New Delhi, Nov 3 Tata Motors and Italian commercial vehicle maker Iveco Group are looking at significant growth in volumes, revenues and margins over the next five years as the two companies join hands to create a global commercial vehicle powerhouse, Tata Sons Chairman N Chandrasekaran said on Tuesday.
In a joint statement, the companies said, “Complementary portfolios and geographic strengths create a truly global enterprise, with presence in over 130 countries across key developed and high-growth markets in Europe, India, South America, Asia, the Middle East and Africa, and combined revenues of 21 billion euros (about Rs 2,28,000 crore)”.
Addressing a joint global press conference at Iveco’s headquarters in Turin, Italy, Chandrasekaran said that together, Tata Motors Commercial Vehicles and Iveco, would leverage the complementary geographical presence, product portfolios and technological capabilities to drive growth.
Tata Motors has acquired over an 89 per cent stake in Iveco Group, making the Italian commercial vehicle manufacturer its indirect subsidiary. The acquisition process is continuing, with the two companies now embarking on the next phase of integration and joint strategic planning.
“The way to look at it is that the combined company, Tata Motors Commercial Vehicles and Iveco Group, will produce currently the vehicles of the order close to 6,00,000 units and the combined revenue is of the order of 24 billion US dollars and both companies are profitable and both companies are cash generating,” Chandrasekaran said on a PTI question.
He said combined, the two companies would have a strong presence in India, Europe and Latin America, besides growing their footprint in Asia and Africa, offering significant opportunities across markets and product segments.
“So, it is a combination that is going to be growth-oriented. And we have multiple jewels between the two companies. It just should not be seen as only trucks. There are trucks, there are buses, and there are special vehicles for different needs, whether it is mining, construction, or a variety of other needs.
“And also there is a digital business, there is an engine business, and there are multiple growth engines,” he said.
Chandrasekaran said the company expects volumes to increase over the next five years, accompanied by significant growth in revenues and an improvement in margins, while refraining from outlining a specific business plan at this stage.
The combined entity is already the world’s fourth-largest commercial vehicle manufacturer, with a workforce of over 70,000 employees, operations across more than 130 countries and a global network of around 9,300 sales and service outlets, he added.
Describing the coming together as the realisation of an ambition to build a global commercial vehicle company, Chandrasekaran said the partnership was not merely about consolidation, but about creating a growth-oriented future.
“This should not be seen as a consolidation effort. This is about the future. So, we have two iconic companies coming together to create a growth-oriented future,” he said.
Chandrasekaran said the commercial vehicle industry was poised for significant transformation driven by decarbonisation, new powertrains, connected vehicles, software-defined vehicles and artificial intelligence, and the two companies would pool their engineering, research and technology capabilities to develop future products.
Tata Motors Managing Director and CEO Girish Wagh said the combination would provide the group with a significantly wider global distribution and customer reach, with the complementary strengths of the two companies opening up new opportunities across markets.
“With more than 9,300 sales and service touchpoints. We are very well spread in our markets. And importantly, close to our customers. But the real power of this footprint lies in its complementarity,” Wagh said.
He said the companies would explore opportunities to leverage Iveco Group’s powertrain capabilities, particularly those of its subsidiary FPT Industrial (Fiat Powertrain Technologies, owned by Iveco) across a wider range of industrial applications in India and other markets where Tata Motors has a presence.
“We do believe that quite a few of FPT’s capabilities can be scaled up in terms of getting into more industrial applications and therefore grow FPT from where it is today,” Wagh said.
He said Tata Motors would continue its existing joint venture with Cummins for supplying engines to the heavy commercial vehicle segment in India, while exploring the application of FPT’s capabilities across the rest of its product portfolio.
Chandrasekaran said the two companies were also identifying Iveco products that could have relevance in the Indian market, with localisation to be undertaken to make them commercially viable.
“There are specific products of the Iveco group, which will have a lot of relevance in India. And we are already identifying those products. Obviously, those products will have to be localised in India. At least to start with in a semi-knockdown manufacturing,” he said.
Similarly, Tata Motors’ products and platforms could be evaluated for other markets under the Iveco Group.
Wagh also identified Latin America as a key market for the combined entity, saying the companies would leverage their complementary product portfolios to expand their presence there.
“So, keep a watch for some new products coming into Latin America,” he said.
Iveco Group CEO Olof Persson said the control of Iveco officially changed on October 30, following the conclusion of Tata Motors’ tender offer on October 26.
He said the immediate priority would remain serving customers and ensuring continuity of operations even as the two companies begin exploring collaboration opportunities. Tata Motors is also working towards the delisting of Iveco Group, Wagh said.
“We are actively working towards de-listing (of Iveco from Italy’s stock exchanges). Don’t want to give any timeline here, but it will happen soon,” he said.
Chandrasekaran also recalled Tata Motors’ longstanding association with Turin, saying the company’s indigenous passenger car development journey had its roots in the Italian city, where the design of its first indigenous car took shape at design house Idea in the late 1990s.
(PTI News)
