Pirelli to make Cyber Tyres in US after Italy curbs China influence

- Pirelli PIRC.MI will start producing Cyber Tyres in the United States, it said on Wednesday, after Italy curbed the influence of the premium tyre maker's Chinese investor Sinochem 600500.SS in a bid to help its expansion across the Atlantic.

Italy's government last month ended a governance dispute over Sinochem's stake in Pirelli through its use of "golden powers" for companies deemed to be of national strategic interest.

The row related to fears Pirelli could fall foul of U.S. rules restricting the use of Chinese technology in the autos sector as Sinochem is its largest investor with a 34.1% stake.

Pirelli said it would begin manufacturing its connected Cyber Tyre products at its U.S. plant in Rome, Georgia, "strengthening the company's integrated industrial and technological presence in the country".

Cyber Tyre technology combines sensors embedded in tyres with software able to transmit real-time data to vehicles.

Pirelli presented its Cyber Tyre technology at the U.S. Commerce Department's SelectUSA Investment Summit.

The company said more details about its U.S. investment would be given in the coming months, after finalising its development plans for the Georgia factory, which already produces Pirelli premium tyres and includes an R&D centre.

The move "reflects our commitment to bringing advanced technologies ... closer to the market, further strengthening our industrial footprint and innovation capabilities in the United States," Pirelli's North America CEO Claudio Zanardo said.

Citi analysts said while a small-volume product, the start of Cyber Tyres production in the U.S. signals the Department of Commerce "is now more comfortable with Pirelli undertaking capex in the U.S. and producing this technology rich product".

Demand for digital and connected mobility is expanding rapidly in the U.S., which is seen by Pirelli as a key market for its most advanced products.

While the U.S. accounts for more than 20% of Pirelli's total revenue, the Georgia plant, the Italian group's only one in the country, only covers around 5% of its U.S. demand.