Iveco trucks parent company CNH Industrial has announced it plans to split its ‘On-Highway’ and ‘Off-Highway’ assets within the next 18 months once it gains sharholder approval.
The proposal is part of a strategy it is calling Transform 2, a five-year plan that will see Iveco become the major player in a separately listed entity.
It follows a major look at CNHI’s portfolio of companies and operations including , strategy as well as investor and synergy considerations.
CNH Industrial chair Suzanne Heywood said the bold plan will lead to the creation of two new global leaders in their respective fields.
“The board of directors strongly supports this ambitious strategy and its confidence is underpinned by the rigorous work undertaken to formulate it,” said Heywood.
The on-Highway portfolio will include the Iveco, Iveco Bus and Heuliez Bus commercial vehicle brands and these comprise around 69 per cent of revenue while the FPT Industrial powertrain business will make up hte remiaing 31 per cent.
CNHI says Iveco’s market position and product line-up will gain investments in product and technology upgrades, witnessed by the investment in the Nikola hydrogen truck program.
It says that FPT Industrial will produce powertrain solutions and champion alternative propulsion solutions and will continue to be a major supplier to off-highway through supply agreements.
Unde the plan off-highway will generate 75 per cent of its revenues from agriculture, through Case IH, New Holland Agriculture and Steyr, with around 19 per cent of revenue to come from construction through the CASE Construction Equipment, New Holland Construction and Iveco Astra heavy duty quarry trucks.
The plan will see specialty vehicles will remain within the off-highway portfolio and generate around six per cent of revenue with the aim of building its market positions with a stronger product line-up, improved distribution and increased investment in automation and digitalisation activities.
CNHI’s military vehicles and its Magirus firefighting line up will develop their offerings for their specialised customer base.
CNHI CEO Hubertus Mühlhäuser said the Transform 2 Win strategy sets an exciting new direction for the company.
“By developing ambitious yet achievable targets for each segment and reorganizing our structure to create two global leaders, all of our great businesses will be better able to realise their full potential in terms of financial performance, shareholder and broader stakeholder value generation and sustainability commitments,” Mühlhäuser said.
“Our clear assessment of the key megatrends that are rapidly changing the business landscape has led us to embrace this challenge and transform the company,” he added.
“The companies will accelerate innovation, be nimbler in strategic thinking and actively participate in industry consolidation and is consistent with the strategic purpose of ‘powering sustainable transformation,” Mühlhäuser concluded.
Truck e News contacted Iveco Australia for comment but we were advised that an offical statement is expected later this week.