IN YET ANOTHER big move, Tata Motors has announced that it is buying the commercial vehicle business of the Iveco group of Italy. The transaction is valued at approximately USD 4.4 billion. This supposedly strategic acquisition is ostensibly designed to catapult Tata Motors into the league of truly global commercial vehicle manufacturers, significantly expanding its capabilities, reach and resilience in a dynamic global market. Much before the arrival of Tata Motors on the Iveco scene, the Italian firm had an Indian angle to its business. A quick trip down memory lane will help understand the Iveco connection to India. Once upon a time – in the 80s and 90s, Iveco had a strong partnership with Chennai-headquartered Ashok Leyland and their cargo series of trucks was based on Iveco’s EuroCargo technology. These trucks had factory-fitted cabs with Iveco engines and were an important part of Ashok Leyland’s portfolio. Over 350,000 trucks were reported to have been sold since their launch in India. The Italian group had both technical and financial relationships with Ashok Leyland, an arch-rival of Tata Motors in the domestic market. Somewhere along, the alliance ended and the Indian dream of the Italian group could not travel to its logical destination. Given this backdrop, long-time watchers of the automobile industry in India are expecting the acquisition of the commercial vehicle business of Iveco by Tata Motors to seriously alter the domestic playing field. If the historical footprint of Iveco in India was through Ashok Leyland, Tata Motors perhaps has laid the road for its future presence in India through the acquisition of the commercial vehicle business of the Italian firm. Will Iveco trucks return to India in a big way? Well, one must wait for a decisive answer.
