Tenneco Automotive And Eberspächer Enter Luxury Market In China
Companies Form Joint Venture to Supply Exhaust Products to BMW and Audi
LAKE FOREST, ILLINOIS, November 24, 2003 - Tenneco Automotive (NYSE: TEN) and Eberspächer International GmbH announced today that the companies have signed an agreement to establish Walker-Eberspächer Automotive Exhaust System Co., Ltd, a joint venture in China. The joint venture will manufacture and distribute emission control products and systems for BMW and Audi vehicles produced in China.
Subject to receipt of governmental approvals and other customary conditions, the company expects the joint venture company to be formally established by early next year and to begin production in 2004.
The joint venture will leverage the strengths of two of the world's leading manufacturers of emission control products in order to serve BMW and Audi in the rapidly expanding Chinese automotive market. The joint venture will operate just-in-time (JIT) final assembly manufacturing operations in Dalian and Changchun, China at Tenneco Automotive's existing joint venture facilities in those cities. Initially, the Dalian facility will supply BMW 3 Series vehicles produced by Brillance in Shenyang. The Changchun facility will supply Audi A4 vehicles produced in the same city by FAW-VW.
"One of our key strategic initiatives is to grow our businesses through alliances and joint ventures. Tenneco Automotive is well established in China and we are pleased to work with Eberspächer to best serve BMW and Audi," said Mark P. Frissora, chairman and CEO, Tenneco Automotive. "Together we bring outstanding capabilities to the Chinese luxury car market through the combination of Tenneco Automotive's strong manufacturing presence in China and Eberspächer's history of supplying these platforms in Europe."
The joint venture will be owned 30 percent by Tenneco Automotive directly, 25 percent by one of Tenneco Automotive's existing majority-owned joint ventures in China and 45 percent by Eberspächer.
"It is important to team with the right partners and leverage those relationships in order to grow in this dynamic market," said Tim Donovan, executive vice president and managing director, international group, Tenneco Automotive. "This new joint venture is another step in our strategy to diversify our customer base and continue to expand our operations in China."
Tenneco Automotive established its first joint venture in China in 1995 and is currently the largest exhaust manufacturer in China. In addition to the Walker-Eberspächer Automotive Exhaust System Co., the company has joint venture operations in Shanghai, Dalian and Beijing and a just-in-time manufacturing facility in Changchun. The company reported 87 percent year-over-year revenue growth in China for the first six months of 2003.
Tenneco Automotive is a $3.5 billion manufacturing company with headquarters in Lake Forest, Illinois and approximately 19,600 employees worldwide. Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe® and Walker® global brand names. Among its products are Sensa-Trac® and Monroe Reflex® shocks and struts, Rancho® shock absorbers, Walker® Quiet-Flow® mufflers and DynoMax® performance exhaust products, and Monroe® Clevite® vibration control components.
This press release contains forward-looking statements. Words such as "will," "expects," "continue" and similar expressions identify forward-looking statements. These forward-looking statements are based on the current expectations of the company (including its subsidiaries). Because these forward-looking statements involve risks and uncertainties, the company's plans, actions and actual results could differ materially. Among the factors that could cause these plans, actions and results to differ materially from current expectations are: (i) the general political, economic and competitive conditions in markets and countries where the company and its subsidiaries operate, including currency fluctuations and other risks associated with operating in foreign countries; (ii) changes in automotive manufacturers' production rates and their actual and forecasted requirements for the company's products, including the company's resultant inability to realize the sales represented by its awarded book of business; (iii) changes in consumer demand and prices, including decreases in demand for automobiles which include the company's products, and the potential negative impact on the company's revenues and margins from such products; and (iv) the timing and occurrence (or non-occurrence) of transactions and events which may be subject to circumstances beyond the control of the company and its subsidiaries. Other factors that could cause the company's plans and results to differ materially from current expectations are described in the company's annual report on Form 10-K for the year ended December 31, 2002, to which you are referred for additional information. The company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.
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