How are you maintaining your technology leadership amidst tightening regulations?
As regulatory requirements evolve, Tenneco continuously strengthens its technology portfolio and global engineering capabilities to design and produce cost-competitive products to meet regulations anywhere in the world. From the expansion of manufacturing and engineering operations in Asia Pacific, to enhancing the company’s Core Science team focused on advanced R&D, Tenneco has made significant investments in products and people to grow and strengthen its leading technology position.
How is electric vehicle and hybrid powertrain growth expected to impact your growth expectations?
There is a lot of attention on electric vehicles and hybrid powertrains, however industry experts estimate that 96% of the light vehicles produced in 2030 will have ICEs, including various forms of hybrid vehicles, while only 4% of vehicles will be powered solely by battery electric and fuel cell electric drivetrains. It is worth noting that there will be more ICE powertrains produced in 2030 than today even if BEV production is significantly higher than forecast. Additionally, ICEs in 2030 will have 25 to 30 percent more regulatory content than today as emissions requirements become more stringent. While we continue to monitor the EV market, we see strong growth opportunities ahead for our business.
Can Tenneco benefit from autonomous driving and mobility trends?
Our Monroe® Intelligent Suspension advanced technologies are well-positioned for autonomous driving trends that we expect will require suspensions with “high speed rail” smoothness. In addition, shared mobility trends and the resulting greater vehicle utilization will increase the need for replacement parts and is expected to be very positive for Tenneco’s aftermarket business.
Is there an opportunity to grow the aftermarket?
Tenneco has strong leading aftermarket positions in North America, Europe and South America. We see significant opportunities in high growth markets such as China and India, and are investing to position ourselves as a leading aftermarket supplier in these regions. We are leveraging our expertise from mature markets to develop the right distributor base, drive brand recognition, and promote our experience as an OE-quality supplier.
Going forward, where is the biggest opportunity for margin expansion?
Margin expansion will be driven by many factors, beginning with increasing technology content growth in both product lines, growth of the aftermarket globally and the expected commercial truck and off-highway market recovery. Further margin growth will also be driven by our efforts to achieve best delivered cost including 1) driving continuous improvement in our operational performance, 2) optimizing product component design and manufacturing process complexity and 3) improving the design of global manufacturing and supply chain networks.