TVS Motor Company said it aimed to build a ‘sustained dominant play’ in the electric vehicle (EV) segment by leveraging various government initiatives such as production-linked incentive scheme.
As per its annual report for 2021-22, the company has made plans to scale up its play in the electric segment.
“The PLI (Production-Linked Incentive) and FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) initiatives of the government will be fully leveraged by the company [to] strategically build a sustained dominant play in this segment,” it said.
The industry was slated to grow rapidly and the company had ‘robust’ plans for the segment, it added.
“In addition, with the strategic association with BMW, the company will be exploring the joint design and development of urban EV options for the global markets,” TVS Motor Company stated.
The company has created a dedicated vertical for EV segment with more than 600 engineers and adopted ‘Centres of Competency (COCs)‘ with an ‘agile working approach’.
TVS sold more than 10,000 EVs in 2021-22.
Overall, the company said it expected to outperform the industry in terms of sales growth on the back of new product introductions and economic activity regaining pace.
“Due to the strong product line-up, unwavering focus on consumer, quality, cost and the strong new launches, the company is confident about outperforming the industry, in spite of the global challenges and a tough business environment,” it said in the annual report for 2021-22.
The domestic moped and economy motorcycle segments had lately underperformed and were likely to return to growth, with some buoyancy expected in rural, agriculture-led markets, it added.
With considerable improvement in urban markets across India, the company said it was positive about the performance of the scooter segment. This segment would see significant demand from students and working women, and the broader replacement segment was likely to perform better in line with the re-opening of school and colleges along with offices, the company said.
Besides, two wheeler exports were also likely to witness growth during the year, fuelled by strong demand for the company’s products. The company’s operations in diverse geographies that mitigated overall risk were also expected to contribute on this count.
“Some of the geographies, which are agriculture dependent and have surplus of crude oil, will act as a hedge against the countries which may face adverse impact due to high fuel and food prices,” the company stated.
On challenges, the company noted that demand growth was highly dependent on improvement in consumer sentiment.
“Sentiment is yet to fully recover to pre-Covid levels and could be impacted by inflation, especially energy- and food-led, and any significant adverse development in the Covid situation,” it said.
Monsoon continued to cater to the majority of irrigation needs of Indian agriculture, and any deviation from the predicted normal monsoon would impact rural markets significantly, it added.
Besides, any further price increases due to additional commodity cost escalation could adversely impact demand, TVS Motor noted.
“The low and mid segment of the market have [little] headroom for further price increases. Less than projected GDP growth and/or consequent jobs growth [impact] could adversely impact domestic demand,” it cautioned.
During the year ended March 2022, the company’s overall two- and three-wheeler sales, including international business, grew 8% at 33.1 lakh units compared with 30.52 lakh units in 2020-21.
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