New Delhi: The Japanese Brand Mitsubishi is all set to make a big comeback in the Indian car sales market this summer. Yes, you read it right. However, this time, the business will be operated with TVS Mobility as the company is likely to acquire around 30 percent stake in the company’s car dealership.
As per the details shared by Nikkei Asia, Mitsubishi is expected to invest around 5 billion to 10 billion yen ($33 million to $66 million) for the same. Reports say once the investment gets finalized or gets approval from the concerned entity, it will start dispatching its employees to dealerships in the country.
TVS Mobility, a TVS Group company with presence in automotive retail and aftermarket businesses, has formed its second partnership with Mitsubishi Corp. This would entail the Japanese conglomerate investing Rs 300 crore for a 32% stake in TVS Vehicles Mobility Solutions (TVS VMS), a newly formed subsidiary.
The alliance is part of a broader effort to establish a comprehensive vehicle mobility ecosystem in India, TVS Mobility said in a statement on Monday. The transaction is subject to regulatory approval.
As part of the pact, TVS Mobility’s dealership business will be transferred to TVS VMS. TVS Mobility currently has the dealerships of Ashok Leyland in Kerala, Karnataka, Madhya Pradesh and Tamil Nadu, Mahindra Trucks & Buses and Renault in Kerala, Honda Cars India dealerships in Andhra Pradesh, Tamil Nadu and Telangana. It also runs tractor and construction equipment dealerships in some select states in southern India.
“TVS VMS will provide innovative and digitally enabled solutions to our customers, be it enterprises, corporates or fleet owners and expand our partnership with vehicle manufacturers to provide integrated solutions across vehicle sales, operating of vehicles and ‘Vehicle-as-a-Service’ (Micro-mobility) solutions. This partnership will work closely with other stakeholders to provide a solution for all such stakeholders,” said R Dinesh, director, TVS Mobility.
He said the investment is “intended to propel” the vision of the two companies on vehicle ownership in passenger cars, commercial vehicles, and material handling equipment (MHE). The business model will have the potential to achieve $2 billion revenue in the next three to five years, he added.
Mitsubishi comprises around 1,700 group companies worldwide. The conglomerate plans to bring in its global experience and share its best practices to scale up this business model faster. Mitsubishi is already an investor in TVS Mobility’s after-sales services business, TVS Automobile Solutions.
“The latest investment in the multi-brand dealer TVS VMS widens Mitsubishi’s investment coverage through enhanced service capabilities even further and should propel its aim to develop comprehensive mobility offerings spanning not only after-sales services and multi-brand sales, but also vehicle-as-a-service model, and other automotive operations.” said Shigeru Wakabayashi, CEO of Automotive and Mobility Group at Mitsubishi Corp.
