To focus on all inclusive approach to warranty business

The Warranty Group (TWG), a U.S.-based global specialist in offering extended warranty solutions to acquire and retain customers, is set to become a substantial majority shareholder in its joint venture (JV) with TVS Automobile Solutions Ltd. (TASL).

TVS-TWG was formed sometime in February, 2014 with TASL holding 51% and TWG the balance. The JV was formed with an initial equity capital of $4 million.

TWG, it is gathered, is keen to have a larger play in the Indian warranty space. Sources said the U.S. firm was eager to expand its presence by adopting an inclusive approach to warranty business in India. TASL, it is reliably learnt, has, hence, decided to let TWG take a dominant financial position in the JV.

If sources are to go by, TASL will substantially dilute its stake in the joint venture. Indications are that it could settle for a smaller holding in the company. The details of the new arrangement are still being worked out.

Warranty management

The JV was formed ostensibly to add a new service — extended warranty management — to the bouquet of services offered by TASL.

In July, 2015, TASL hived off its roadside assistance business into a separate 51:49 JV with The Automobile Association of the U.K. The JV with the U.K. firm is providing 24X7 road side assistance to two and four-wheelers.

Through MyTVS, TASL is providing multi-brand car service.