MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2022-23

India remains a medium-to-high HP tractor market, with over 80 per cent of sales coming from the 30-50 HP categories. The revised emission norms - TREM IV applicable only to tractor over 50 HP from January 2023, have impacted around 7-8 per cent of the overall industry volumes. To meet the challenges associated with TREM IV, your Company has realigned its product portfolio, through the launch of new products, along with upgrades of existing ones. 125 COMPETITIVE INTENSITY Keeping in mind the high growth potential of the Indian automotive market, all OEMs, homegrown as well as MNCs, have presence across all vehicle segments. Today, multinational OEMs are deeply entrenched in the Indian market with local development centres, a strong local supplier base and good channel penetration. In the PV segment, the differentiation between cars and UVs is largely blurred. The industry has seen shift in demand from cars to UVs. This has led tomore number of launches in UVs compared with cars. In F23, every second passenger vehicle sold was utility vehicle. 1 million UV sales were crossed in F20 and it took just 3 years to cross 2 million mark annual sales. LCV Goods < 3.5T now accounts for 55% of total CV sales in F23 vs 51% in F19 and 44% in F16. Industry < 3.5T has recovered to F19 level driven by 2-3.5T sales. The industry has crossed 5 lakh mark after 4 years. With the aim to remain competitive in the market and sustain its leadership position, your Company continues to invest in new product development, technology upgradations, increasing channel reach, while focussing on delivering customer centric products, services and brand building. TAX REGULATIONS India has traditionally seen tax rate differential between small and large passenger vehicles. This differential is based on length of the vehicle, engine size and fuel type. While the flagship products of your Company attract higher tax rates, your Company has strengthened the UV product portfolio attracting lower tax rates with products like XUV300, Bolero Neo, Bolero Power Plus, Thar and KUV100. XUV400 attracts minimumGST among all passenger vehicle categories. NEW EMISSION NORMS The Company has successfully transitioned to BS6 phase 2 emission norms across all its portfolio products well in time. In its commitment to improve fuel eff iciency and reduce the overall carbon footprint (CAFÉ 2), the Company has adopted advanced combustion technologies and right product level electrif ication strategy. In India, the emission standards for tractors and construction equipment are regulated separately from the broader automobile industry. NEW REGULATION FOR SAFETY Concerns over road safety are driving legislation and regulatory reforms. Any new legislation requires technology development and incurs costs, in turn impacting vehicle prices. Your Company is geared up and is conf ident of meeting any new regulations introduced. NEW PRODUCTS AND TECHNOLOGIES Your Company has a comprehensive programme for development of new products and technologies which will enable it to remain competitive in the market, cater to emerging customer expectations and meet any legislative requirements. Along with Electrif ication, your Company is also working on alternate fuels technology. ENVIRONMENT AND ALTERNATE FUELS With concerns over air quality and the need to reduce dependence on fossil fuels, the Government is actively pursuing large scale adoption of EVs, especially for intracity uses in fleet application. Your Company is a pioneer for Electric Vehicles in India and is actively pursuing development of the Electric Vehicle (EV) market, products and technology. Along with Electrif ication, your Company is also working on alternate fuels technology. MONSOON A normal monsoon is important for both agriculture as well as the rural economy at large. 2 million sales