Investor Presentaiton
the regulatory push to meet the deadlines on phasing out the internal
combustion engines.
Improvement in component supplies, consumer demand and new launches
helped the Indian auto industry to improve volumes in financial year 2023.
Industry had a good festive season with 2 million vehicles retailed in October,
2022, a nearly 50% growth over previous year. The industry reflected the
overall trend in the economy where demand for the higher end of the product
range is stronger than mass selling categories. Auto Industry was impacted by
muted demand in its biggest export markets for 2 wheelers and 3 wheelers due
to economic crisis in these markets.
The overall Medium and Heavy Commercial Vehicle (M&HCV) production
increased by about 35% over 2021-22. Haulage and tippers segment saw
robust growth during the year. The bus segment grew by almost three times
with public transport recovering post Covid. Many state transport undertakings
(STU) added Electric buses into their fleet for mainly city operations. 2023-24
should be a good year for the category with all segments expected to grow.
Increased commercial activities is expected to positively impact the tipper
and haulage segment. The push towards higher axle load vehicles is likely to
continue. The bus segment should also get the benefit of the vehicle scrappage
policy that is to be implemented during the year. The industry will continue to
work on initiatives to meet the various regulatory requirements expected to be
implemented during the year.
The passenger vehicle production has seen a growth of 25% in the year ended
March, 2023 and the domestic car sales also recorded the highest ever sale in
a financial year. The segment continued to witness preference for Sports Utility
Vehicles (SUVs) and this is now the largest selling segment with a share of
52%. Despite price increases, a mix of improved chip supply, higher incomes
and pent-up demand, especially for SUVS supported this sales. Though the
supply bottlenecks have eased, there are still some challenges on components
like semiconductor chips that are expected to continue for some more time.
The waiting period for many car models have come down, with improvement
in supply and inventory. From April 2023, the Phase 2 of the BS6 regulation
and RDE (Real Drive Emission) requirements will come into effect which may
impact the price of new vehicle. The shift to electric vehicle has intensified in
2022-23 with demand for EV coming from both big and small towns and also
from rural areas.
Two wheeler production has seen a revival in the current year with a growth of
close to 12% after 3 consecutive years of decline. In motorcycles, the growth
has been fueled by domestic sales. Exports have declined because of various
internal issues in some of the key markets. Scooter continues to be more of
a domestic phenomenon with negligible exports. Electric vehicles business
especially in the scooter segment made significant gains during the year. The
subsidies under the FAME 2 scheme of the Government continues to ensure
that these vehicles are price competitive. Companies also seem to be investing
in developing the charging infrastructure. We continue to be a preferred choice
of fitment of Original Equipment Manufacturer ("OEMS") in most of the new
launches. During the year, we have also further strengthened our after market
portfolio with new products both in the motorcycle and scooter segment.
Tractor production in financial year 2023 has shown a substantial increase of
11% and touched one million tractors for the first time. Various Government
schemes and a better monsoon helped the tractor industry to register a robust
growth during financial year 2023. Even though the IMD predicts a hotter
climate during 2023-24, a healthy water reservoir level should ensure enough
water for agriculture and good start to financial year 2024.
Growth in the automobile industry and replacement demand enabled Tyre
industry to show a healthy growth in financial year 2023. However, export
performance was muted considering the slowdown in the world markets.
Higher volumes and price hikes taken by the Industry helped to maintain
margins for the industry in financial year 2023.
Product wise Performance
During fiscal 2022-23, your company achieved a total income of *22826 crores.
There was an overall increase of 8% in tyre production in financial year 2023, with
all product groups showing growth. In the Heavy Commercial Vehicle product
group, there was an increase of 7% over the previous year while Light Commercial
Vehicle Tyres increased by around 2%. Small Commercial Vehicle tyres increased
by 14%. Passenger & SUV showed a growth of 13%. The Farm product group grew
by 9%. The Motorcycle and Scooter product group increased by 2% and 16%
respectively. The Off the Road ("OTR") product group grew by 11%.
Exports
Exports business for the year 2022-23 was muted due to unexpected headwinds
seen in Indonesia & Bangladesh and a few countries of Africa. Although exports
revenue grew by only 5% in 2022-23, there were substantial growth in a few
strong markets.
Export turnover for the year 2022-23 was *1866 crores as against 1779 crores
in the previous year.
Our key markets of Bangladesh and Indonesia saw unforseen headwinds
which impacted the total revenue for the year. The unprecedented forex crisis
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