Truckmaker Iveco Group announced its plan to restart bus production in Italy after more than a decade, taking advantage of funds from the EU-funded Recovery Plan to develop a fleet of low emission public transport vehicles.

The group, which separated at the beginning of this year from former parent CNH Industrial, said its bus producing unit would apply for access to a so-called Development Contract with Italy's Ministry of Economic Development, as part of the country's National Recovery and Resilience Plan (PNRR).

The aim is to develop and manufacture zero- and low-emission buses in the country -- battery electric (BEV) and hydrogen fuel cell vehicles as well as latest-generation methane, biomethane, diesel and biodiesel ones -- it added, without providing financial details of the plan.

A source close to the matter told Reuters public funds could cover around 25% of the investment.

As part of the plan, buses are expected to be assembled in Iveco's plant in Foggia, southern Italy, based on body frames and chassis supplied by other European facilities of the group, while engineering and manufacturing activities will be set up in Turin.