Mitsubishi Corp, TVS Mobility join hands to float JV, will focus on mobility solutions, sales

Automotive distribution and aftermarket major TVS Mobility has inked a partnership with Japan's Mitsubishi Corporation to establish a joint venture (JV) that will focus on vehicle mobility solutions. TVS Mobility's vehicle dealership business will be renamed 'TVS Vehicle Mobility Solution' or TVS VMS and Mitsubishi will invest ₹300 crore to pick up a 32% stake in the business.

"The joint venture between TVS Mobility and Mitsubishi can bring the mobility solutions ecosystem together and allow us to scale up rapidly," said R Dinesh, Director, TVS Mobility, in an interaction with CNBC-TV18. "Our growth opportunities are huge—the JV will extend to buses, off-road equipment, EVs and even LCVs for last-mile connectivity."

Mirroring Dinesh's projections, was the CEO of Mitsubishi Corporation's automotive and mobility division, Shigeru Wakabayashi.

"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% to 7% in the next few years," he said in a statement. "Our latest investment in TVS VMS widens Mitsubishi Corporation's investment coverage through enhanced service capabilities even further."

The statement added that TVS VMS would aim to develop comprehensive mobility solutions spanning not only after-sales services and multi-brand sales but also a 'vehicle-as-a-service' model. TVS Mobility, on its part, is optimistic about rapid revenue growth.

"We will aim for ₹15,000 crore by way of a revenue target in the next three years," said Dinesh. "We hope to hit $2 billion in revenues in the next three to five years." He added that these targets were only by way of operational revenues, which would further be augmented by vehicle sales.

While Mitsubishi has existing expertise in off-road equipment and last-mile delivery services, TVS Mobility is confident that the Japanese conglomerate can help it scale up faster and build profits better. "On our part, we bring the digital know-how and digital savviness to the venture," Dinesh added.

While TVS VMS will firmly focus on the Indian market for now, the scope for global expansion, especially in "neighbouring markets" and markets where Mitsubishi already has a presence, is on the cards. The JV's focus on digital solutions, connected mobility and EVs could also hold scope for better operational efficiencies.