Pye will be moved aside at season's end for fellow youngster Scott McLaughlin, whose deal with the team was announced today.
The timing of the signing has surprised many who expected Pye to be given more time to prove his worth to the American-owned outfit.
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Pye had been hailed as the team's saviour last year when he stepped in to replace Marcos Ambrose, leading the squad's gradual rise up the pecking order.
Although directly choosing to draft in McLaughlin over keeping Pye, Cindric says he expects the latter to be snapped up by another outfit for 2017.
There remains much to play out in the silly season, with seats at several teams including Garry Rogers Motorsport, Walkinshaw Racing, Brad Jones Racing and Nissan Motorsport among those yet to be confirmed.
“I think he still has a lot of potential and he will be a winning driver in this series,” said Cindric of the 26-year-old South Australian.
“(But) from our team's perspective we needed to look at it really closely.
“When you look at what Scott McLaughlin has been able to accomplish in a very short period of time, he's finished in the top 10 in the championship every year he has been in it.
“It is well documented what his successes have been at some of the other levels (Dunlop Series).
“There's a point where you have to make a decision and this is our decision today.”
Pye had been given a Pirtek Enduro Cup seat at DJR Team Penske for 2015 when its downsizing to a single car for Ambrose temporarily left him out of a full-time drive.
When asked whether the team will provide a similar opportunity for 2017, Cindric stressed his expectation that Pye will be elsewhere.
“My assumption is that he has enough talent and I would be very surprised if he is still available for an enduro drive, but if he were we'd certainly be open to that,” he said.
Cindric meanwhile added that his team needed to move quickly on McLaughlin to ensure he did not sign for another team.
McLaughlin's current squad Garry Rogers Motorsport had made clear its hope to keep its driver, while Walkinshaw Racing was among others known to have been interested in his services.
Once the decision to sign McLaughlin had been made, Cindric says it was in the interests of both the team and Pye to make it public.
“It is never easy to make a driver announcement especially at this point in the year,” said Cindric.
“It is usually a bit early to do this.
“Scott Pye and I had some conversations earlier in the year and he was adamant he wanted to stay here given the chance.
“But if we were going to do something different he wanted to know as soon as possible so he has the best possible chance to find his next step.”