Japanese conglomerate Mitsubishi Corporation (MC) has announced a new joint venture with India's TVS Mobility to provide comprehensive vehicle mobility solutions in the Indian market.
MC will make an initial investment of Rs 300 crore (around $300 million) to form a 50-50 joint venture company called TVS Vehicle Mobility Solutions with its Indian partner. The new company aims to establish a vehicle mobility ecosystem offering services including new vehicle sales, vehicle-as-a-service models, and fleet operating solutions.
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The joint venture is intended to propel the partners' vision for new models of vehicle ownership and use in passenger cars, commercial vehicles and material handling equipment. It has set a target to achieve $2 billion in revenue within the next 3-5 years.
TVS Mobility, which previously operated as TV Sundram Iyengar & Sons, has an established presence in India's automotive distribution and aftermarket. The new deal will spin off its dealership business into the TVS Vehicle Mobility Solutions joint venture.
Speaking about the joint venture, R Dinesh, Director of TVS Mobility, said it will provide innovative and digital solutions for enterprise customers, corporates, fleet owners and even individual consumers seeking vehicle-as-a-service options like micromobility.
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For Mitsubishi Corporation, the joint venture represents a major downstream expansion in India's fast-growing auto market. Mitsubishi has existing partnerships with TVS Mobility, including a previous investment in after-sales service provider TVS Automotive Solutions.
Shigeru Wakabayashi, CEO of Mitsubishi's Automotive and Mobility Group, said the company will bring its global experience and best practices to help rapidly scale up the new business model.
India is currently the world's third-largest market for new automobile sales. While the market is projected to grow at 6-7% annually, consumer preferences are shifting from vehicle ownership to usership models. The joint venture aims to capitalize on these trends with its range of mobility solutions.
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With this new collaboration, Mitsubishi Corporation is making a major strategic bet on capitalizing on the changing auto market dynamics in high-growth India. The success of the joint venture will depend on the partners' ability to understand evolving consumer demands and provide tailored mobility solutions.
