doing,” Misani told Reuters.
The Milan-based company has 19 factories across 12 countries and it is the only notable manufacturer operating solely in the consumer tyre market, producing tyres for luxury cars, motorcycles and bicycles – as well as Formula 1 racing cars.
The company achieved best results in the replacement market where it’s expecting to roll out three new sets of products by the start of next year – an ultra-high performance tyre for summer use, a new all-season tyre and a new winter tyre, said Misani.
“The epidemic prompted us to engineer tools to boost simulation and modelling