CHENNAI: TVS Automobile Solutions Ltd, the after service business of TVS Group, has decided to hive off its existing roadside assistance (RSA) business and float a joint venture with UK-based Automobile Association (AA) in India.
The new joint venture, called TVS Auto Assist, is intended for India and the emerging market operations. TVS and AA will have 51:49 stake in the new company's equity respectively. “We have had a strong roadside assistance business in India for a while. The main reason for the JV is that we have our plans for expansion into the overseas markets and we had a choice. AA fits the bill perfectly,” said R Dinesh, director, TVS Automobile Solutions.
“The opportunity is huge. Right now there is only a B2B opportunity, but the B2C opportunity is so high that even if we were at Rs 1,000 crore in business size, we’d still have only a 40% market share,” said Dinesh.
The company will also provide its services to corporate customers, OEMs and insurance companies in India, West Asia, Africa and other emerging economies.
TVS Auto Assist will be doing the same thing that its predecessor was doing so far - provide break down services to all automobiles, including two wheelers, three wheelers, passenger cars, light commercial vehicles and commercial vehicles. However, the association with AA will bring on a few more upgrades. Customers of the company will be able to hail services over a digital platform that the AA has implemented in the UK and Europe.
The investment, from both companies, that will go into the JV will be Rs 100 crore over the next year. While the current size of the TVS RSA business is Rs 40 crore, the JV is expected to grow on the growing market to hit a business of Rs 500 crore within three years, said officials.
TVS Automobile Solutions, in existence since 2003, has a network of 4,000 service providers in 1,795 locations in the country servicing nearly 1 million customers. AA has around 15 million customers in the UK with a 40% market share.