Tata Motors reignites European ambitions with $4.5 bn Iveco deal

Tata Motors' acquisition of Italian truck manufacturer Iveco in a $4.5 billion deal has reignited the company’s ambition for the European market. Touted to be the largest acquisition by any domestic automaker, the acquisition complements Tata Motors' global ambitions.    “Markets where Tata Motors and Iveco play are very complementary to each other. The product portfolio in terms of pricing and capabilities is also complementary to each other. So, they have strong technology investments in powertrains, electrification, hydrogen, ADAS, and SDV, and are complemented with frugal Indian engineering capability, design to value capability, and these capabilities will together bring strong competitiveness for both businesses,” said Girish Wagh, Executive Director at Tata Motors, at a select media roundtable on Thursday.    According to Wagh, Tata Motors has already identified synergies between the two companies in the form of revenue, capital expenditure, and operational expenditure.    “This acquisition, once completed, will not only give us access to products and platforms and manufacturing facilities but also strong brands, Italian lineage, strong capabilities and a strong service network not only in Europe but also in Latin America. Detailed financing capabilities in all these markets,” said Wagh.    As per the details shared by the management, Iveco and Tata's commercial vehicle operations together are expected to generate approximately 22 billion euros ($25 billion) in revenue, with Europe contributing around 50%, India accounting for 35%, and the rest coming from the Americas.    For Iveco Group, in 2024, the truck segment remained the largest revenue contributor, generating approximately 10 billion euros with an EBIT margin of 5.6%. The company holds an 11% market share across Latin America and Europe, supported by key manufacturing facilities in Italy, Spain, and Brazil. Iveco's bus division recorded revenues of 2.6 billion euros with an EBIT margin of around 5.5%. It is the second-largest bus manufacturer in Europe, offering a comprehensive range of products across city, inter-city, and other segments. Meanwhile, the powertrain business posted revenues of 3.5 billion euros in CY2024, with an EBIT margin of 6.2%, positioning Iveco as the sixth-largest engine manufacturer globally.   Approximately 75% of the Group’s revenue is generated from Europe, highlighting its strong regional presence. South America and the rest of the world each contribute 12% and 12%, respectively, to the overall revenue, while North America accounts for just 1%, indicating relatively limited exposure in that market. “This acquisition, once completed, will not only give us access to products and platforms and manufacturing facilities but also strong brands, Italian lineage, strong capabilities and a strong service network not only in Europe but also in Latin America. Detailed financing capabilities in all these markets,” says Wagh.  The deal, set to be finalised by April 2026, will provide Tata Motors’ truck and bus division a strong entry into the European market, putting it in direct competition with Volvo and Daimler. While Tata already operates in Europe through Jaguar Land Rover, the luxury brand is facing growing challenges in key markets like China and the United States.

Tata Motors’ latest move into Europe marks its second foray into the region’s commercial vehicle space. Back in 2005, the company took an initial 21% stake in Hispano Carrocera, a prominent European bus and coach body manufacturer with additional operations in Casablanca, Morocco.

By 2009, Tata had acquired full ownership and rebranded the company as Tata Hispano Motors Carrocera S.A., which operated plants in Zaragoza and Casablanca with a total production capacity of approximately 2,000 units per year. Tata Hispano played a key role in supporting Tata Motors’ bus design and assembly efforts in India.

However, following the 2008 financial crisis, Europe’s bus market saw a significant downturn. Over five years, Tata Hispano racked up losses exceeding €60 million—including about €14 million in 2012 alone. In September 2013, Tata Motors announced plans to close the Zaragoza facility, citing persistent financial strain and weak market conditions. Production wrapped up by October, affecting around 287 workers.   Meanwhile, in 2004, Tata Motors acquired Daewoo Commercial Vehicle Company, marking its first major international acquisition and a strategic step to expand its global footprint in the commercial vehicle (CV) industry.   The deal comes right before the demerger and listing of CV business in October this year.