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

22 New Regulations for Safety Ÿ Geared up and confident of meeting any new regulations introduced. Environment and Alternate Fuels Ÿ Actively pursuing development of the EV market, products, and technology. Ÿ Started operations at the latest manufacturing hub in Chakan, Pune which supplies EV components. Commodity Prices Ÿ Limited the impact of rise in commodity prices through concerted efforts towards cost reduction with initiatives including Value Analysis and Value Engineering activities. Capacity Ÿ Have built adequate manufacturing capacity for the immediate future. Ÿ A new plant being set up at Pithampur to manufacture farm equipment like rice transplanters, potato planters and harvesters. Ÿ Swaraj Division setting up a new manufacturing plant in Mohali to create additional capacity. In addition, there are risks like significant variations in monsoon and depletion in reservoir levels that we must address on a year-on-year basis. In addition to building a fortress to protect and sustain the positions in the domestic market, both Auto and Farm Sectors have ambitious plans to take India to the world through strong exports. OPPORTUNITIES & OUTLOOK The first half of F22 was influenced by the pandemic but still posted growth on the low base in F21. The second half saw good recovery given the economic conditions, but supply was restricted due to shortage of semiconductors. Also, a combination of sharp increase in commodity prices and fuel prices impacted the cost of ownership of passenger vehicles and commercial vehicles. Factors that may significantly impact demand for automobiles in F23 are: Ÿ Supply shortage of semiconductors. Ÿ Policies by the Government to boost consumption. Ÿ Aggressive Government push for infrastructure-led growth. Ÿ Increase in cost of ownership due to hikes in commodity and fuel prices. AUTOMOTIVE SECTOR FARM EQUIPMENT SECTOR The mid to long-term outlook for the Indian tractor industry is positive. The industry is seeing an upswing with the expectation of a bumper crop this Rabi season. Acreage of summer crop which is sown between Rabi and Kharif season has crossed last year's level. All these factors, combined with several initiatives taken by the Government, are driving up rural incomes. Demand for mechanisation is also growing as shortage of agricultural labour will lead to increase in labour cost. An increasing trend of more farmers seeking technical inputs in agriculture also reflects the growth of progressive farmers. For detailed information on the risks and opportunities, and outlook, please refer to the Management Discussion and Analysis section, page no. 107, in the Integrated Annual Report 2021-22. COMPANY OVERVIEW REIGNITED VALUE CREATION OUTPERFORM FINANCIALLY FUTURE-READY ESG LEADERSHIP GLOBALLY INPUT-OUTPUT MODEL CORPORATE INFORMATION STATUTORY REPORTS FINANCIAL STATEMENTS