Does F1 make sense for Pirelli?

The Pirelli company is in a state of flux at the moment but it is doing well with 14.6% growth in revenues last year and profits up by 32%. The company is involved in the tyre and communications industries and in real estate development. There was a fourth division involved in the cable industry but this has been sold off. In an effort to strengthen its position as the owner of Telecom Italia, the company is now considering floating the tyre division, Pirelli Pneumatici SpA, on the Milan Stock Exchange although it will maintain a majority shareholding and control of the business. The tyre industry is a very competitive business, with three companies dominating the market: Goodyear, Michelin and Bridgestone/Firestone. Other companies are less global and concentrate more in specific regions and thus have potential to expand. Pirelli has long targeted the high-end performance market and has enjoyed a long association with the sport.

Pirelli has been very successful as the single tyre supplier in Superbikes in 2004 and 2005 and expanding the idea into cars may be something under consideration as the Milan firm bids to increase its sales figures still further.

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