TVS Motor Company said it aims to create a “sustained dominant game” in the electric vehicle (EV) segment by leveraging various government initiatives such as a production linked incentive scheme.
As per its annual report for 2021-22, the company plans to up its game in the electric segment.
The company will fully take advantage of the PLI (Production-Linked Incentive) and FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) initiatives of the government. [to] Strategically build a consistent dominant game in this segment,” it said.
The industry was about to grow rapidly and the company had ‘strong’ plans for this segment.
“In addition, with the strategic collaboration with BMW, the company will explore joint design and development of urban EV options for global markets,” said TVS Motor Company.
The company has created a dedicated vertical for the EV segment with over 600 engineers and has adopted ‘Centers of Competency (COCs)’ with an ‘agile work approach’.
TVS sold over 10,000 electric vehicles in 2021-22.
Overall, the company said it expects the industry to outperform the industry in terms of sales growth due to new product introductions and pick-up in economic activity.
“Owing to the strong product line-up, unwavering focus on consumer, quality, cost and strong new launches, the company is confident of outperforming the industry despite global challenges and tough business environment.” Annual Report for 2021-22.
The domestic moped and economy motorcycle segments had performed poorly recently and were likely to return to growth, with some bounce expected in the rural, agri-based markets.
With significant improvement in the urban markets across India, the company said that it is positive about the performance of the scooter segment. The company said the segment will see significant demand from students and working women and the wider replacement segment is likely to outperform with the reopening of offices as well as schools and colleges.
Besides, two wheeler exports were also expected to witness a growth during the year due to strong demand for the company’s products. The company’s operations in diverse geographies, which mitigated the overall risk, were also expected to contribute to this calculation.
“Certain geographic regions, which are dependent on agriculture and have crude oil surpluses, will act as a hedge against countries that may face adverse impacts due to higher fuel and food prices,” the company said.
On the challenges, the company said growth in demand was highly dependent on improving consumer sentiment.
“The sentiment has not yet fully recovered to pre-Covid levels and could be impacted by any significant adverse developments in inflation, especially energy- and food-based, and the COVID situation,” the statement said. “
It added that the monsoon continued to meet most of the irrigation needs of Indian agriculture and any deviation from the forecast of a normal monsoon would significantly impact rural markets.
Besides, further increase in prices due to rise in additional commodity cost may adversely impact demand, TVS Motor said.
“The low and middle segment of the market is [little] Headroom for further price hikes. Less than projected GDP growth and/or resultant job growth [impact] Domestic demand may be adversely impacted,” it cautioned.
During the year ended March 2022, the company’s total two-wheeler and three-wheeler sales, including international trade, grew 8% to 33.1 lakh units as compared to 30.52 lakh units in 2020-21.