Tenneco to make elastomer-based NVH parts in China

By Liz White, ERJ staff

Shanghai, China-Tenneco Inc. announced 27 Feb that it is setting up a wholly owned elastomer component facility in Suzhou, China, as part of an expansion of its operations in China.

The engineering group said it will invest some $21 million in manufacturing and engineering facilities in China, adding a joint-venture emission-control engineering centre in Shanghai. Tenneco will also raise ownership in its Beijing ride-control joint venture to 65 percent.

"These expansions represent a significant portion of the estimated $21 million investment we intend to make in China over the next three years," said Mark Frissora, Tenneco's chairman, ceo and president, in a company statement. "One of Tenneco's key growth strategies is to expand in emerging markets and China is our greatest opportunity in this area."

The new rubber products unit, Tenneco Suzhou Vibration Control Company Ltd, is Tenneco's first solely-owned operation in China. A 5800-sq.m plant will be able to call on Tenneco's global elastomer engineering and manufacturing capabilities, and will supply elastomer components under the Clevite Elastomer and Monroe brands.

These elastomeric components are designed to help improve vehicle ride and handling, while reducing vehicle noise, vibration and harshness.

Tenneco said the plant, which will initially employ 80 people, is scheduled to open in June.

Tenneco's move into making its elastomer components in China is a major one. The group has only recently started production of these parts outside North America, setting up an elastomer operation at its suspension facility in Ermua, Spain, in late 2004.

Meanwhile, the new emission-control engineering centre will develop automotive exhaust products for Tenneco's growing domestic and foreign customer base-both OE and aftermarket-in China, and will be sited next to the company's Shanghai JV emission control plant, said the company. Opening is scheduled for the end of 2006.

This centre is part of the Tenneco's JV with Shanghai Tractor and Engine Company (STEC), a subsidiary of Shanghai Automotive Industry Corp. (SAIC). SAIC is one of China's largest automotive manufacturers and has joint ventures with both GM and VW, the statement pointed out.

Tenneco is also raising its majority stake in the Beijing Monroe Shock Co. from 51 percent to 65 percent, subject to government approval. Tenneco said it first went into the China market in 1995 through its JV in Beijing with Beijing Automotive Industry Corp. (BAIC). Today, the JV supplies ride control components to leading OE manufacturers at its newly opened 34 000-sq.m plant.

"With these investments, we are … furthering our strategy to expand in growth markets," commented Frissora. The Tenneco boss pointed out that, "Vehicle sales in China continue to grow rapidly; the mix is shifting to smaller cars; and, as the fleet begins to age, we expect the aftermarket to take off."

Tenneco estimates that it is China's number one supplier of exhaust systems to OE manufacturers, with five existing majority-owned JVs in China that produce mufflers, catalytic converters, shock absorbers and ride control modules.

Volkswagen (SVW), General Motors (SGM), Chery, PSA (DPCA), Daimler Chrysler (Beijing Jeep), Suzuki, Nissan, Audi (FAW-VW) and Ford are among the company's OE customers in China, Tenneco said.