An announcement has been made by CNH Industrial that, truck manufacturer, Iveco is to spin off from its current owner. The implications for Iveco globally and locally in Australia, where the company still manufactures trucks at its plant in Dandenong, Victoria, is, as yet, unclear. According to the statement the spin off is expected to be completed by early 2021.
“The spin-off of the ‘On-Highway’ assets (Iveco and FPT Powertrain) will maximise management focus and flexibility, align investment priorities and incentives, better meet respective business needs and optimise the cost and capital structure of each company to drive profitable growth,” says a statement made by CNH Industrial at its New York Investor Day earlier this week.”
Under the company’s ‘Transform 2 Win’ strategy, announced in New York, the newly listed ‘On-Highway’ company, with 2018 revenues of $13.1 billion, will comprise the Iveco, Iveco Bus and Heuliez Bus commercial vehicle brands (69 per cent of revenue), together with the FPT Industrial powertrain business (31 per cent of revenue).
“The bold plan will lead to the creation of two new global leaders in their respective fields,” said Suzanne Heywood, Chairperson, CNH Industrial. “The Board of Directors strongly supports this ambitious strategy and its confidence is underpinned by the rigorous work undertaken to formulate it.”
Alongside the news that Iveco is to spin off from its current owner, CNH Industrial also announced at the New York event it’s intention to enter into a strategic and exclusive partnership with Nikola Corporation to accelerate industry transformation towards, ‘emission neutrality in heavy duty trucks in North America and Europe through the adoption of fuel cell technology’.
Nikola’s zero-emission trucks, powered by proprietary hydrogen fuel cell and battery technology, are expected to be the first to production. The company’s disruptive business model foresees an industry-first ‘all-in’ lease rate, which includes vehicle, service, maintenance and fuel costs, providing long-term total cost of ownership certainty at or below diesel costs.
CNH Industrial says it will take a $250 million strategic stake in Nikola as the lead Series D investor, comprising $100 million cash and $150 million in services, such as product development, manufacturing engineering, and other technical assistance, as well as supply of certain key components to accelerate the production timeline of the Nikola TWO and Nikola TRE.