Tenneco schedules three Indian plant starts during 2027

Tenneco Clean Air India Limited expects three new Indian facilities to start production in calendar 2027, with northern Clean Air operations targeted around March, western Advanced Ride Technologies operations around July and western Clean Air operations around September. Management said each start-of-production date could vary by a couple of months with customer volumes.

When will Tenneco’s three new plants start production?

Tenneco expects its northern Clean Air plant to start production around March 2027, its western Advanced Ride Technologies, or ART, suspension plant around July 2027, and its western Clean Air plant around September 2027. Mahender Chhabra said all three facilities were expected to begin operations in calendar 2027, while Arvind Chandra described the monthly dates as approximate.

The commissioning sequence spreads the three openings across roughly six months in 2027. Management said the timing depends on customer volumes and could move by plus or minus a couple of months, making the March, July and September milestones targets rather than fixed commitments.

The northern site was Tenneco’s first announced Clean Air facility, followed by the western ART plant and then the additional western Clean Air project. The March and September plants expand exhaust-system production, while the July facility expands shock-absorber capacity under ART.

What capacity will Tenneco add through these plants?

Tenneco said the northern Clean Air facility will add both hot-end and cold-end capacity, with Chandra estimating about a 10% increase. Management said existing Clean Air installed capacity is close to 2 million systems, although the level varies with the mix of passenger-vehicle and commercial-vehicle products.

The western Clean Air plant is more focused on hot-end systems and may increase capacity by about 12% to 14%, according to Chandra. He said the project involves Rs 45 crore of investment and should add about 0.3 million hot-end systems to the roughly 2 million-system base, supporting additional volumes in western India.

The ART project is planned in two phases. Chandra said Tenneco would probably add 1 million shock absorbers by July and another 1 million in the following year, taking the addition to 2 million units against a 19 million-unit existing capacity base across plants. Because the first phase begins around mid-year, management said its first-year contribution will not represent a full annualised capacity benefit.

Which markets will the facilities serve?

Tenneco said the northern Clean Air facility is intended to supply Maruti, Mahindra and other customers in northern India. It identified Mahindra and Tata as the centre of gravity for its western Clean Air expansion, while the ART suspension plant will also be located in western India.

Management said the facilities are primarily intended for Indian original equipment manufacturers, or OEMs, although a portion of output may be exported. It linked the locations near OEMs to logistics requirements and cited the order book as the reason for the three additions, without disclosing project-level customer volumes.

Tenneco did not provide its customer count as of September 30 or at the end of FY 2026. Chandra said the company had disclosed customer information in its red herring prospectus, or RHP, but had not updated it, while also referring to customer additions among Indian, Chinese, Korean and Japanese OEM groups.

Why is Tenneco adding more hot-end Clean Air capacity?

Tenneco is adding more hot-end capacity because management said hot-end Clean Air products are more profitable than cold-end products. Chandra said hot-end systems include components such as three-way catalysts, oxidation catalysts, particulate filters, selective catalytic reduction equipment and mixers, whereas cold-end work is principally piping and a muffling device.

The hot-end emphasis is particularly relevant to the western Clean Air plant, which management said is being added as existing hot-end operations run at 99% utilisation. Chandra said Tenneco would not be bottlenecked because the Rs 45 crore western project is intended to provide capacity for the additional volume.

Management attributed the manufacturing model to standardised and modular production. It said one canning line can produce a Kirloskar generator exhaust system, an Ashok Leyland heavy-duty exhaust system and a Mahindra diesel-engine exhaust system, allowing multiple applications to run on the same line.

How does Tenneco describe the investment model for the new plants?

Tenneco said Clean Air investments can generate revenue equal to 3 to 4 times gross block, meaning the gross value of fixed assets before depreciation. Chhabra said turnover may begin near 3 times and move toward 4 times as plant utilisation approaches optimum capacity, but management did not give a project-specific payback period for the three facilities.

Management cited return on capital employed, or ROCE, of 94% as of March 31 of the previous financial year and fixed-asset turnover of above 8:1 or 9:1. Chandra said the model benefits from depreciated assets, equipment acquired at fair market value from sister divisions in Europe and the United States, and modular lines that can make multiple products.

The western ART plant also supports a production-footprint change for DaVinci suspension technology. Management said some legacy shock-absorber lines from Hosur and Bangalore will move westward, creating space at Hosur for DaVinci capacity, including localisation and automation of a piston line.

Conclusion

Tenneco has set a sequential 2027 plan for a northern Clean Air plant, a western ART suspension plant and a second western Clean Air plant. The projects address distinct needs: approximately 10% additional northern Clean Air capacity, a hot-end-focused western Clean Air addition of about 12% to 14%, and 2 million additional ART shock absorbers against a 19 million-unit base.

The next milestones are the March, July and September 2027 start dates, subject to management’s stated couple-of-month flexibility on customer volumes. Investors can also watch the first 1 million-unit ART addition targeted by July, the following 1 million units in the next year, and progress in creating DaVinci production space at Hosur.