DETROIT (Jan. 21, 2016) — Tenneco Inc. expects that in 2016 it will outgrow global industry production by 2 percentage points, resulting in revenue growth of 5 percent at current industry growth forecasts and excluding the impact of currency.
Tenneco Chairman and CEO Gregg Sherrill provided these revenue growth estimates at the recent Deutsche Bank Global Auto Industry Conference in Detroit.
The Lake Forest, Ill.-based automotive supplier said it expects 2016 revenue growth will be driven by:
- Incremental clean air revenue from 2015 light vehicle launches and new launches in 2016;
- Incremental revenue from Monroe Intelligent Suspension programs — with four new launches in 2016 and the continued ramp-up on programs the firm launched in 2015; and
- Commercial truck and off-highway emissions regulations, with additional content on off-highway Tier 4f and Stage 4 programs in North America and Europe, incremental revenue from 2015 launches of a North America medium-duty commercial truck and an off-highway program in Japan, increasing market share with commercial truck customers in China, and initial launches with commercial truck customers in India to comply with BS IV regulations.
In calculating its estimates, Tenneco cited IHS Automotive Inc.'s December 2015 light vehicle production forecast in the regions where Tenneco operates, Power Systems Research (PSR), January 2016 forecast global commercial truck and buses, PSR off-highway engine production in North America and Europe, and Tenneco estimates.
The company's revenue growth estimate for 2016 assumes an overall 3 percent production increase in industries Tenneco serves globally, based on the company's following assumptions:
- Further weakening in off-highway industry volumes;
- Continued weak commercial truck production in China and Brazil; and
- China commercial truck aftertreatment installation rates similar to 2015.
In 2017 and 2018, Tenneco said it expects revenue growth to accelerate and outpace industry production by 3 to 5 percentage points each year as new light vehicle emissions regulations begin to phase-in in North America and Europe. These estimates also exclude the impact of currency.
The firm plans to report its fourth quarter and full-year 2015 results on Feb. 9.
Tenneco designs, manufactures and markets clean air and ride performance products and systems for automotive and commercial vehicle original equipment markets and the aftermarket under the principal brand names Monroe, Walker, XNOx and CleviteElastomer.