Introduced by the Ministry of Road Transport and Highways (MoRTH), Government of India, in 2017 on a pilot basis by the Mumbai Traffic police in October 2016, the e-challan system has since been put into practive all over the country. Aimed at digitising the process of traffic violation enforcement by eliminating manual loopholes, the system is proving to be annoying for transporters however.

It is not the technology, but the ones who deploy the system, claims transporters. Stating that the e-challan system has over time become a source of significant distress for transporters even though its introduction was appreciated by the industry as it digitised the process of traffic violation enforcement and eliminated many manual loopholes, Bal Malkit Singh, Chairman - Core Committe and Former President, All India Motor Transport Congress (AIMTC), averred, "The system has over time become a source of significant distress for transporters and other road users. It has become a new ‘Frankenstein’ and death knell for the road transport sector.” 

Stating that a strong resentment is brewing and the transport fraternity across the country is agitating, Singh said, “The intention behind e-challans is to improve transparency and reduce manual intervention, but several issues have risen to complicate the situation for transporters.” “The primary issue stems from the large volume of incorrect or excessive e-challans issued to them. Many trucks plying long distances are receiving multiple e-challans for the same alleged offense or due to erroneous readings from speed detection or overloading devices,” he added. 

Giving an example of trucks travelling through multiple states often receiving fines for supposed infractions such as over-speeding or minor overloading even though they are within legal limits, Singh explained, “Such errors accumulate and led to a financial strain for transporters. This is exacerbated as transporters operate nationwide – covering diverse terrains and jurisdictions – that would mean that they may be penalised in various states.” “These fines often lack clarity or the chance for immediate redressal, leading to confusion and increased operational costs,” he elaborated.

Informing that enforcement officials have found a way around technology to generate motivated challans without any verifiable proof of offence, which is leading to acute harassment of the transport fraternity, Singh articulated, “There is neither authentication of any violation through static photo nor there is any transparency leading to acute harassment of the transport fraternity. Static photo of a parked vehicle is clicked and challans are issued for random offences. The vehicle owner may be from a geographically distant state and cannot contest the challan in court. Lack of communication regarding issuance of e-challan to the vehicle owner/operators who is sitting in one part of the country and must travel across the length and breadth of it to get it disposed/rectified.”

With instance where the vehicle owner comes to know of the challans issued only after he tries to dispose of his vehicle, goes to renew its fitness and to renew the permit (in the case of commercial vehicles), the issues with e-challans is pan-India in nature than be limited to a certain geographically or cultural area it looks like. 

Transport associations like the All India Motor Transport Congress (AIMTC) have voiced concerns and are actively engaging with state and central authorities to address the growing problem. They have raised issues related to inaccurate e-challans due to technical errors or faulty detection equipment, lack of a unified system across states leading to inconsistency in how fines are issued and difficulty in contesting these fines as there is no streamlined process for redressal or appealing incorrect challans.

They are demanding a centralised and transparent grievance redressal system, standardisation of e-challan policies, equipment calibration across states and leniency or waiver of penalties that are clearly issued due to system malfunctions, according to Singh. 

Of the opinion that traffic enforcement is a state subject, Singh expressed that the intensity and frequency of issues differ state-to-state therefore and in some states use of faulty equipment or overly strict enforcement practices that has led to a higher number of incorrect challans. Singh drew attention to issues like non-integration with national vehicle databases (such as Vahan 4) in some states. “The system in Telangana for example,” Singh articulated, “has been of specific concern for transporters because it is not fully integrated with the national system, leading to problems like wrongful issuance of challans for vehicles from other states.” 

"The potential solutions to addressing the issue of e-challan," Singh commented, “Is to ensure scientifically verifiable evidence. A centralised grievance redressal system with a nodal officer should be put in place. The exact recording of the offence with exact measurement in case of over-height or overload or similar such case should be presented rather than a picture to avoid any doubt about motivated action. Equipment and procedures should be standardised. Vehicle databases should be integrated. Enforcement officials should ne trained to be humane. The accountability of the enforcement officials should be ascertained whenever the issue of motivated challans is there." 

Image for representative purpose only. 

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It was on 30 July 2025, Tata Motors announced it had reached an agreement with European automaker Iveco Group to acquire its commercial vehicle, powertrain and finance business for EUR 3.8 billion. The transaction to be financed through a mix of equity and debt will complement Tata Motors’ frugal engineering and robust product portfolio with Iveco Group’s global product portfolio, technology and ecosystem.

Tata Motors expects to raise around EUR 1 billion through equity, along with monetising its stake in Tata Capital to help repay the EUR 3.8 billion bridge loan to acquire Iveco Group.

The new company will be able to drive better operating leverage by spreading its capital investments over larger volumes, generating important efficiencies and reducing the cash flow volatility inherent in the commercial vehicles sector. It will also enable the capabilities of Iveco Group’s successful powertrain business, FPT, to be further enhanced.

Explaining the rationale behind the move, P B Balaji, Group CFO, Tata Motors, stated that the commercial vehicle business is different from the passenger vehicle business.

“CV segment sees steady business; the disruption levels are slow and gradual. They are not very intense, and it takes a lot of time to build the brand presence, establish a financing arm, market products; therefore only way to grow substantially through inorganic means becomes part of the milestone,” he said.

Tata Motors has been working on splitting its passenger vehicle business and commercial vehicle business, with the CV business expected to be listed as an individual entity in October 2025.

Together with this move, the new combined entity, Balaji stated, will create the “world’s fourth largest CV maker and in touching distance of the number 2 and 3 in the above 6-tonne category.”

He revealed that the discussions with Iveco had been ongoing for the last six months, since the latter decided to spin it off its defence business.

“Tata Motors had never been financially strong enough to take such a move, with Iveco deciding to spin-off its defence business, one has to move very fast to diversify the portfolio and grow CV business,” he said.

The acquisition involves Iveco’s four business operations – Trucks, Buses, FPT Industrial (engine) and Iveco Capital (financing).

Together, the partners will not only complement product portfolios and capabilities but eventually benefit from substantially no overlap in their industrial and geographic footprints, creating a stronger, more diversified entity with a significant global presence and sales of over 540,000 units per year. Together, Iveco and the commercial vehicle business of Tata Motors will have combined revenues of EUR 22 billion split across Europe (50 percent), India (35 percent) and the Americas (15 percent) with attractive positions in emerging markets in Asia and Africa.

Unlimited Pathways 2.0

In what is described as the next frontier of growth for the combined entity, Balaji revealed that they will co-develop a joint roadmap christened ‘Unlimited Pathways 2.0’, which aims to define new technology-led synergy initiatives once the transaction closes in April 2026.

This is said to ‘lift the ambition for both companies to a very different level’, along with clearly defining cross-border synergies.

As per Balaji, the return on capital employed (ROCE) for the combined entity will stabilise at 20 percent, with room to grow earnings significantly. At present, for Tata Motors, the ROCE is around 40 percent, while for Iveco it is 14 percent.

“Together we believe we can actually generate substantial value, we can triple our revenue and quadruple some of our profitability numbers amongst the two of us to ensure that it still generates a 20 percent kind of a ROCE,” said Balaji.

Tata Motors, on its path, will benefit from access to Iveco’s advanced investments in the areas of technology, alternative energy, which the Indian CV market has not yet seen in a big way.

“The brand is complementary, therefore customer groups/cohorts which we were not addressed with Tata Motors brand, can now essentially be addressed with Iveco, that is the premium end of the market. Secondly, the frugal engineering capabilities we have in India, will certainly be of help for Iveco to optimise and bring design to value thinking. Thirdly, Iveco has been invested ahead of time, as in what India has been doing on various technologies, be it powertrain, software-defined vehicles (SDVs) and ADAS, among others. These are some of the technologies that we can adopt for the Indian market ahead of time, and at the same time bring in frugal engineering that will help Iveco in turn,” explained Girish Wagh, Executive Director, Tata Motors.

He further stated that the idea is to work together and complement each other wherever possible. “As we go ahead, we will put mechanisms and thoughts in place, and how we can synergies and govern the entities as ‘one Tata Motors commercial vehicle’.”

Adding to that, Balaji stated, “We also want to be sure that there will be specific areas for sure, where we would like to keep it as different as each other, as part of our learning from the Jaguar Land Rover experience. Iveco brand, the channel, we would want it to be absolutely independent, where there are two different markets it serves. But there are areas where they may overlap. And as we understand each other, the overlap will increase, but it is first important to understand each other, get the cultural sensitivities taped up between the two companies, and build the trust. At the end of the day, it is the excitement of winning together that is the first focus, and we will do it in a measured manner together with Iveco team. Engaging with them for the last six months, the mutual chemistry is excellent in ensuring that we co-create the agenda together. So that we can start lifting the ambition for both companies to a very different level.”

Sharing his expectations from unlocking the combined synergies, Balaji stated “A lot of people are seeing this as 2 + 2 together, if that is just going to be 4, we have a problem. I would want to see how this can translate to a 6 or a 8 or 20 if we can pull it off,” emphasising his significant expectations from the behemoth.

Existing partnerships to continue

Tata Motors and Iveco have established their brand over the years, the network, the supply chain and partnerships. Despite the announcement, there are still a lot many areas where decisions have yet to be made.

In India, Iveco, through FPT Industrial, is supplying LNG engines to Pune-based Blue Energy Motors, in which the company also has acquired a minority stake. Responding to a query on whether Tata Motors is looking to use Iveco’s LNG powertrains for its products, Balaji said that there were a lot of areas where they are still trying to figure out the future course of action.

Adding to that Wagh said, “There are possibilities for powertrain synergies with Iveco, but we have a very strong and long-lasting partnership with Cummins in India for powertrains for more than 33 years. We use their engines, especially in medium and heavy commercial vehicles and will continue to do so. In addition, we also formed a step-down JV to accelerate our efforts towards zero zero-emission solution – hydrogen ICE, hydrogen fuel cell or battery electric. We will continue to work on that. There are also products in our portfolio, where FPT Industrial has powertrains in both ICE diesel and gaseous fuels. We will certainly explore the synergies, which will improve the competitiveness of our products in these markets.  

Tata Motors also confirmed that as part of the deal, it will get access and nurture all the IPs, capabilities, and design from Iveco, including cabin partnership and fuel-cell with Hyundai.

Going forward, the partnership is expected to see Tata Motors introducing Iveco products in India and other markets where it has a strong geographical presence, while it will utilise Iveco’s ecosystem to introduce Tata Motors’ range of CVs.

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In what comes as a major announcement in the commercial vehicle industry, Tata Motors, one of India’s leading CV player, is set to acquire Europe’s Iveco Group’s CV business for EUR 3.8 billion. The transaction, if approved, is expected to close in the first half of 2026.

The deal once through will create a ‘force majeure’ in the global CV industry, combining Tata Motors’ frugal engineering strength with Iveco Group’s strength in electrification and the alternative energy domain.

The offer, made by Tata Motors CV Holdings (a Tata Motors affiliate), aims to acquire 100 percent of Iveco’s common shares post the separation of Iveco’s defence business. The tender offer price is set at EUR 14.1 per share, with an additional estimated EUR 5.5–6.0 per share dividend to be distributed from the proceeds of the defence business sale.

Exor N.V., Iveco's largest shareholder, has agreed to tender its 27.06 percent stake and support the proposed resolutions at Iveco’s upcoming extraordinary general meeting (EGM). The deal has the unanimous backing of Iveco's board, which has recommended the offer to its shareholders.

The combined group will operate across key markets including Europe (50 percent), India (35 percent) and the Americas (15 percent), with annual sales of approximately 540,000 units and combined revenue of around EUR 22 billion. Tata Motors and Iveco expect the partnership to enhance their ability to invest in zero-emission transport, optimise global supply chains and expand product innovation.

Subject to regulatory approvals and shareholder support, the parties plan to finalise the separation of Iveco’s defence business by March 2026. Should this not occur through a sale, the business will be spun off into a newly listed entity by April 2026 to allow the main offer to proceed.

As part of the understanding, Tata Motors has also committed to a two-year non-financial covenant period post-settlement, including no direct workforce reductions or plant closures and preserving Iveco’s identity, brands and headquarters in Turin, Italy.

Both companies emphasised that the move will establish a globally competitive platform equipped to address shifting mobility trends and create long-term value for stakeholders.

The combined group will be better positioned to invest in and deliver innovative, sustainable mobility solutions by leveraging both supplier networks to serve customers globally. It will also unlock superior growth opportunities and create significant value for all stakeholders in a dynamic marketplace. By preserving each group’s industrial footprint and employee communities, this complementarity is also expected to foster a smooth and successful integration process. It will also enable the capabilities of Iveco Group’s successful powertrain business, FPT, to be further enhanced.

Natarajan Chandrasekaran, Chairman, Tata Motors, said, “This is a logical next step following the demerger of the Tata Motors Commercial Vehicle business and will allow the combined group to compete on a truly global basis with two strategic home markets in India and Europe. The combined group's complementary businesses and greater reach will enhance our ability to invest boldly. I look forward to securing the necessary approvals and concluding the transaction in the coming months.”

Suzanne Heywood, Chair, Iveco Group, said, "We are proud to announce this strategically significant combination, which brings together two businesses with a shared vision for sustainable mobility. Moreover, the reinforced prospects of the new combination are strongly positive in terms of the security of employment and industrial footprint of Iveco Group as a whole.”

Girish Wagh, Executive Director, Tata Motors, said, "This combination is a strategic leap forward in our ambition to build a future-ready commercial vehicle ecosystem. By integrating the strengths of both organisations we are unlocking new avenues for operational excellence, product innovation and customer-centric solutions. This partnership not only enhances our ability to serve diverse mobility needs across markets, but also reinforces our commitment to delivering sustainable transport solutions that are aligned with global megatrends. Together, we are shaping a resilient and agile enterprise, equipped to lead in times of transformative change."

Olof Persson, CEO, Iveco Group, said, “By joining forces with Tata Motors, we are unlocking new potential to further enhance our industrial capabilities, accelerate innovation in zero-emission transport, and expand our reach in key global markets. This combination will allow us to better serve our customers with a broader, more advanced product portfolio and deliver long-term value to all stakeholders.”

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Mumbai-based automotive major Mahindra & Mahindra has no plans to develop electric bus under its own brand, in fact, it is betting on SML Isuzu’s development to roll out its first e-bus offering.

It was in April 2025, Mahindra officially announced its plans to acquire majority stake in commercial vehicle major SML Isuzu, which would play a key role in strengthening its footprint in the CV industry.

At present, Mahindra holds a modest 3 percent market share in this space, compared to its dominant 52 percent share in the <3.5-tonne light commercial vehicle (LCV) market. With the addition of SML’s capabilities and brand strength, Mahindra expects to immediately double its market share to 6 percent, and is aiming for 10–12 percent by FY2031 and over 20 percent by FY2036.

In a recent investor call, Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra, revealed that “SML Isuzu has developed its electric bus, whatever we do will be through that entity. There is no plan to do any e-bus in the Mahindra portfolio.”

In theory, this would enable Mahindra to continue to focus on its ICE-portfolio, while the integration of SML Isuzu will enable it to leverage the development of an alternative energy portfolio, such as CNG and electric powertrains in the CV segment.

What would be interesting to note is that with SML Isuzu's electric bus platform, will Mahindra also look at cross-badging as an option? Only time can tell. 

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Tata Motors, one of the largest commercial vehicle manufacturers in India, is set to further strengthen its business with the acquisition of Italian CV major Iveco for USD 4.5 billion, said an Economic Times report.

The move is one of the largest acquisitions for Tata Motors’, and is said to be the second largest acquisition for the Tata Group after Corus.

While there has been no formal announcement from either party on such a negotiation between them, a formal update from Iveco stated that ‘it is engaged in ongoing, advanced discussions with different parties for potential transactions involving its defence business, on the one hand, and the balance of the company (CV business) on the other.’

For the unversed, Iveco operates several businesses: it produces commercial vehicles for road and off-road use, including models with natural gas and ecological diesel engines. Iveco Bus focuses on passenger transport, offering urban and intercity buses, tourism coaches and minibuses, with an emphasis on sustainable mobility solutions like natural gas and electric vehicles. Heuliez specialises in electric city buses, with a history of developing electric mobility products. FPT Industrial manufactures industrial powertrains and alternative propulsion systems for various vehicle types and power generation, also developing electric propulsion and energy storage solutions.

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