The Government of India (GoI) has approved E-Vehicle policy to promote India as a manufacturing destination so that e-vehicles with the latest technology can be manufactured in the country. Last year, the GoI 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 GoI has recognised Electric Vehicle technology and Hydrogen fuel cell technology as an Advanced Automotive Technology in the country. TWO-WHEELER SEGMENT OPPORTUNITIES AND THREATS AUTOMOTIVE SECTOR Indian automotive industry has been christened as sunrise sector and champion industry, due to the immense contribution the industry makes to the Indian economy. Automotive industry turnover is 6.5% of India's GDP and more than 40% of manufacturing GDP. In Financial Year 2023-24, Passenger vehicles have reached a new, highest-ever mark with 4.2 million sales units while commercial vehicles have shown flat growth of 0.6%. 3W reported growth of 41.5% with 0.7 million sales in FY 2023-24 vs 0.5 million sales in FY 2022-23. The shortage of semiconductors post-COVID-19 was eased with normalised global supply in the last year, while the increase in demand was influenced by higher disposable income, credit availability, new launches and minor impact due to regulations. To reduce the dependence on oil imports, the industry is exploring options of alternate fuels like CNG, LNG, Ethanol, etc. The industry is also exploring options of flex fuel vehicles in nearby future. The industry is also investing in next generation technologies like Electric Vehicles and hydrogen. Robust government support has spurred uptake in farm mechanisation and contemporary farming techniques, alongside broader rural development efforts. India which has a substantial base of small and marginal farmers, grapple with numerous areas characterized by limited penetration of farm mechanisation. As labor scarcity persists, escalating labor costs, widespread adoption of diverse mechanization methods emerge as the way forward. Considering these circumstances, the trajectory of the tractor and farm machinery market is anticipated to exhibit long-term growth. 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 RISKS AND CONCERNS AUTOMOTIVE AND FARM EQUIPMENT SECTORS The Company's business is exposed to many internal and external risks and it has consequently put in place robust systems and processes, along with appropriate review mechanisms to actively monitor, manage and mitigate these risks. COMPETITIVE INTENSITY Given the high growth potential of the Indian automotive market, all OEMs, homegrown as well as MNCs, have a presence across all vehicle segments in India. 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 a shift in demand from cars to UVs. This resulted in a greater number of launches in UVs compared to cars. 157 MANAGEMENT DISCUSSION AND ANALYSIS In line with the strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited had re-introduced the iconic brands 'Jawa' and 'Yezdi' to the Indian market in the Financial Year 2019 and 2022 respectively. During Financial Year 2022-23, 42 Bobber was introduced and during Financial Year 2023-24, Jawa 350 was introduced to the Indian market. In addition, the Company forayed into new international markets through iconic British brand BSA in UK and European market. The volumes for Financial Year 2023-24 were impacted with delays in launching improved products and subdued marketing spends in the Domestic market. Export volumes fell owing to slowdown in the UK/European economies and the Russia-Ukraine conflicts, impacting demand sentiments. However, with the funding tied-up for next level of growth and new external investors coming on board, focus for 2 will FY 20 4-25 be on Product improvements, Dealer developments, Network expansion, Cost reductions to grow the volumes multi- and fold in FY 2024-25 and ahead.
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