Iveco scouting local partner to re-enter India

Italian truck maker Iveco, a part of the 59.6-billion Fiat Group, is making a second attempt to enter the fast-growing truck market in India. A 9.6-billion company, Iveco is scouting for a local partner and India is on the top of its priority list, CEO Alfredo Altavilla said.

Speaking on the sidelines of the IAA Truck Show in Hanover, Altavilla told ET: "The only way to be successful in India is to have a strong local partner. India is one of the important markets in world; it is the topmost on my priority list." 

Iveco had a 15 per cent stake in India's second-largest truck maker, Ashok Leyland till 2006, before it sold off its share to the promoter, Hinduja Group, for 600 crore. Iveco was instrumental in offering the technology support to Ashok Leyland, but it has never existed as a standalone brand in India.

In 2007, the company also entered into an MoU with Tata Motors to analyze the possibility of engineering, manufacturing, sourcing and distribution of products, aggregates and components, but the MoU did not fructify into a formal agreement till date.

In 2011, Iveco reportedly said, both Tata Motors and Iveco did not find any synergies between their individual plans. However it was said to be in interested in exploring tie-up with Tata Motors in South America.

On possibility of alliance with Tata Motors, Altavilla said, "I think, Tata already has an extensive line up of products; they will keep on playing by themselves, it is my personal assumption."

He however added there could be a non- truck making company which it could be talking to. 

"We are always in talks with companies. There are a lot of strong Indian companies, which may not be playing in that field for time being, but they may still interest us," asserted Altavilla.

When questioned, if the company had any talks with Hero Group, Altavilla said, "Not so far." Hero Group had entered into a MoU with Daimler Trucks, but shelved their plans citing slowdown in 2009-10. 

The plans of considering an entry into Indian market comes at a time, when the world's largest truck maker Daimler is ready to roll out its Indianised truck range, BharatBenz into the country in the next few days. Related: BharatBenz commences production of trucks in India

India, which is the world's fourth largest truck market with sales of over 3,00,000 units is slated to overtake USA as the third largest market over the next few years and it is expected to grow at a compounded annual growth rate of 8-10 per cent over the next five years.

Over the last five years, India has already seen global majors like MAN, Volvo, Scania, Foton amongst other setting up Indian bases.

Iveco reported 15.1 per cent increase in revenues to 9.6 billion in 2011, with profits rising over 80 per cent to 490 million. The company already has a significant presence in Latin America and it has several joint ventures with Shanghai Automotive in China.

In fact, Iveco is aiming to triple its sales from the China JVs over the next five years, clearly indicating the importance of emerging markets for the company. However, India is the only market in the growing BRIC region, where IVECO is yet to enter.

Iveco sold 1.53 lakh units in 2011, posting a jump of 18.3 per cent led by over 28.9 per cent growth in sales in Latin America in 2011.