Pirelli Tyres Announces A Joint Venture In Japan

Tokyo, December 2, 1998 - Pirelli Tyres announced today a joint venture agreement with Abe Shokai to jointly operate in the Japanese market. This commercial joint venture, which will address the replacement market, will strengthen Pirelli's operations in Japan, where it is one of the leading imported brands and n01 in High Performance car tyres.

The joint venture, which will be managed and controlled at 51% by Pirelli Tyres, and for the remaining 49% by Abe Shokai, will market and distribute car, recreational, motorcycle and agricultural tyres in Japan: the objective is to double sales volumes to over 600,000 units by the year 2000. Through the new company, Pirelli will directly distribute tyres to the local market, with a network of approximately 100 point of sales and over 2,000 indipendent tyre dealers throughout the country, thus improving its commercial efficiency and effectiveness.

This new initiative will be supported by a global investment of approximately 1.7 billion Yen (over 20 billion Lira), the largest Italian investment in Japan in the current year.

With this joint venture, Pirelli aims at improving its marketing and sales effectiveness, rationalizing the logistics system by centralizing order taking and delivery, and fortifying marketing and promotional activities.

Tyre distribution in Japan is undergoing a thorough transformation and modernization, with the growing of autosupermarkets and franchising shops with a strong focus on customer service. The new joint venture thus allows Pirelli a closer presence in one of the most demanding and innovative markets in the world.

Pirelli Tyres has been present in the Japanese market since the late Sixties, through its sole distributor Abe Shokai, with a strong focus on the top of the range tyres, thanks to which it has gained an exceptional brand awareness and a high profile image. It currently sells a complete range of products, including P6000, Pirelli's biggest success tyre in the high performance segment for saloon cars, and PZero, Pirelli's fastest tyre fitting supercars and sportcars from Ferrari to Porsche.