Tenneco Inc. (TEN) has formed a joint venture (JV) with a Chinese company, Changchun FAW Sihuan Group Ltd. — a subsidiary of FAW Group Corp. The JV aims at manufacturing and supplying emission control components and systems for passenger and commercial vehicles in China.
Tenneco will have a 41% equity share in the JV while FAW Sihuan will have 49%. On the other hand, Tenneco Tongtai (Dalian) Exhaust System Co., in which Tenneco has an 80% stake, will have a 10% stake in the venture.
With this, Tenneco will acquire the controlling interest in the venture. The JV, based in the Changchun city of China, will have FAW-Volkswagen and FAW Jiefeng as its initial customers.
FAW-Volkswagen Automobile Co. Ltd., formed in 1991, is a major passenger sedan joint-venture of FAW Group Corporation and Volkswagen AG, Audi AG and Volkswagen Automobile (China) Investment Co. Ltd. FAW Jiefeng is a wholly owned subsidiary of FAW Group Corp.
Tenneco aims to broaden its product portfolio, gain new business and attain a dominant position in the emerging markets through various acquisitions and alliances. In China, Tenneco has increased its footprint over the years by entering several joint ventures with partners including Germany-based Eberspächer International and China-based companies such as Chengdu Lingchuan Mechanical Plant, Shanghai Tractor and Engine Co. (a subsidiary of Shanghai Automotive Industry Corp), Beijing Automotive Industry Company and Beijing Hainachuan Automotive Parts Company Limited.
Tenneco also has strategic alliances with exhaust manufacturer, Futaba, and ride control manufacturer Hitachi (HIT, as a successor to Tokico Ltd. following the acquisition of Tokico) in Japan.
Further, Tenneco has established a presence in Thailand through a joint venture with Thai exhaust system manufacturer Yarnapund Co., which supplies exhaust components for General Motors and Japanese carmaker Isuzu. The company also acquired the suspension business of Gruppo Marzocchi, a supplier of suspension technology in the two-wheeler market based in Italy.
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