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

MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2022-23 Both the Auto and Farm Sectors aim to safeguard and support their positions in the local market while also striving to expand India's presence globally by means of robust exports. Meanwhile, our efforts remain dedicated to attaining cost leadership by emphasising targeted cost optimisation, enhancing productivity, implementing value engineering, managing the supply chain eff iciently, and capitalising on synergies among different group enterprises. OPPORTUNITIES & OUTLOOK AUTOMOTIVE SECTOR In F23, the Indian auto industry showed double digit growth across all segments. Passenger vehicles have reached new highest ever mark with 3.89 million sales units while commercial vehicles are still below F19 levels by 4.5%. Factors that may signif icantly impact demand for automobiles in F23 are: l Supply shortage of semiconductors in f irst half of F23 l Policies by the Government to boost consumption l Aggressive Government push for infrastructure-led growth l Increase in cost of ownership due to hikes in commodity and fuel prices As per the Automotive Mission Plan 2026 (AMP 2026), the mid to long-term outlook for the Indian auto industry is positive. FARM EQUIPMENT SECTOR The mid to long-term outlook for the Indian tractor industry is positive. Several initiatives taken by the Government are driving higher rural incomes. This includes higher diversif ication towards high value crops and agriculture accelerator fund to promote technological advancement in agriculture, etc. In addition, increase in allocation of Government budgets on infrastructure and rural development is likely to benef it commercial demand. 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, in the Integrated Annual Report 2022-23. 20