Allison Transmission Inc., a U.S.-based manufacturer of automatic transmissions for trucks, buses, off-road vehicles, and military vehicles, has formalised an agreement with the Tamil Nadu government to facilitate its manufacturing expansion in Chennai.

“Allison Transmission has signed an MoU with Guidance Tamil Nadu to expand its advanced manufacturing facility in Chennai. This expansion represents a major reinvestment of $92 million (approximately ₹763 crore) starting in 2025. The expanded facility will create 167 direct and indirect jobs, effectively doubling its current size,” tweeted TRB Rajaa, Tamil Nadu’s Minister for Industries, Investment Promotion, and Commerce.

Earlier, on October 24, 2024, Allison Transmission announced the expansion to meet the growing global demand for its fully automatic transmissions. This multi-year, $100-million-plus investment will double the footprint of the Chennai facility, significantly increasing production capacity for Allison’s on-highway transmission portfolio and bolstering global operational flexibility and capabilities,

“Our investment of more than $100 million will be distributed over the coming years, with nearly half of the total expected to be spent in 2025. As operations commence in 2026 and ramp-up to full production by 2027, this investment will drive our long-term growth in regions outside of North America, increasing our global capacity and delivering operational cost efficiencies,” David S Graziosi, Chair & CEO of Allison Transmission Holdings, Inc., said during the company’s latest earnings call.

Opened in 2010, Allison’s facility at Oragadam near Chennai serves as the regional headquarters, initially focused on producing parts for the 1000 Series and 2000 Series on-highway products. This facility expanded in 2012 to assemble these transmission models, sourcing components from the Indianapolis supply chain. He added that Allison plans to further enhance fabrication capabilities for its 3000 Series and 4000 Series transmissions in Chennai, allowing production to be tailored to regional demand.

In addition, Allison Transmission has partnered with Ashok Leyland, one of India’s top commercial vehicle manufacturers, to launch the country’s first low-floor city buses equipped with fully automatic transmissions in the southern market. These 12-meter diesel buses, powered by Allison’s Torqmatic Series transmissions, are specifically designed for improved accessibility for passengers with disabilities.

Related Topics