When a company is formed by merging or owning multiple companies, such a company is called a joint venture. Currently, they are doing good business. But their Jaguar, its condition seems to be very bad.
Tata in the Indian Automobile Market
It can be said that Tata is doing well when it comes to passenger vehicles. Nothing extraordinary. But the same cannot be said for their truck segment. Because Tata holds almost 40% share of the Indian commercial vehicle market.
Due to this, Tata is the largest truck manufacturer in India. But not only that. Like our cars, Tata also sells its trucks to many countries of the world.
And if we talk about size, by 2024, Tata was also the 10th largest truck manufacturer in the world. Otherwise, Tata Trucks also fully owns Korea’s Daewoo Commercial Vehicles. It is currently the second largest truck manufacturer in Korea. So Tata has a good reputation in the world when it comes to trucks.
Tata in the European Truck Market
But now Tata is going to do something that will increase its status beyond the hatch. And Tata can also capture the European truck market. In fact, Tata Motors is buying Iveco, the third largest truck manufacturer in Europe, for about $4.5 billion, or Rs 38,000 crore.
This acquisition is said to be Tata Motors’ biggest acquisition till date, because even at the time of JLR, Tata had spent $2.3 billion. Here they are spending more than twice that. Out of this total, Tata will raise almost $1.15 billion through the acquisition, which is a huge amount.
And since Tata is taking such a big risk, many also believe that Tata might make a wrong move. That is why after the deal was announced, Tata Motors shares fell by 4%.
So the big question is, why is Tata taking such a big risk? What is special about this company? What is the benefit of this acquisition for Tata Motors? Why is one of the largest truck manufacturers in Europe selling itself to Tata? I am going to answer all these questions one by one in this article. We should start by knowing about this European company.
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The Role of lveco in Europe
So Iveco is an Italian company that was started in 1975. It was formed by the merger of 5 companies. Namely Fiat Industrie Ali, OM, Lancia, Ukic and Megerius Dwitz. Iveco very quickly became a large commercial vehicle.
Today the share of this company is very large in the European Union. This company has a share of almost 13 percent in the European truck market.
Due to this, it has always been the third or fourth largest company in Europe and is in direct competition with big truck companies like Scania and MAN. You must have heard their names too. Apart from this, Avego has proven the capability and power of its engines many times in the Dakar Rally or the Rattles event, even in the case of Avego LSV i.e. light commercial vehicles.
Engine
And if we talk about this year, Avego has also won the Dakar Rally in the truck category in 2025. In this, its Power Start truck completed the rally in about 58 minutes and out of the top 10 trucks, only 9 were Ivego Power Start, meaning that this company has completely dominated this truck class and every winning truck had a 12.9 liter Karsaver 13 engine. It produces 1000 BHP and 5000 Nm of torque.
It is because of this engine and the resilience of their drivers that these trucks are able to perform so well. And their amazing engines are probably a big reason why their sales are so high.
So now we understand that this is not a random truck manufacturing company. This company is amazing. It has a huge market share and is very technologically advanced. So the big question is why is it being sold to Tata if everything is fine.
Iveco Automobile Company
Look! Iveco is currently owned by the Agnelli family. They own 27% of it and 47% of the boating rights. And the Iveco family wants to sell this company and make money from their shares. Because, like every automobile company, Iveco is also an automobile company. And it takes a lot of money to run companies in this sector.
It is very capital intensive and the profit margin in this is 5.6-5.8%. Apart from this, the trucking market within Iveco has also collapsed. If Iveco wants to sell the Hybrid and continue with the Arend and Evolution electric trains, they will have to take more dates. This is not possible in this downturn.
The Company is for Sale
Even though Iveco is the third or fourth largest truck company in Europe, it will need pooling to compete with giants like Volvo, Daimler, Askania, Scale and Arendt. Because these brands are already owned by large groups and this is where Tata Iveco can be useful. It can meet their needs. Apart from this, the biggest reason for selling this company is the premium that Tata is offering them.
Yes, Tata Motors is paying 34-41% premium to Iveco over the total share price. That means Tata Motors is paying so much extra money for this deal. But why? I agree that Iveco has a strong hold on the European market. But what does Tata get out of paying so much useless money, look, there is a big reason.
This means that many vehicles that they did not have till now can also come into Evaco’s portfolio. For example, if we talk about the light commercial vehicle category, Evaco has the Daily Series vehicles like Daily Van, Daily Cap, Daily 70, Mini Bus and many other vehicles in this format.
They can be widely used in almost all configurations. Also, in the LCB segment, Evaco also has the E-Jolly and E-Movie series vehicles.
They are fully electric and designed for high loading capacity. Both these series of vehicles come in many forms and form factors.
Iveco is the Second Largest Company
Again, this is for Tata Big Time, extra weight trucks with a capacity of 32 tons are available. And they come with off-road capabilities. And the TVE series trucks are also available.
They have a load capacity of about 41 tons. Apart from this, as I mentioned earlier, Iveco is the second largest bus company in Europe. So they have many such buses, short vans, etc. They are very useful for Tata.
Iveco’s Technology – Tata’s Advantage
Looking at Iveco’s portfolio, it is understandable that Tata can leverage a lot of their cars’ technology. Especially Iveco’s light commercial vehicle is in the electric category.
Tata can get a lot of advantages there. And they will get a lot of H. Apart from this, Tata will also get a lot of advantages from Iveco’s engines as Iveco has diesel hybrid, marine engine hybrid, hydrogen and electric power trains. So of course, owning a company of this size will be very beneficial.
Apart from this, Tata will also be able to enter the European market. And it will definitely be able to understand this huge auto market. And in the coming period, Tata will get a lot of help in globalizing itself. Because the company is in Europe. And this kind of acquisition brings a lot of money to the country.
Will Tata Benefit
Okay, we know how Tata will benefit from this acquisition. But what will happen? Will this company also benefit from this acquisition? Look! It is impossible to predict this now. But, Tata ownership has proven to be beneficial for Indian companies. Let’s talk about Daewoo, for example.
Tata acquired the growing South Korean company Daewoo in 2004 for Rs 465 crore. Today, this company is the second largest truck company in South Korea with a 26% market share.
The growth of this company also seems to be stable for the time being. Similarly, Land Rover is also growing well within Tata. Yes, Jaguar has finished its story, but overall, Tata ownership has proven to be a profitable deal for other brands. And Tata will definitely benefit from this.
As I said earlier, Tata is currently the 10th largest truck mega-liter. If you combine the sales of these two brands, these two companies will reach the 5th position. That means Tata will become very big. What I am saying is that Tata is working on its acquisition path.
Indian Investors Happy
And I think the Indian people will be happy with this too. But it remains to be seen how this deal goes in Tata’s favour. Because after this deal was announced, whether it is Wago’s investors or Tata’s investors, many investors in this group have reduced their interest and have also shown their fear as their share numbers are going down.
So this is the article for today. That’s all there is to this article. If you liked my article, please share this article and yes, follow me on WhatsApp. I have explained everything in great detail. Many good people are doing this. And many good people have started making videos as well.
