Mitsubishi Corporation (MC) is pleased to announce that it has agreed to subscribe shares (approx. 32%) in TVS Vehicle Mobility Solution Private Limited (TVS VMS) through the private placement. The completion of these transactions is subject to approval by the relevant regulatory authorities.
To gain a downstream foothold in the rapidly growing Indian automotive sector, MC had invested in one of India`s largest independent after-sales services providers, i.e., TVS Automobile Solutions (TASL), in 2019. TASL has a network of roughly 700 service centers and partnerships with 16,000 retailers of wholesale auto parts connecting through digital technology.
This latest investment in TVS VMS, one of the largest multi-brand dealers in India, widens MC’s investment coverage through enhanced downstream service capabilities. This investment is intended to propel MC’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 utilizing extensive TVS VMS’ customer base and digital technology.
TVSM is one of TVS Group’s most recognizable companies, with a proud history in automobile sales dating back to 1951. In December 2023, TVSM established a new company called TVS VMS where these automotive operations will be spun off within 2024. Having inherited TVSM’s nationwide network built over time, TVS VMS is one of the leading automotive dealers in India. Its 152 dealerships carry construction and material handling equipment, in addition to distribution of commercial and passenger vehicles produced by number of automakers, including Honda, Renault, Ashok Leyland and Mahindra.
TVSM has an established local customer base, and its dealerships have sold more than one million vehicles since 1951 and performed roughly 100,000 regular maintenance services on an annual basis. In recent years, TVSM began focusing on customer convenience with the usage of digital technology and developed TVSOne, an app designed to offer one-stop services for insurance, finance, maintenance and other automotive and equipment needs.
India boasts the world’s third-largest market for new automobiles, with sales topping five million vehicles in 2023. While the market is expected to grow at 6-7%, a recent trend in India has been a transition from vehicle ownership to usership, particularly in the corporate segment. In India, where electricity is less expensive than petrol, more drivers are shifting from internal combustion engine vehicles (ICE vehicles) to electric vehicles (EVs) in order to enjoy the total cost of ownership advantage that the latter provides. As such, India’s near-term market growth will likely reflect a mix of ownership, usership, ICE vehicles and EVs. Due to these market conditions, it is expected that customer needs for comprehensive mobility solutions that not only include the sales of vehicles but also cover after-sales service, leasing, insurance, and other services would rise in the future.
MC has been engaged in overseas automotive businesses since the 1950s. Primarily targeting Thailand, Indonesia and other ASEAN markets, its operations cover everything from automobile manufacturing to sales, sales financing and after sales. In the fast-growing Indian market, MC got involved in manufacturing and sales since 2012 (through Isuzu Motors India Private Limited), and will further strengthen its operations together with TVSM led by Mr. Dinesh, currently serving as President of Confederation of Indian Industry (CII), though expansion of a customer base and the application of digital technology.
