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A win-win collaboration

The expertise built by TVS over the last seven decades in the transport sector, notably in spare parts distribution and servicing, combined with MC’s global reach, could indeed be a win-win collaboration. TVS Automobile Solutions Pvt Ltd (TASL) is joining hands with Mitsubishi Corporation (MC) of Japan.

MC will help TASL expand the business and also participate in the growing Indian market. It will provide TASL access to Japanese automotive parts suppliers, distributors, and also their parts through the vast TASL network R D. Dinesh, Director, TASL, told media persons of MC increasing its stake from 3 per cent to 25 per cent in TASL valued around Rs 250 crore.

The transaction came through a combination of initial investment and secondary purchase from Kitara Capital had invested in TASL. The TVS unit companies headed by Dinesh have been substantial players in logistics and automotive, after-market spare parts sales and services.

TASL is a well-established active player in automobile after-market sales and service. Revenues last fiscal amounted to Rs 1300 crore and is expected to increase by 30-35 per cent in the current year to around Rs 1800 crore. Profit margins have been handsome. With the expertise built, the business has been expanding within the country. There have been exciting plans to expand overseas. Dinesh points to the vast potential for developing the overseas business from the current level of Rs 400 crore manifold. The extensive global presence of MC would help achieve this in quick time.

S Wakabayashi, Senior Vice President, MC, present at the media meet, provided a glimpse of the potential: “today we have over 1800 subsidiaries in 90 countries with 200 business offices.”

FOCUS ON EXPANSION IN AFRICA, MIDDLE EAST…

MC has been handling large volumes of auto parts businesses in several countries. The collaboration with TASL will help MC market Japanese auto parts in India and TASL could record significant expansion using the experience and vast network of MC across the globe. Dinesh anticipates quantum growth in a couple of years which may not be possible working on its own.

“The rich experience of Mitsubishi will help us grow together rapidly through this strategic partnership. Africa offers tremendous possibilities. MC has a wide reach in serving African countries. We would thus focus on Africa, Middle-East and Europe over time,” said Dinesh.

Dinesh points to the efforts made to service the large number of small parts-dealers, distributors, fleet owners and also to the thousands of tiny and small garages. TASL would endeavor to raise the quality of these through standardized operating practices, systems and technology inputs. TASL would offer training and a host of support services to the thousands of unorganized, self-employed entrepreneurs. With this in view, TVS has set up a knowledge center in Sriperumbudur to train such entrepreneurs.

The expertise built by TVS over the last seven decades in the transport sector, notably in spare parts distribution and servicing, combined with MC’s global reach, could indeed be a win-win collaboration. One can look forward to the thriving Indian and Japanese practices expanding rapidly in several countries.

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