Text: Bhargav TS
Chennai-based aftermarket service provider TVS Automobile Solutions (TVS ASL) to spread its wings across the globe by joining hands with The Automobile Association(AA) of UK. It has announced that it would hive off its Roadside Assistance business (RSA) to form a new joint venture (JV) company TVS Auto Assist (India) with AA. TVS ASL will have a 51% stake and AA with the remaining balance in TVS Auto Assist (India) to offer breakdown services to customers. Apart from breakdown services it will also expand operations with OEMs, insurance companies and corporate customers in India, emerging markets in Asia, the Middle East and Africa.
The Director of TVS ASL Dinesh said, “We will get best practices and global access through this JV and will also focus on emerging markets like Middle East, Asia and Africa. We will be starting operations in those countries to tap the immense potential of aftermarket service. To start with, the JV would set up its first office in the Middle-East in Dubai or Jedda in the coming months and would run the business through both owned and franchisee service outlets as in India and the UK.”
Currently for TVS ASL the RSA business contributes around Rs 40 crore and with the formation of this new JV it is targeting a business of Rs 1000 crore over the next 3-5 years – both in India and abroad. So far the JV has invested Rs 100 crore and both partners will invest further for future expansion. TVS ASL has presence across India covering 1,795 locations and 28 states with a network of over 4,000 authorised service providers. Citing a reason for forming this JV, Dinesh said, “In India we could manage on our own, but for emerging markets, we need partner like AA. Moreover in India the presence of multinational auto OEMs are increasing, therefore this JV can provide similar service experience to multinational automobile brands present in India as well as in other overseas markets. To start with, we will cater B2B and it will provide breakdown assistance services to all automobiles ranging from two-wheelers, three-wheelers, passenger cars, light commercial vehicles and commercial vehicles. With vehicles sales expected to increase significantly in India, there is a real opportunity for this JV to cater B2C market as well,” said Dinesh.
The company also feels that it has become necessary for OEMs to have strong third-party service providers like TVS ASL, as they will find it difficult to service customers across the country. Apart from providing quality RSA to OEMs in India, it can also offer range of products, including insurance, extended warranty, private label parts & PartSmart, analytics solutions and garages. AA has an over 40% market share in the UK and over 15 million customers in the RSA business. The company attended to 3.5 million customers in the UK in 2014, contributing 10,000 customer services per day. It offers a variety of products and value added services besides its RSA services that include insurance and driving services. Bob Mackenzie, Executive Chairman, AA, said, “We are entering the Indian market at a time when its automobile growth is set to take off and are confident of the JV with TVS. We will bring our global expertise to the roadside assistance business, which we expect to transform into a holistic business centre to customer.”
