US-based automatic transmission maker Allison Transmission Holdings is looking at India as a major market for its future growth. The company plans to cash in on the growth prospects that the Indian market offers while using India as a base to export components and transmissions to countries in East Asia and Europe.

“India is a very important market for us. It has huge potential for automatic transmissions,” said Kartik Ramanan, Allison Transmission’s Executive Director for Global Off-Highway, Customer Support and Service Engineering, adding that the country has the potential to be in the top five markets for the world’s largest maker of medium- and heavy-duty fully automatic transmissions.

“This is because the market here is getting sophisticated over the years. There is a need for automation, a need for solutions that are safe and provide value in terms of the total life of the vehicle. There is greater recognition of the total cost of ownership that the equipment or vehicle needs to deliver,” he added.

Allison Transmission’s solutions are used for a variety of applications, such as highway trucks, buses, motorhomes, off-highway vehicles and equipment (energy, mining and construction applications) and defense vehicles. In India, the company offers transmissions for buses and mining trucks, as well as for equipment used for pressure pumping and hydraulic fracturing in the oil and gas segment.

The company believes India has a huge addressable market and potential for automatic transmission, which is yet to be realised, in the context of electrification. Allison Transmission has a manufacturing facility in Chennai that was initially fabricating parts such as gears and shaft spindles, for highway vehicles. The facility was later expanded to assemble transmissions using components from outside.

Allison Transmission is investing $100 million (Rs 833 crore) in its Chennai facility to nearly double the fabrication capacity for components of its 3000 Series and 4000 Series onhighway products. Operations at the expanded capacity are expected to start in 2026 and ramp up to full capacity in 2027. The Chennai facility assembles transmissions only for on-highway vehicles, while producing key components for off-highway vehicles and equipment.

A vast majority of Allison Transmission’s India business comes from the export of 1000 Series and 2000 Series transmissions to countries like Japan, South Korea and various European nations. “India has tremendous potential for automatic transmissions in the off-highway space. But it is more in a growth phase. Right now, the volumes are not very large,” Ramanan said when asked about assembling the transmissions for the off-highway segment.

“The key competency of the Chennai facility lies in component fabrication, and that is where the focus is now. But in the next few years or a decade, we will see changes coming in the off-highways transmission side,” he added.

Recently, the company partnered with one of India’s major commercial vehicle makers, Ashok Leyland, to equip low-floor city buses with fully automatic transmissions. In 2022, the company acquired CK Birla Group-owned AVTEC Ltd’s off-highway transmission portfolio and component machining business for $23 million. Going forward, Allison Transmission will consider both organic and inorganic growth opportunities for its expansion in India.