TVS Automobile Solutions Ltd. (TASL) has formed a 51:49 joint venture (JV) with US based The Warranty Group (TWG) for extended warranty services. TVS-TWG will work with car makers and dealers to provide a number of warranty packages that include managing preventive, prepaid, comprehensive and annual maintenance programs. TVS has the knowledge of local conditions and TWG the technical know-how, with over five decades of business experience.
The JV would begin with an initial investment of around $four million. To start with, it has tied up with two OEMs and is likely to rope in a few more in the coming months. Normally, vehicle manufacturers offer warranty for three years; now TVS-TWG will provide warranty up to seven years, covering the initial warranty period and beyond. TWG has global experience in handling multiple clients with analytical tools to track the performance and reliability of parts; the JV now presents a unique opportunity for manufacturers to identify and improve product quality.
Sanjay Nigam, president, TASL, said “Due to extended warranty, customers are benefited with lower cost of ownership and higher resale value. On the other hand this will strengthen our relationship with OEMs and help them acquire new customers and improve customer loyalty.”
According to R Dinesh, director TASL, the JV would target to clock revenue of Rs100-150 crore in the next three years, and will also help expand their business into other Asian markets where they are currently operating. By joining hands with TWG, their technical capabilities and market solutions for innovative, customer focused warranty programs will be further enhanced.
TWG, a $two billion company, has a presence in 19 countries and offers services in 33, catering to all major OEMs. In India, the JV will target to cover about 50,000 passenger vehicles in the first year; and one million vehicles, including cars, commercial vehicles and off-road farm equipment, in the next five years.
