Tata Motors Acquisition Of Iveco To Alter Commercial Vehicle Landscape

In a landmark deal, Tata Motors announced its intention to buy the commercial vehicle business of Iveco group of Italy. The transaction is valued at approximately $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. What does this signify? A quick trip down time machine will put things in perspective and help understand the changing times and emerging market dynamics. Once upon a time, Iveco had a very strong partnership with Chennai-headquartered Ashok Leyland Ltd. (ALL), the flagship company of the Hindujas. The Italian group had both technical and financial relationship with Ashok Leyland, an arch rival of Tata Motors in the domestic market. Somewhere along, the alliance between Iveco and Ashok Leyland ended for assorted reasons. The Indian dream of the Italian group could not travel to its logical destination. Ashok Leyland subsequently aligned with the Japanese firm to roll out Hino model engines. 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 ground. How will this play out in the coming days? Well, the fingers are crossed at the moment.