Mitsubishi Corporation, the Japanese conglomerate, will be taking a 32 per cent stake in TVS Vehicle Mobility Solution Ltd (TVS VMS). TVS Vehicle Mobility is a subsidiary of TVS Mobility, the entity formed by the demerger of some business from T V Sundaram Iyengar & Sons Pvt Ltd.

TVS VMS will be taking over the existing automobile dealership business of TVS Mobility.

The dealership business, which will come under TVS VMS, is one of the largest in India. Its 152 dealerships across sectors distribute commercial and passenger vehicles produced by companies such as Honda, Renault, Ashok Leyland and Mahindra as well as mining and construction equipment of several players.

“The idea behind this formation of a new company is to recreate the mobility space by approaching it from a complete integration – which will start from sales and service to offer a complete suite of services and it will be a plug-and-play model. The second element is to bring the ecosystem, a core element of TVS Mobility, together,” said, R Dinesh, Director, TVS Mobility.

He said the business model of TVS VMS carried the potential to achieve a revenue of about ₹15,000 crore in three to five years, up from about ₹.5,000 crore now.

TVS Mobility’s spin-off plan has been prompted by the emerging trends in the mobility ecosystem. India’s near-term market growth will likely reflect a mix of ownership, usership, ICE vehicles and electric vehicles. Hence, it is expected that the customer needs comprehensive mobility solutions that not only include the sales of vehicles but also cover after-sales service, leasing, insurance and other services which will rise in the future.

G Srinivasa Raghavan, Global President, TVS VMS said, the new company would continue to expand the dealership business, which it has been doing, in partnership with vehicle manufacturers. Further, it would seek to provide integrated solutions across vehicle sales, operating of vehicles and ‘Vehicle-as-a-Service’ (B2B) solutions or mobility as a service (micromobility and provide innovative and digitally enabled solutions to its customers that include enterprises, corporates or fleet owners).

Mitsubishi sees this as a great opportunity to bring their strengths in terms of capabilities they have – whether in operational leases in the equipment sector or helping TVS Mobility in scaling up the business significantly in India.

“This latest investment in TVS VMS should propel Mitsubishi’s aim to develop comprehensive mobility solutions spanning not only after-sales services and multi-brand sales but also leasing and other automotive operations by utilising TVS VMS’ extensive customer base and digital technology,” Shigeru Wakabayashi, CEO of Automotive and Mobility Group at Mitsubishi Corporation said.