TVS Automobile Solutions (TVS ASL), India’s leading automobile aftermarket service provider and part of the multi-billion-dollar TVS group, on Wednesday announced that it has decided to hive off its roadside assistance business (RSA) to form a 51:49 joint venture with Automobile Association (AA), a leading breakdown coverage provider in the UK as well as in Europe.
The new joint venture — TVS Auto Assist India — will be headquartered in Chennai and primarily tap the roadside service market in India. Given the increased presence of multinational auto OEMs and their rapid expansion, coupled with the projection of India becoming the third largest auto market by 2020, this joint venture would help the company spread its wings abroad, particularly in the neighbouring countries, said R Dinesh, director, TVS Automobile Solutions.
“The move would mark the coming together of two market leaders to enhance the service offering and capabilities to tap the market opportunities not only in India but also other emerging markets — Asia, Middle East and Africa. We will be starting operations in those countries to tap the immense potential of aftermarket service,” he said.
The JV would set up its first office in the Middle-East in Dubai/Jetta in the near future and would run the business through both owned and franchisee service outlets as in India and the UK, Dinesh said. “We are targeting a business of Rs 1,000 crore over the next 3-5 years – both in India and abroad,” he added. The JV would have an initial capital base of Rs 100 crore and both partners will invest in it.
Dinesh added: “It has become necessary for auto OEMs to have strong third-party service providers like us as they will find it difficult to service customers across the country. Being a trusted brand in India, TVS Automobile can not only provide quality roadside assistance to OEMs customers in India but offer range of products, including insurance, extended warranty, private label parts & PartSmart, analytics solutions and garages.”
