Strategy

-Pirelli Asia Pacific CEO, Giuseppe Cattaneo, revealed on Jan. 14 the company’s plan to double its market share in the Asia Pacific region in two to three years.  It will double its China plant’s production capacity of passenger car tires in 2012 and increase its marketing efforts in order to acquire in an early stage the same level of market shares as in Europe and South America, both taking leads in sales volume. (From an article in the Nikkan Jidosha Shimbun on January 15, 2011)

R&D Expenditure

(in million euros)

	FY2010	FY2009	FY2008
Overall	146	133	145
% of Sales	3.1%	3.3%	3.5%

Capital Expenditure

(in million euros)

	FY2010	FY2009	FY2008
Tire Sector	402	217	285

Cars
-In 2010, 77% of capex targeted activities in the consumer segment and improvement in production capacity in Romania, China and Brazil, growth in the high-end segment in Europe, and completion of the new Technological Center at Settimo Torinese with construction of the new, "Next MIRS" process line for the production of high-end tyres.

The Company will invest 100 million USD at its Merlo facility, Argentina by 2013. The Merlo factory produces passenger car, SUV and light truck tires. The investment will go to increasing capacity, which is estimated to rise to over 6 million units annually by 2013, an increase of over one million units from the present 5 million. By the end of 2010, Pirelli's sales in the country are expected to grow by 55% to 365 million USD and the target for 2013 is 500 million USD. (From a press release on October 20, 2010)