With Iveco in its kitty, Tata Motors set to expand global truck footprint

Time of India

2 days ago

New Delhi: It was a little over two decades ago, 2004 to be precise, when Tata Motors acquired Daewoo Commercial Vehicle Company. This was seen as a big step forward in its endevaour to become a global truck and bus maker.
The company has now gone one step further with the recent acquisition of Italy's Iveco Group for €3.8 billion (approx ₹38,240 crore). The deal includes Iveco's truck, bus, and powertrain operations, as well as its financial services arm.
'The Daewoo acquisition helped us understand how to compete with global CV giants, as Daewoo operates in a market alongside players like Daimler, Volvo, and Traton,' Girish Wagh, Executive Director, Tata Motors Ltd, told ETAuto during a media briefing on Thursday.
He added that the Korean venture also served as a proving ground for cross-border synergies. 'For instance, all of Daewoo's medium and heavy-duty trucks use a cabin developed in India and jointly adapted for the Korean market. Even our entry into the light-duty segment there was built on Indian-developed aggregates.'
'With that experience, we've built strong capabilities in cross-cultural integration and collaborative product development, and we intend to scale significantly as we begin our journey with Iveco,' Wagh said.
Hinting at the significant potential the current deal could unlock for Tata Motors, Group CFO PB Balaji remarked, 'I know many are seeing this as simply putting two and two together, but if two and two only make four, we have a problem.' What excites him more, he added, is the prospect of two and two becoming six, eight, or even twenty-two, if the companies can truly unlock the synergy and scale.
Strategic focus
The Mumbai-based automaker plans to operate its commercial vehicle business as a unified entity. Iveco's portfolio will be introduced in India, while Tata's products will gain wider access to global markets, supported by integrated sales, service, and distribution networks. The company will also explore platform sharing and convergence in future product development to optimise R&D investments.
'However, drawing from its JLR experience, Tata Motors intends to retain Iveco's brand identity, customer interface, and distribution channels as independent to preserve market-specific strengths,' he said.
With this deal, Tata is looking to tap into 'premium customer segments and cohorts' that the company currently does not address. Balaji noted that Iveco's investments in advanced technologies like powertrains, SDVs, and ADAS are ahead of the curve.
Its alliances with Ford Otosan for cabin development and Hyundai Motor Company for fuel cells will offer Tata Motors strong tech leverage amid the industry's ongoing transition.
Labour integration
As part of the acquisition terms, Tata Motors has agreed to a set of non-financial covenants that will remain in force for two years post-deal closure.
'There is no overlap in the industrial footprint, so the strategic rationale itself ensures job security,' Balaji said.
'Iveco will continue to take decisions required to remain competitive under its own 'Unlimited Pathways' framework. The transaction neither accelerates nor impairs that direction. We remain neutral from that standpoint,' he added.
In a joint statement, Italy's Chigi Palace and the Council of Ministers welcomed the Tata Motors-Iveco deal, calling it 'a major industrial transaction' that opens new growth avenues for Iveco Group and its workforce.
Iveco's legacy
Iveco was spun off from the Fiat Group in 2009 as part of Fiat Industrial, later becoming part of CNH Global, and finally emerging as a separately listed entity in 2022.
Its key manufacturing hubs are located in Italy, Spain, and Brazil. The company operates across four main business segments, with its truck division being the largest contributor, generating around €10 billion in revenue in CY2024, with an EBIT margin of 5.6 per cent.
Iveco holds approximately 11 per cent market share across the European Union and Latin American markets. In the bus segment, the company reported revenues of €2.6 billion last year with an EBIT margin of 5.5 per cent, making it the second-largest bus manufacturer in Europe. It operates across city, intercity, and minibus segments, with production facilities in the Czech Republic and France.
The powertrain division, FPT Industrial, posted €3.5 billion in revenue in CY2024 with a 6.2 per cent EBIT margin. FPT is currently the fifth-largest engine manufacturer globally, with most of its production centered in Italy.
In powertrains, the Italian company aims to be the 'last man standing' in internal combustion engines (ICEs), while also making significant recent investments in electric drivetrains. Excluding defence, Iveco reported revenues of €14 billion.