, MILAN, Nov 6 – Italian tyre maker Pirelli said on Wednesday it will invest up to 1.6 billion euros ($2.16 billion) over four years to refocus its activities on the high end of the market.
The price of shares in Pirelli was up 4.59 percent on Milan’s FTSE stock market after the announcement.
Unveiling its strategic plan for the period 2013-2017, Pirelli said it would accelerate its shift into the premium sector, which it expects to grow three times as quickly as the standard tyre segment, by 7.3 percent a year.
The top-end of the global automobile market is set to continue growing, reaching close to 10 percent in 2017 compared to 9.1 percent in 2013, while the number of cars is also expected to rise by 3.7 percent a year until 2017.
The group said it was targeting an operating profit margin of more than 15 percent by 2017.
Planned investments in Europe and Latin America will see Pirelli production capabilities in the premium sector grow to 63 percent by 2017 — compared to 48 percent at present.
The group also intends to continue with a planned expansion in Russia, described as a “strategic market” despite a slowing economy, particularly because of a demand for winter tyres.
It will continue redeveloping two factories purchased there, it said.
Pirelli was founded in 1872 and operates in more than 160 countries.