Chennai: Mitsubishi Corporation has announced that it will increase its stake to 25 per cent, from three per cent earlier, in TVS Automobile Solutions Private Limited (TASL), in a bid to build a strategic partnership.
At a press meet held in the city on Monday, TASL director, R Dinesh said, ‘The business of TASL is growing; in financial year 2019, the company has generated revenue of Rs 1,300 crore in which Rs 400 crore comes from overseas countries – UK and Middle east.’
The companies announced of the new venture to bring the livelihood aftermarket entreprenurs into the organised sector.
“We are in the process of engaging with livelihood businesses of India, especially spare part retailers and garage mechanics and working with them to make them more competitive and stay in business, making them stay up-to-date with technology. We are encouraging the livelihood entrepreneurs to grow with us,” Dinesh added.
Elaborating about it, TASL executive director, G Srinivasa Raghavan, said, “It is a large market but completely fragmented by livelihood players. It becomes more challenging for the livelihood players to be a part of the organised sector. Seventy per cent of the expenditure is in the unorganised space, where there is no organised player to upskill the lives of these entreprenurs through technology, training and any other way where they can stay relevant and in addition to reglatory changes. It propelled us in 2011 to create an independent aftermarket platform keeping with the tradition of TVS and create a platform where these players will become part of organised sector.”
THE STRATEGY
“The first is the traditional distribution line where the entreprenurs would be brought into a more organised supply chain platform and can deliver the parts on the same day, working capital of the retailer would be brought down and they do not have to stock the parts for more months. TVS covers more than 20,000 retailers at present,” said Raghavan.
“Secondly, for the first time in India the company has come up with a catalogue that has more than 1.7 lakh schemes where the retailer would know the details of a part making the distribution based on technology. It has been taken online from offline,” said the executive director, adding that the third line is mobility service where TASL addresses more than 40,000 service calls a month.
TAMILNADU IMPORTANCE
Asked about the contribution of the State in India’s market, Srinivasa Raghavan said, “Tamilnadu contributes around 10 per cent to the aftermarket industry in India, therefore it is the largest market and in commercial vehicle, it has the highest density in India.”
“Therefore the demand from TN customers and maturity level is significatly higher when compared to other states. Since TVS group started from the State, our first obligation is make the model successful here. We have connected over 4,300 retailers and around 4,000 garages in the State,” he told News Today.
Mitsubishi Corporation senior vice-president, S Wakabayashi was also present.