Allison Transmission announced a memorandum of understanding with Armoured Vehicles Nigam Limited (AVNL), a government‑owned defense manufacturer, to establish a maintenance, repair and overhaul (MRO) center in India. The facility will support Allison’s cross‑drive transmission programs, including the 3040 MX used in India’s Future Infantry Combat Vehicle (FICV) program, and will provide long‑term service support for current and future Allison transmissions in the region.
The partnership aligns with India’s “Make in India” initiative and positions Allison to capture a share of the country’s growing armored vehicle fleet. AVNL is expected to procure several hundred advanced armored vehicles over the next two decades, creating a recurring revenue stream from service contracts and parts sales for Allison.
The announcement comes after Allison reported Q3 2025 earnings that fell short of expectations. Net sales declined 16% to $693 million, and earnings per share were $1.63 versus the consensus estimate of $1.95. The miss was driven by a 28% decline in North America On‑Highway sales, reflecting macroeconomic softness, while the defense segment grew 47% year‑over‑year.
In response, management lowered its full‑year 2025 guidance. Net sales are now projected at $2,975 million to $3,025 million, down from the previous $3,075 million to $3,175 million. Net income guidance was cut to $620 million to $650 million from $640 million to $680 million, and adjusted EBITDA guidance was reduced to $1,090 million to $1,125 million from $1,130 million to $1,180 million. The revisions reflect $60 million of expenses related to the pending acquisition of Dana’s off‑highway business.
Despite the earnings miss, the MOU is viewed as a long‑term growth driver. Allison’s CEO, David S. Graziosi, said the company is “focused on operational excellence and expanding its defense footprint in high‑growth markets.” The MRO center is expected to generate recurring revenue that will help offset near‑term revenue pressure and support the company’s broader strategy to diversify beyond North American commercial vehicles.
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