New Delhi: In a strategic move, TVS Mobility, a prominent player in the Indian Automotive Distribution and Aftermarket Industry, has announced a Joint Venture with the Japanese conglomerate Mitsubishi Corporation (MC). The collaboration aims to establish a comprehensive vehicle mobility ecosystem in India, transforming TVS Mobility’s dealership business into TVS Vehicle Mobility Solution (TVS VMS).
The deal, which is subject to regulatory approval, involves an initial investment of INR 300 crore for a 32% stake in TVS Mobility from Mitsubishi Corporation. Both the parties are committed to supporting the venture’s growth, with a shared vision of redefining vehicle ownership across Passenger Cars, Commercial Vehicles, and Material Handling Equipment (MHE). The ambitious business model sets a target of achieving USD 2 billion in revenue over the next 3-5 years.
“TVS Mobility had pioneered the sales, service, and distribution of vehicles market through its dealership business in India. This collaboration with MC will enable TVS to provide a range of solutions to the entire vehicle mobility ecosystem,” R. Dinesh, Director, TVS Mobility, said.
The partnership is not merely a financial investment. Mitsubishi Corporation brings global experience and best practices to expedite the growth of this innovative business model. Shigeru Wakabayashi, CEO of Automotive and Mobility Group at Mitsubishi Corporation, emphasized the significance of this investment in the context of India’s booming automobile market.
“India has the world’s third-largest market for new automobiles with sales topping five million vehicles in 2023 and expected to grow at 6-7% in the next few years. The latest investment in the multi-brand dealer TVS VMS widens MC’s investment coverage through enhanced service capabilities even further,” Wakabayashi said.
In an interaction with ETAuto, Dinesh shed light on the win-win propositions that this alliance brings. He highlighted the potential to scale up faster and integrate operating best practices from Mitsubishi’s global experience. The alliance aims to tap into the rapidly growing Indian market, offering not only after-sales services and multi-brand sales but also venturing into the “Vehicle-as-a-Service” model.
Dinesh explained, “We bring both the local capability and know-how and the ability to digitally integrate this, which is, I think, a very recent phenomenon. And Mitsubishi has been traditionally in this space. So it’s a win-win proposition for both.”
As for the size of TVS Mobility’s existing business, Dinesh revealed it’s currently around INR 5000 crore in revenue, with plans to reach INR 15,000 crore in the next three years. The target of scaling up to USD 2 billion reflects the dynamic nature of the mobility space, with a focus on material handling equipment and off-road products initially.
The alliance also opens avenues for Mitsubishi to explore possibilities beyond the initial collaboration. While TVS Mobility is manufacturer-agnostic in the mobility-as-a-service model, Dinesh hinted at the potential for Mitsubishi to introduce its passenger vehicle business under the TVS Mobility umbrella.
With a keen eye on India’s infrastructure growth and the flourishing logistics sector, TVS Mobility and Mitsubishi Corporation position themselves to pioneer sustainable and digitally enabled solutions in the evolving landscape of Indian vehicle mobility. The collaboration is not just a business venture; it’s a strategic move towards shaping the future of mobility in the country.
