Mitsubishi commits Rs 300 cr in TVS Mobility for 32% stake

CHENNAI: TVS Mobility, the demerged entity of TV Sundram Iyengar & Sons Private Ltd, has entered into a joint venture with Japanese trading behemoth Mitsubishi Corporation (MC), to create a comprehensive vehicle mobility ecosystem in India.

MC is to invest Rs 300 crore for a 32 per cent shareholding in TVS Mobility, R Dinesh, director, TVS Mobility, told the media here on Monday. The deal is subject to regulatory approvals.

Seeking to leverage the success of running dealership business over several decades now, he sought to point out that the four verticals - vehicle dealership, supply chain, spare parts business and services and manufacturing companies - have touchpoints connected with the moblity space. As part of the JV, a new subsidiary - TVS Vehicle Mobility Solution (TVS VMS) has been created by hiving off from TVS Moblity holding company.

This is aimed at disrupting the mobility space with complete integration through a plug-and-play model. Integration of a suite of services in this model is to provide solutions for the B2B and B2C segments as well, Dinesh said. Important developments arising out of the JV is the formation of a separate company, the entry of MC and the potential to tap relationship with global vehicle manufacturers, he added.

Shigeru Wakabayashi, CEO, Automotive and Mobility Group, MC, in a virtual address, confirmed the latest “strategic relationship with TVS Mobility Group, (including the investment in TVS Automobile Solutions in 2019)” as he went on to highlight India being the “world’s third-largest market for new automobiles with sales topping 5 million vehicles in 2023 and expected to grow at 6-7 per cent in the next few years.”

G Srinivasa Raghavan, global president and CEO, TVS Mobility and MD, TVS Automobile Solutions, said 95 per cent of vehicles sold today are connected. Also, large engineering companies were keen to find out tangile solution to manage their equipment needs across multiple locations. TVS Mobility is confident of providing an end-to-end mobility experience based on its core competencies.

Referring to the investment by MC as a “seed capital for building the business,” Dinesh said the JV would mean expanding dealership partnership with manufacturers, besides directing the relationship from vehicle ownership in passenger cars, commercial vehicles and material handling equipment to usership through its latest vehicle as a service (VaaS)offering model.

VaaS and moblity as a service business have the potential to achieve $2 billion revenue within five years. Current revenue of TVS Mobility is Rs 5,000 crore.