TVS Motor on Saturday received an in-principle approval to demerge its two wheeler business with Mahabharat Motors Manufacturing company in West Bengal.
TVS, along with Prasoon Mukherjee-led Mahabharat Motors, will form Neo Strategic Motors and is likely to start production in January next year.
After the demerger, the company is likely to invest around R400 crore in the new venture. While the company is looking at producing 1,000 two-wheelers per month from January, it has also decided to increase the production to three lakh units per year in the next five years. According to TVS officials, the two wheeler market in the eastern region is around five lakh units at present. Apart from catering to the needs in the region, TVS has also planned to cater to Bangladeshi market.