MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2021-22

The Government introduced Production Linked Incentive (PLI) Scheme for Automobile, Auto components, ACC (Advanced Chemistry Cells) and semiconductors to overcome the cost disabilities of the industry for manufacture of Advanced Automotive Technology products in India. The Government has recognised Electric Vehicle technology and Hydrogen fuel cell technology as an Advanced Automotive Technology in the country. In line with the strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited had reintroduced the iconic brand 'Jawa' to the Indian market in the Financial Year 2019, with the launch of new range of JAWA motorcycles - Jawa and Jawa Forty- Two. In FY22 another iconic brand 'Yezdi' has been re- introducedwith three newmodels at the same time - Yezdi Adventure, Yezdi Scrambler and Yezdi Roadster. Two-wheeler Business OPPORTUNITIES AND THREATS Automotive Sector The auto industry is an engine of economic growth. The industry contributes to 6.4% of India's GDP, almost 35% of manufacturing GDP, 15%of GST revenues, and provides 37 million direct and indirect jobs. F22 has shown a partial recovery from last-eleven-years low in F21. Industry is still down by 9% in passenger vehicles, 29% in commercial vehicles, 63% in three-wheelers and 36% in two-wheelers from all time peak in F19. Industry recovery was restricted by two COVID waves in F22 and semiconductor shortage of supply. The second COVIDwave during April-June was the most severe one while the third wave during December-January was a shorter one. Auto industry's fastest recovery opportunity was lost by the shortage of supply of semiconductors. Over the years, the industry has made signicant investments towards the indigenisation of technologies in the conventional vehicles space - meeting BS-VI in 3 years is an example. To reduce dependence on oil imports, the industry is exploring options of alternate fuels like CNG, LNG, Ethanol, etc. Industry is also exploring options of ex fuel vehicles in nearby future. The industry is also investing in next generation technologies like Electric Vehicles. PLI AUTO Ÿ Through PLI Auto and Auto components, the Government is o ering incentives of Rs. 26,058 crores. The Government has been successful in attracting proposed investment of Rs. 74,850 crores Ÿ PLI scheme is expected to result in incremental production of over around Rs. 2.3 lakh crore and additional employment opportunities of over around 7.5 lakh jobs To drive sustainable growth in the agriculture sector, strong Government focus on its development is required, including increased adoption of mechanisation and modern agricultural practices, and rural development at large. India, with its large base of small and marginal farmers, has several regions with low penetration of farm mechanisation. With increasing labour cost and labour scarcity, greater adoption of various forms of mechanisation is the way forward. In this scenario, the market for tractors and other farm equipment is expected to grow in the long term. Farm Equipment Sector The rising demand for power backup solutions and infrastructure development will create opportunities in the power generation and infrastructure equipment space. This is an opportunity for the Company to grow its offerings in power solutions and construction equipment. Allied businesses MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2021-22 119