annual-report-FY2021

122 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS Over the years, the industry has made signicant investments in indigenisation of technologies in the conventional vehicles space e.g. meeting BS-VI in 3 years. The industry is also investing in next generation technologies like electric vehicles. Furthermore, with the objective of maximising local value addition and building competitiveness of the Indian industry, the Government has announced the Phased Manufacturing Plan (PMP). The Indian auto industry is making the necessary investments and is focussed on building capabilities in the EV space. As a result, the industry volume of Passenger Vehicles and Commercial Vehicles have fallen back to the level in F15 and F10 respectively. However, the silver lining was the Utility Vehicles segment, which witnessed a growth of 12.1%during the year. This growth in UV is driven by increased customer preference for UV styled vehicles and a shift from compact cars to compact UVs (less than 4 m length). In the last two years (F20 - F21), there were 18 new launches in the UV segment, and these accounted for 26% of UV volume in F20. For the year F21, compact UVs accounted for 51% of UV volume. The Government has announced the FAME II (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) policy. In nancial year 2020-21, Indian auto industry sales (excluding twowheelers) dropped to just 3.50million from the record high of 5.09 million in 2018-2019 and reported degrowth of 15.3% over 2019-20. The degrowth can be witnessedacross almost all segments of the industry. Automotive Industry in FY 2021 Ÿ A weak consumer sentiment emanating from the general slowdown in economic growth and constrained Government spending in F21. Ÿ Pandemic induced lock-down impact in H1F21. While the consumer demand started picking up in H2F21, the volume was impacted by shortage of automotive components including global shortage of electronic components. Ÿ Increase in vehicle prices due to implementation of new emission and safety norms combined with sharp increase in commodity prices. Over the ten years between F11 and F21, the Utility Vehicle (UV) segment has witnessed good growth of 12.9% CAGR. UV, as share of PV, has increased from 12.6% in F11 to 39.1% in F21. We believe that electric vehicle adoption in India would be led by e-3W; the key drivers being improving operating economies, easy deployment for last/first mile connectivity (including at metro stations) and the growth of start-ups as 3W aggregators. For the year F21, a total of 6,715 e-3Wwere sold, accounting for 3.1% of the 3W industry. The deep slowdown in automobi les was principally a result of: