HANNOVER, Germany – Discussions about emissions standards are often anchored around the rules that govern trucks in North America and Europe, but John Wehrenberg knows the business opportunities don’t end there.
The Tenneco executive points to India’s plans for the tighter restrictions of Bharat Stage 6. China, meanwhile, is preparing to reduce allowable hydrocarbons, NOx and particulate matter under a framework known as China 6.
“The number of engines in the world under regulation doubles in the next few years ,” says the manufacturer’s global vice-president and general manager of commercial truck and off-highway – clean air.
And even if U.S. regulators ease emissions-related targets south of the border, there are still opportunities presented by those who want to improve fuel efficiency in the name of controlling a truck’s total cost of ownership, he adds. “I haven’t been in any direct conversations with a customer where they said it wasn’t important.”
It’s all good news for a global supplier of clean air products.
“The fastest growth rates for us will be in Asia as we approach the new regulations over the next couple of years,” Wehrenberg said during the IAA truck show in Hannover, Germany. “Those [regulations] all come into force in 2020, and so a huge activity in Tenneco right now is to get ready for all that.”
Even at a show where many manufacturers were talking about the future of electrification – the type of vehicles that don’t have exhaust systems of any sort – he focused on the business opportunities around hybrid powertrains. Those become particularly viable as OEMs decide where to allocate resources, and where it makes sense to allocate work to third parties.
“It gives us the chance to look at using a Tenneco system architecture for an aftertreatment system. In the past, not all the OEMs were open to that,” Wehrenberg says. “Some of that pressure is helping the OEMs to open up their mindset a little bit to give us some more responsibility.”
Tenneco’s business is not limited to clean air, of course. The company acquired Federal-Mogul in April, in a blockbuster $5.4-billion deal to close Oct. 1.
Detailed meetings about how that ride control, chassis and aftermarket business will work have been limited because of regulatory requirements, he says. But we know that the yet-to-be-named entity will run independently and be led by CEO Roger Wood, who had previously retired from a role as president and CEO at Dana.
“There is more to come,” Wehrenberg says.
In the meantime, a robust market for trucks, off-highway equipment, and light vehicles is presenting its own challenges. Enviable challenges, but challenges nonetheless.
“Supply-based constraints are a real issue,” he says. “When the OEM can’t get a part from you, he calls me and he wants a different aftertreatment system. So it is still a very challenging environment to manage.”
Tariffs triggered by the Trump Administration, meanwhile, have had a “limited, moderate” impact to date, he adds. But over the long term they could affect business plans for North America. At some point that might mean approaching Canada, Mexico, and the U.S. individually.
“In our space we were excited to get one OEM program that’s on three different continents. And we thought, here’s a great chance. We can use the lessons learned from Continent 1. We can use the sourcing volume across three continents,” he says. When continents are treated as islands, however, validate expenses rise. The opportunities to leverage some of the global strengths are diminished.
It’s something he calls a “sub-optimal” choice. Time will tell if such choices need to be made.
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