Powertrain, engines and global footprint: How IVECO could drive Tata Motors toward a $35-40 bn revenue path

Tata Motors $4.4 billion buyout of Italian commercial vehicle maker IVECO has potential to boost the combined entity’s revenue from $25 billion to $35-40 billion over the next five years, chairman N Chandrasekaran said at the company’s annual general meeting.

“The combined revenue of Tata Motors and IVECO at the time of merger will be around $25 billion. Over the period of the next five years, it has got a significant potential to grow to $35-40 billion,” said Chandrasekaran.

Tata Motors expects to complete the IVECO acquisition before the September quarter.

“IVECO approvals, we hope, will get completed before Q2. If that happens, the results will get consolidated from the October quarter,” said Chandrasekaran.

“There are significant synergies and opportunities due to IVECO. Their product portfolio is suitable for many markets and they are very strong in the LCV segment, buses and engines,” said Chandrasekaran, adding that Tata Motors sees significant synergies and plans an expansion of IVECO’s engine business.

“Tata Motors will also bring specific platforms which make sense to our market. Also, we will take our products through their distribution wherever it makes sense,” he explained.

IVECO buses have a strong presence all across Europe, he added.

The proposed acquisition of IVECO is a key strategic step in Tata Motors’ global growth plans. The transaction has secured most of the required regulatory approvals, with the remaining approvals progressing as planned.

The acquisition is expected to provide access to advanced powertrain and next-generation technologies, expand Tata Motors' international footprint, and strengthen its product portfolio across global markets.

Together, Tata Motors and IVECO aim to enhance scale, competitiveness and innovation, with the ambition of becoming one of the world's top four commercial vehicle manufacturers.

“Together, we will optimise, scale and grow to be ranked amongst the top 4 Commercial Vehicles entities, globally,” said Chandrasekaran.

Tata Motors maintained its leadership in the Indian commercial vehicles market, with sales volumes growing 13% to over 435,000 vehicles. Revenue increased 9.8% to a record ₹83,855 crore, EBITDA margins improved to 12.3%, and return on capital employed reached 72.3%. Based on this performance, the Board recommended a final dividend of ₹4 per share.