Japanese conglomerate Mitsubishi Corporation has acquired a 32% stake in TVS Mobility, a Chennai-based car sales and aftermarket company, for a new subsidiary to be set up by the company by demerging its existing car dealership business. It was acquired for Rs 300 million.
The new joint venture subsidiary called ‘TVS Vehicle Mobility’, which will undergo internal restructuring, will offer an integrated suite of mobility services, from sales and service to finance and insurance, for B2B (both small and medium-sized enterprises) . (such as large enterprises) and some of his B2C customers through a plug-and-play model. The investment is pending regulatory approval.
This agreement is the second partnership between Mitsubishi Motors and TVS Mobility Group, following the company’s investment in after-sales service provider TVS Automobile Solutions in 2019. This is expected to give the Pajero and Lancer maker a downstream foothold in India, the third-largest car market after the US and China. TVS Mobility will draw from the stable organization of the former TVS Group and from Mitsubishi’s global experience and best practices to scale its business model faster.
Making the announcement in Chennai on Monday, TVS Mobility Director R. Dinesh said Rs 300 crore from Mitsubishi will serve as seed capital. “We have a target of nearly $2 billion in revenue (of the new subsidiary) in three to five years. Our target is to achieve a revenue of Rs 15,000 crore in three years. “Scale matters in this business and profitable growth is critical,” he said. TVS Mobility’s annual revenue currently stands at Rs 5,000 crore.
The new venture will go beyond the independent aftermarket to provide businesses, enterprises, vehicle owners and vehicle manufacturers with integrated solutions across vehicle sales, vehicle operations and ‘vehicles as a service’ (micromobility) solutions. .
Dinesh said the partnership with Mitsubishi Corporation is strategic in nature and brings value through downstream capabilities in the form of knowledge sharing and presence in other global markets such as Thailand and Indonesia. “This partnership will allow TVS Vehicle Mobility to scale scale and profitability more quickly, thanks to someone who understands what works in other markets, and more quickly than starting from scratch. It also brings relationships that can be scaled up much faster,” he added. The company plans to consider expanding to other regions in the future, but its immediate focus is on India.
Shigeru Wakabayashi, CEO of Mitsubishi Corporation Automotive & Mobility Group, said, “This investment in TVS VMS, a multi-brand dealer, will strengthen Mitsubishi Corporation’s service capabilities (rather than investing in TVS Automobile, an after-sales service provider). We will further expand our investment scope.” solution) and promote the company’s goal of developing comprehensive mobility solutions that extend not only to after-sales service and multi-brand sales, but also to vehicle models as a service and other automotive businesses. ”