Joint Venture Formed in China to Serve OEMs
13 November 1998
Tenneco Automotive and Shanghai Tractor and Internal Combustion Engine Corporation Form Joint Venture in China to Serve OEMs in the World's Fastest Growing Market
LAKE FOREST, Ill.--November 12, 1998--In a move designed to strengthen its commitment to the Chinese automotive industry and better serve global original equipment customers, Tenneco Automotive has entered into a joint venture agreement with Shanghai Tractor and Internal Combustion Engine Corporation (STEC), a subsidiary of Shanghai Automotive Industry Group Inc. (SAIC), to produce automotive exhaust products and systems. The joint venture partners, under the name Shanghai Walker Exhaust Systems Corporation Ltd., expect to begin production by mid-year of 1999.
"We are delighted with this opportunity to establish an agreement with strong partners such as STEC and SAIC to serve our customers in the Shanghai market where over 50 percent of China's passenger cars are produced and marketed," said Thomas E. Evans, president of Tenneco Automotive. "This agreement with Shanghai Tractor and Internal Combustion Engine Corporation significantly expands Tenneco Automotive's ability to use Walker exhaust technology to serve our global OEM customers manufacturing in China," added Evans.
Initially, the Shanghai Walker Exhaust Systems Corporation Ltd. will supply complete exhaust systems to Shanghai-Volkswagen for the B5 (Passat) platform in China, also known as the third generation Santana. The Shanghai-Volkswagen Santana currently represents more than 40 percent of the 500,000 unit Chinese passenger car market.
The joint venture with STEC is Tenneco Automotive's third joint venture in China following the formation of Monroe Automotive Shock Absorber Co. Ltd. with Beijing Automotive Industry Corporation in 1995, and Dalian Walker Gillet Muffler Co. Ltd.with Jinzhou Automotive in 1996.
The growth potential for the joint venture is significant given the Chinese government's announced intention to implement new environmental regulations requiring catalytic converters on all new vehicles sold in 1999 and beyond. "Combining Tenneco Automotive's global exhaust technology with the joint venture's unique position as part of the SAIC group provides excellent prospects for future business," said Evans.
Tenneco Automotive will own a majority interest (55 percent) of the new Shanghai Walker Exhaust Systems Corporation Ltd. joint venture.
Tenneco Automotive, headquartered in Lake Forest, Ill., manufactures the world's leading ride control and exhaust management products and systems under the global brand names of Monroe(R) ride control and Walker(R) exhaust. With sales revenue of over $3 billion, the company operates 74 facilities in 22 countries in North America, Europe, Africa, South America, Australia and the Asia Pacific Rim region. Tenneco Automotive's parent company, Tenneco , is an $8 billion global manufacturing company based in Greenwich, Conn.