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 is seen as a global energy crisis on the back of the ongoing war between Iran and USA-Israel, is now also expected to have an impact on the Indian transport sector.

Bal Malkit Singh, Advisor & Former President – All India Motor Transport Congress (AIMTC), has called for proactive government measures to protect the economy and the road transport sector from the effects of escalating tensions in the Middle East. The warning follows a surge in crude oil prices to nearly USD 95 per barrel and the effective closure of the Strait of Hormuz as of late February 2026.

The road transport sector is experiencing a slowdown due to reduced industrial output. Industry observations indicate a decline of up to 50 percent in certain segments, with projections suggesting this could reach 70–80 percent if current disruptions persist.

Furthermore, it can also lead to rising prices for fuel, lubricants, tyres and AdBlue (urea). He has expressed concerns over driver migration due to fewer work opportunities and the closure or price increases at highway eateries.

The ‘energy war’ scenario is impacting the wider MSME ecosystem, leading to higher production costs and operational challenges for small businesses and trading establishments.

Singh has urged the government to implement policy support to maintain economic stability, emphasising that the transport sector serves as the lifeline for domestic trade.

Proposed interventions include:

• Deferment of Equated Monthly Instalments (EMIs).
• Introduction of soft loan schemes.
• Targeted tax relaxations for transporters and MSMEs.

Bal Malkit Singh, said, “The current geo-political developments are an early warning signal for our economy. The road transport sector, being the lifeline of trade and commerce, is already experiencing stress due to reduced movement and rising operational costs. If timely interventions are not considered, the situation could escalate significantly in the coming weeks. It is essential to support MSMEs and transporters through relief measures such as deferment of EMIs, soft loan schemes, and tax relaxations to ensure business continuity and economic stability.”

Image credit: Samuel Wolfl/Pexels

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Euro NCAP has announced that Allianz has joined the Safer Trucks programme as an Associate Member, which combines vehicle safety assessment with commercial risk data.

The Safer Trucks programme, launched in 2024, provides safety ratings for heavy goods vehicles (HGVs). In its first two years, the initiative has assessed 30 truck models and identified safety gaps in the freight sector. Data indicates that in collisions involving HGVs, 90 percent of fatalities are occupants of other vehicles or pedestrians and cyclists. Freight transport accounts for the movement of 95 percent of goods across the EU.

Allianz operates in 70 countries and will contribute expertise on risk trends and claims data. The Allianz Center for Technology will serve as the centre for automotive technology and traffic safety to promote vehicle safety.

The involvement of insurers in safety assessments aims to inform manufacturers and fleet operators about areas for improvement. According to the programme, avoiding accidents reduces repair costs and downtime, which can lead to lower insurance premiums for fleets.

Matthew Avery, Director of Strategic Development, Euro NCAP, said, “We are delighted to welcome Allianz to the Safer Trucks programme. Their expertise in risk and casualty analysis adds a valuable new dimension to our multi-disciplinary approach. Safer Trucks is designed not only to benchmark safety performance but also to catalyse improvements in truck design and technology. By integrating risk insight from Allianz with our independent testing data, we aim to accelerate safety innovation across the commercial vehicle sector.”

Matthias Trustedt, Head of Global P&C, Allianz SE, said, “Joining Euro NCAP’s Safer Trucks initiative aligns with our commitment to reducing road risk through evidence-based insights. We believe that independent safety ratings, tied to real-world risk data, can influence both purchasing decisions and the development of safer vehicle technologies. Allianz is proud to support this important work, to help fleet operators make informed choices that protect drivers and other road users, and to offer them tailored and risk-based insurance solutions.”

Christian Sahr, MD, Allianz Center for Technology, said, “Our accident research shows that modern safety systems in trucks can significantly reduce the number of serious accidents. In addition to protecting life, avoiding accidents brings economic benefits for fleet operators because a fleet with lower repair and downtime costs is more efficient, offers better working conditions for drivers, and has significantly lower insurance premiums. Through our cooperation with Euro NCAP, we see excellent opportunities to use our combined expertise to improve the market penetration of safety systems that are already available and that contribute to accident prevention.”

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Piaggio Vehicles (PVPL), a subsidiary of the Piaggio Group, has secured an order for more than 100 units of its Ape Xtra Bada 700 cargo three-wheeler from HeidelbergCement India.

The three-wheelers will be deployed across 53 districts in Uttar Pradesh, Madhya Pradesh and Bihar. This order marks the entry of the new diesel cargo model into industrial applications.

The Ape Xtra Bada 700 features a 700 DI diesel engine, a 7-foot cargo deck and a payload capacity of 750 kg, which is the highest in the three-wheeler cargo segment. The vehicle is equipped with 12-inch radial tyres, a digital instrument cluster with a 3.5-inch LCD and an optional rear sensor for reversing.

The vehicle architecture includes a chassis and suspension geometry designed for stability and load distribution. The cabin is engineered for long-distance operation and the engine is tuned for torque and pickup. Piaggio offers a five-year warranty on the model. The company positions this three-wheeler as a replacement for entry-level four-wheeler small commercial vehicles (SCVs) due to its operating economics.

Amit Sagar, Executive Vice President, CV Domestic Business & Retail Finance, Piaggio Vehicles, said, “This flagship order from Heidelberg Cement India Limited is a strong validation of the Ape Xtra Bada 700’s disruptive capabilities. At Piaggio India, we have always believed in pushing the boundaries of innovation in the last-mile mobility segment. The Ape Xtra Bada 700 sets new industry benchmarks in engine capacity, deck size and payload, and is designed to empower customers with more productivity and superior earnings. Breaking into applications traditionally dominated by 4-wheeler SCV marks an important milestone in our journey of offering better TCO and profitability to our customers.”

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Tata Motors, one of the leading commercial vehicle manufacturers, has received orders for more than 5,000 buses and bus chassis from various State Transport Undertakings (STUs) across India. The company secured these orders through a competitive e-bidding process with deliveries scheduled to take place in phases according to agreements with the respective transport corporations.

The orders were placed by several organisations, including the Maharashtra State Road Transport Corporation (MSRTC), Gujarat State Road Transport Corporation (GSRTC) and the Telangana State Road Transport Corporation (TGSRTC), among others. The contract includes models such as the Tata Magna, Cityride and Starbus, as well as LPO 1618, 1622 and 1822 chassis variants. These vehicles are designed for intercity, long-haul and intracity operations.

The company's passenger vehicle portfolio includes vehicles ranging from 9-seater to 55-seater capacities. To support these fleets, Tata Motors provides Sampoorna Seva 2.0, a vehicle lifecycle management programme. This service includes maintenance, spare parts availability and breakdown assistance through a network of over 4,500 sales and service touchpoints.

Anand S, Vice-President and Head, Commercial Passenger Vehicle Business, Tata Motors, said, “This recognition by multiple State Transport Undertakings reflects the deep trust placed in Tata Motors’ mobility solutions. Our buses are designed to deliver comfort, safety and long‑term reliability across varied terrains and duty cycles. With strong product engineering and a lifecycle support ecosystem built around customer uptime, we continue to enable STUs to serve millions of passengers every day. These cumulative orders strengthen our position as the country’s preferred mobility partner and reinforce our commitment to shaping India’s public transport of tomorrow.”

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