(Alliance News) - Iveco Group NV announced Tuesday that the Iveco brand has signed a memorandum of understanding with Foton, a leading commercial vehicle manufacturer in China, to explore potential collaboration in the areas of electric vehicles and components, and joint business opportunities, for Europe and South America.

"Foton, a Chinese commercial vehicle company that is part of BAIC Group, shares Iveco Group's commitment to promoting the sustainable transformation of the global automotive industry by pursuing multiple pathways through new propulsion technologies for commercial vehicles, such as pure electric, hybrid and hydrogen fuel cells," Iveco details in the note.

"The possible cooperation will also support Foton in the pursuit of its globalization strategy," the statement further reads.

This partnership, which is part of Iveco Group's overall electrification strategy, aims to extend its light commercial vehicle range to the total ground weight category below the iconic DAILY's 3.5 to 7.2 tons, thus adding both fully electric cab and van vehicles below the 3.5 ton PTT threshold.

With Foton, Iveco Group will explore the option of using Iveco's sales channels to market in Europe and South America an electric van vehicle in the lightest category up to 3.5 tons total ground weight. This van vehicle will have a potential positive impact on regional and local supply chains in Europe and South America, as well as support the growth of Iveco's sales and maintenance network.

Earlier this year, Iveco Group also signed an agreement with Hyundai Motor Company for the supply of an electric cab vehicle with PTT between 2.5 and 3.5 tons, which will be sold and serviced in Europe by Iveco.

The memorandum of understanding between Iveco Group and Foton, the company points out, also opens up the possibility of exploring new future synergies, including the possible localization of activities in Europe and South America, which will be evaluated at a later stage.

Supply opportunities, including through FPT Industrial, Iveco Group's industrial engine brand, will also be discussed.

Iveco Group gives up 2.4 percent to EUR10.80 per share.

By Chiara Bruschi, Alliance News reporter

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