# Asian 'dumping' and Pirelli's response: the challenge of a level playing field and quality in industry

Brazil's automotive industry and its supply chain face a severe competitive imbalance in the replacement market.

- Section: Automotive
- Published: October 19, 2026
- Address: https://ceoone.com.br/en/article/asian-dumping-and-pirelli-response-the-challenge-of-a-level-playing
- Em português: https://ceoone.com.br/artigo/dumping-asiatico-e-a-reacao-da-pirelli-o-desafio-da-isonomia-e-da-qual.md

![A Pirelli racing tire with a red band, seen up close](https://pub-b80e49b2737940b3ab5d3f20d0578192.r2.dev/artigos/dumping-asiatico-e-a-reacao-da-pirelli-o-desafio-da-isonomia-e-da-qual-foto.webp)

Photo: Rob Wingate/Unsplash

## Key points

- The share of imported tires in replacement retail went from 30% to more than 70% in just a few years.
- According to Cesar Alarcon, Pirelli's CEO for Latin America, some imports cost less than the raw material local factories pay for.
- Pirelli supplies tires to the Chinese automakers based in Brazil and has developed a line for electric cars.

In an exclusive interview, Cesar Alarcon, Pirelli's CEO for Latin America, warns about the impact of a massive influx of imported tires, particularly from Southeast Asian manufacturers, sold in Brazil at prices below local factories' production costs. Using a direct metaphor about the unequal conditions of competition, the executive sums up the current situation: "We're taking the field with 8 players while our opponents come in with 11."

For executives, board members and decision-makers in industry, the dumping complaint sheds light on a central management challenge: how to protect margins, jobs and supplier ecosystems when international competition operates outside the rules of market balance.

## An invasion of the replacement market and the destruction of value in the chain

The price gap has radically changed the consumption map of Brazil's replacement market. In just a few years, the share of imported tires jumped from 30% to more than 70% of sales in specialized retail. According to Alarcon, the final price of some foreign products is even lower than what local manufacturers pay for the raw material alone.

This distortion affects not only the multinationals based in Brazil, but destabilizes the entire domestic production chain. The sector generates 35,000 direct jobs in Brazil, plus 500,000 indirect ones, paying about R$ 2 billion in wages and generating almost R$ 5 billion in taxes a year. The executive stresses that Pirelli openly supports free competition and free markets, as long as the game is played on a level field; otherwise, the result is the progressive destruction of value for suppliers of steel, rubber and chemicals and for the retail network.

## Differentiation through innovation: the B2B strategy with Chinese automakers

In the face of the retail price war, Pirelli's strategy is to refuse to lower safety standards or production costs to compete at the level of commoditized products. The corporate response relies on delivering added technology, superior quality and stronger partnerships in the original equipment (B2B) channel.

With the expansion of Chinese automakers in the domestic market, Brazil has become the world's eighth-largest producer of light vehicles. Pirelli moved quickly to become the official tire supplier for the new plants set up in the country, turning the advance of Asian vehicles into a local business opportunity. For the executive, giving up technological content to gain temporary competitiveness would be the industry's main mistake at a time of transition.

## The electric vehicle revolution: engineering for new requirements

The transition to an electrified fleet has brought new technical challenges for materials engineering. Electric and hybrid cars require tires with significantly higher specifications than combustion models, because of three critical factors: the heavy weight of the batteries, the immediate delivery of torque (instant acceleration) and the need for lower rolling resistance to preserve battery range.

To serve this segment, the manufacturer developed a line of reinforced products that ensure grip and durability under high mechanical stress. Using conventional or low-quality tires on electric vehicles speeds up rubber wear and compromises driver safety. For Alarcon, the ability to develop tailor-made engineering for this new vehicle architecture reinforces the thesis that market leadership is built on technology, not on the lowest price.

## Leadership lessons and corporate impact

Pirelli's stance in the face of unfair competition offers practical strategic management lessons for C-levels and board members. First, its refusal to compromise on quality shows that lowering the product's level to try to keep up with low-cost competitors destroys the brand's reputation and undermines the business's long-term sustainability. At the same time, capturing new market fronts shows that following the arrival of new global players, such as Chinese automakers, and becoming their local supply partner is crucial to defend production volume.

In addition, the continued focus on research and development aimed at technological trends, such as creating products specifically for the electric vehicle fleet, builds solid barriers to entry against commoditized competitors. Finally, the leadership's stance in defending a level playing field and the value chain reinforces the role of executives in working for clear market rules, showing the economic and fiscal impact of dumping on society as a whole.

## Sources and editorial notes

- Reference reporting: O Estado de S. Paulo (September 30, 2026 edition, Jornal do Carro section, interview with Cesar Alarcon by Giovanna Riato and Isadora Carvalho).
- Market and leadership analysis: Content and analytical context developed by the CEO ONE portal for decision-makers and C-level executives.

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