Tata Motors finds task cut out for Iveco turnaround after twin losses

The to-do list is long. Tata has to repair Iveco’s earnings while servicing the debt it took on to fund a deal worth more than €3.91 billion. The terms of the offer also stop it from restructuring Iveco right away and require it to keep the truckmaker’s industrial footprint, including several plants, intact.

Investors will be watching for a turnaround plan, which is expected to cover a review of sourcing, lower product development costs and higher combined sales. Iveco chief executive Olof Persson says he expects profit to recover in the December quarter, even though demand for light commercial vehicles is weaker, the economy is uncertain, and the mix of vehicles sold is working against the company.

“We have run global businesses for a long time. And I've been fortunate to build, manage and grow businesses globally across the world in more than 100 countries,” Chandrasekaran said in response to a question in Turin about Iveco’s plans for its international plants on Tuesday after the completion of the deal.

A weak performance in 2026 follows a slow year for the Italian firm in 2025, in which it saw its profitability more than halve to €233 million, and revenue fall 7% to €13.4 billion.

Iveco said its continued quality initiatives, which required additional resources across business units, weighed on profitability. The company said these efforts peaked in the September quarter and would gradually ease, with benefits expected to show up in performance over time.

Analysts at Nomura said in a 4 November note that Iveco's subdued performance and margin pressure reflected a weak European commercial vehicle market and macroeconomic uncertainty. The company's industrial Ebit margin fell to zero in the September quarter from 2.8% in the June quarter.

Nomura noted that Iveco had guided for its Ebit margin to improve from 5.4% in 2024 to 7.5% by 2028, but its own FY27 estimate is now 2.8%, highlighting the gap between the earlier ambition and the current earnings trajectory.

Fix earnings

Concerns about Iveco weighing on Tata Motors were first raised earlier this year. Analysts at Motilal Oswal Financial Services flagged on 30 January a lack of visibility into Iveco’s financials due to uncertainty in the markets it operates in, such as Europe and Latin America.

“Given the lack of visibility in its financials and given that this acquisition will initially be funded with a debt of €3.8 billion, we refrain from giving any incremental value to Iveco at this stage,” the note read.

Ayaan Kartik

Ayaan Kartik is a Delhi-based journalist tracking the ever-growing world of automobiles and their components. With an experience of five years ranging from short-form news at Inshorts to longform journalism at Outlook Business magazine, he has dabbled into different storytelling formats. At Mint, he tries to regularly mix story styles, from longforms to crisp news stories. He has completed his graduation from Delhi University where he developed a liking for reading and writing about the world we live in today. Apart from automobiles, Ayaan likes to read up on geopolitics which has increasingly affected various sectors of the economy. Of all the promises journalism holds, he likes the fact that it allows a person to simply explain to readers about what is happening in the world. And what better sector than automobiles, which everyone since growing up has seen and felt connected to. Whether it is China's increasing grip on automobiles to growing affection for EVs in the country, Ayaan likes to connect his love for geopolitics and data to his stories as readers become more demanding on the types of stories they want.