Tata Motors is targeting annual commercial vehicle sales of more than one million units in the coming years as it prepares to integrate Italy's IVECO Group, a move expected to create one of the world's largest commercial vehicle manufacturers and expand the company's global footprint.

Speaking at the company's annual general meeting on June 29th, Chairman N. Chandrasekaran said the proposed acquisition of IVECO forms part of Tata Motors' international expansion plans. The meeting also marked the first shareholder gathering of Tata Motors' standalone commercial vehicle business following its listing as a separate entity after the demerger in November 2025.

"The proposed acquisition of the IVECO Group marks a significant strategic step forward in advancing the Company's global ambitions," Chandrasekaran said.

According to the company, the combined entity is expected to rank among the top four global commercial vehicle manufacturers, expanding Tata Motors' international presence, technological capabilities, manufacturing network and product portfolio.

Combined business expected to exceed one million vehicles annually

Chandrasekaran said the combined Tata Motors-IVECO business would initially record annual sales volumes of approximately 600,000 vehicles.

"Together we will be in the range of 600,000 vehicles to start and easily see us crossing 1 million vehicles in the years to come," Chandrasekaran said.

He further added that the combined revenue of Tata Motors and IVECO at the time of integration would be approximately US$ 25 billion.

"Over the next five years it has significant potential to grow to US$ 35-40 billion. IVECO is a profitable, positive cash flow business in FY24 and FY25. In this year's first quarter, they made a small loss but overall it's a very strong business which has got potential for not only profits but also cash flows, together, we will optimise, scale up and grow to be ranked amongst the top four commercial vehicle entities globally," he said.

The acquisition remains subject to final regulatory approvals, although Chandrasekaran stated that most approvals are already in place and that the transaction is expected to be completed during the second quarter of FY27.

He further added that the acquisition would provide Tata Motors with access to advanced powertrain technologies and next-generation vehicle technologies while expanding its manufacturing capabilities and international operations.

"Tata Motors is debt free. The IVECO acquisition will be done by internal accruals and debt which will get paid over by the cash that will be generated by IVECO itself over the next three to four years," Chandrasekaran said.

FY26 performance following demerger

The expansion plans follow Tata Motors Commercial Vehicles' financial performance during FY26 after becoming an independently listed company following the demerger. Chandrasekaran described FY26 as a "robust and resilient" year for the newly listed commercial vehicle business.

"In November 2025, following the successful demerger, your Company was listed as a distinct Commercial Vehicles entity. This was more than a structural milestone-it marked a decisive step in our journey to build a world-class commercial mobility enterprise," he said.

During FY26, Tata Motors retained its position in India's commercial vehicle market, with sales exceeding 435,000 units, representing growth of 13% compared with the previous year. Growth was supported by performance in the intermediate, light and small commercial vehicle segments, alongside a recovery in heavy commercial vehicles, which achieved a market share of 55%, the highest level in a decade.

Revenue increased by 9.8% year-on-year to Rs. 838.5 billion (US$ 8.8 billion), while EBITDA margins improved to 12.3%, supported by operating leverage and cost discipline. Return on capital employed reached 72.3%. The board has recommended a final dividend of Rs. 4 per share for FY26, subject to shareholder approval.

Diversification and growth in emerging businesses

Tata Motors stated that it is continuing efforts to reduce dependence on the cyclical truck business by expanding higher-margin and more stable revenue streams. Non-cyclical businesses, including spares and services, recorded growth of 18.2% during FY26.

The company's electric mobility subsidiary, Tata Motors Smart City Mobility Solutions (TML Smart City Mobility Solutions), expanded its operations, deploying more than 3,800 electric buses across 10 cities. These buses have collectively covered more than 500 million kilometres while maintaining operational uptime of more than 95%. The company's connected vehicle ecosystem also expanded during the year. Fleet Edge surpassed one million connected vehicles, while the Fleet Verse digital commerce platform recorded growth in activity.

International operations increased by 53.9% year-on-year, supported by increased market penetration and major order wins, ahead of the planned IVECO integration. Chandrasekaran referred to the opportunities associated with the proposed IVECO acquisition when discussing the company's future growth prospects.