annual-report-FY2021

Mahindra & Mahindra Limited (”M&M”) or (”Mahindra”) is the Flagship company of the Mahindra Group, which consists of diverse business interests across the globe. At Mahindra, we constantly push the boundaries of possibilities to create products and technology led services that enable our customers and stakeholders to Rise. By focussing on customer centricity, delivering accessible technology, innovation and enhancing people capabilities, we continue to drive growth in the domestic market while pursuing global expansion. In the Financial Year 2020-21, your Company sold 348,621 vehicles (a degrowth of 26.0% over the previous year) and 354,498 tractors (under the Mahindra, Swaraj and Trakstar brands, a growth of 17.4%over the previous year). Management Discussion and Analysis INDUSTRY STRUCTURE, OVERVIEW AND TRENDS Automotive Industry In CY2020, worldwide sales of Passenger Cars and Commercial Vehicles dropped to 77.9 million, a degrowth of 14.6% over the CY2019 sales of 91.3 million. Global Passenger car sales were down by 16.7% and commercial vehicle sales reported a degrowth of 9.6%. The COVID-19 pandemic had a swift and severe impact on the Global Auto Industry. The Global Auto Industry reported sales lowest since 2011. The long-term growth outlook for the Indian auto industry is positive, driven by robust economic growth outlook, increasing income levels, Government focus on road and infrastructure development, current low levels of vehicle penetration, rapid urbanisation and a large, young and aspiring population. While the long-term outlook for the Indian auto industry is promising, there has been some softening of demand for automobiles in the two-year period between F19 - F21, as compared to the previous ten-year period of F09 - F19. Exports from India too have slowed down in this period. 121 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2020-21 (Source: OICA - Organisation Internationale des Constructeurs d 'Automobiles) The global electric vehicle segment witnessed the fastest growth of 64% CAGR in the last four years. Annual global EV sales stand at 2 million which is 3.8% of total PV sales, as compared to just 0.4% five years back. The Automotive and Farm Sectors, along with their subsidiaries, associate companies, and joint ventures, achieved global sales of 0.73 million vehicles and tractors * (355,036 vehicles and 374,532 tractors), a degrowth of 8.4%over the previous year. TRACTORS 354,498 17.4% 8.1% 10.1% 8.3% 7.3% 8.9% -10.4% -24.9% -17.1% -22.7% -29.0% PV (Domestic Sales) CV (Domestic Sales) Domestic Sales (Excl. 2W) PV (Export) CV (Export) Segment CAGR F09-19 CAGR F19-F21 The softening of demand in the last three years is a result of tapering of GDP growth and increasing cost of ownership due to addition of multiple safety features and implementation of stricter emission norms during the last few years, which was further aggravated by lockdowns and loss of income due to COVID-19 in F21. The Indian auto industry is aware of the need for reducing dependence on imported oil, improving safety on the roads andmost importantly, the need for clean air. *Excluding SsangYong