USA - Allison Transmission Inc, gearbox and e-Axle manufacturer based in Indianapolis, Indiana, has announced its 2024 financial report, with record full-year sales of USD 3.2 billion (2023: USD 3 billion), which increased the Earnings Per Share (EPS) to a record USD 8.31, up 12 percent from 2023. 2024 net income was USD 731 million, compared with 2023 figures of USD 673 million.

Market Segments

In terms of specific market segments, the company recorded full-year net sales of USD 1.8 billion in the North American On-Highway market, with strong customer demand for Class 8 vocational and medium-duty trucks. The sale of service parts and support equipment delivered USD 663 million in 2024, compared to 2023 net sales of USD 696 million. Finally, outside of North America in the On-Highway market, Allison recorded net sales of USD 493 million (2023: USD 477 million).

Operational Highlights

2024 was full of milestones, which included the launch of its new 9-speed fully automatic transmission at the IAA Transportation event in Hanover, Germany. Designed for commercial vehicles operating in stop-and-go conditions, the 9-speed fully automatic transmission offers improved fuel economy, enhanced performance, and lower maintenance costs. This product is an evolution of Allison's 2000 Series 6-speed transmission, featuring a wider gear ratio with over 50% more gear coverage compared to earlier models. This results in better fuel efficiency and increased performance, particularly for applications requiring up to 1,200 newton-metres of engine torque.

In terms of projects, the company partnered with drivetrain manufacturer Cummins Inc,  to develop an advanced electric hybrid drivetrain, designed for transit buses. Set to be launched in 2027, the system integrates the Cummins B-Series engine with Allison's eGen Flex electric hybrid (parallel) propulsion technology, meeting the EPA's Phase 3 greenhouse gas emissions standards for heavy-duty vehicles will take effect beginning in model year 2027.

The venture capital arm (Allison Ventures) set up last year, invested an undisclosed sum in Agtonomy, a California-based company specialising in AI-driven software and services that enable industrial machinery and vehicles to operate autonomously. Allison is planning to leverage the development of autonomy and connectivity in its own business.

On the investment front, the company plans a USD 100 million upgrade to its Indian plant in Chennai, to boost automatic transmission output to meet global demand. Through its Indian subsidiary (Allison Transmission India Pvt Ltd), the multi-year investment aims to double the current manufacturing footprint. The 200,000-square-foot expansion is expected to be completed by the end of 2025 with plans to become operational in 2026, and to reach full manufacturing capacity by 2027. This expansion is expected to boost production capacity significantly for Allison's on-highway fully automatic transmissions, enhancing global operational flexibility and capability.

Finally, Allison announced that its partnerships with Chinese bus OEMs bore fruit in 2024. There has been an ever-increasing number of Chinese bus builders specifying its automatic transmissions for export, they include Yutong Bus Co Ltd, Anhui Ankai Automobile Co Ltd, Xiamen Golden Dragon Bus Co Ltd, Xiamen King Long United Automotive Industry Co Ltd and Zhongtong Bus Co Ltd. Allison stated that many of these Chinese-built buses are equipped with their Torqmatic series (T2100, T280R and T390R), a line of fully automatic transmissions with engine ratings ranging from 172 to 283 kilowatts, specifically designed for suburban buses and tour coaches.

Chairman Report

David S. Graziosi, Chairman and Chief Executive Officer of Allison Transmission said:

Closing out the year, unprecedented demand for Class 8 vocational vehicles persisted in the fourth quarter of 2024, leading to record full-year net sales of USD 1.8 billion in our North America On-Highway end market. Driven by the realisation of our growth initiatives, we achieved decade-high full-year net sales in our Defence end market and all-time high full-year net sales in our Outside North America On-Highway end market. In addition to notable top-line performance across multiple end markets, Allison's full-year earnings per share increased 12 percent from 2023 to a company-record diluted EPS of USD 8.31. In 2024, we returned cash to shareholders by increasing our quarterly dividend for the fifth consecutive year while repurchasing over USD 250 million of our common stock, representing over 3 percent of outstanding shares, and paying down USD 101 million of existing term loan debt. At the midpoint, we are guiding to another record revenue year for 2025 driven by price increases on certain products, increased demand for Tracked vehicle applications and robust North America vocational demand.

2025

The company announced that it expects 2025 net sales to be in the range of USD 3.2 billion to USD 3.1 billion, with net income between USD 735 million to USD 785 million. EBITDA is expected to be in-between USD 1.17 billion and USD 1.23 billion in 2024,  with net cash in the range of USD 800 million to USD 860 million. Capital expenditures are estimated to be in the range of USD 165 million to USD 175 million, with adjusted free cash flow between USD 635 million to USD 685 million.