TVS aims to create a “sustained dominant game” in the electric vehicle segment by leveraging various government initiatives such as production linked incentive schemes. As per its annual report for 2021-22, the company has strong plans to up its game in the electric segment.
“PLI (Production-Linked Incentive) and FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) initiatives will be fully leveraged by the company and will strategically create a sustained dominant play in this segment,” it said.
This industry is fast growing and the company has 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.
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 on the back of new product launches and economic activity picking up pace.
“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.” Report 2021-22.
The domestic mopeds and economy motorcycle segments have performed poorly recently and are likely to return to growth, with some buoyancy expected in the rural agro-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 this segment will see significant demand from students, working women and the wider replacement segment is likely to outperform with the reopening of offices as well as schools, colleges.
Besides, two wheeler exports are also likely to witness a growth during the year due to strong demand for the company’s products and its operations in various geographies, which mitigates the overall risk.
“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.
Elaborating on the challenges that could hamper growth, the company said that growth in demand is highly dependent on improving consumer sentiment.
“The improvement in sentiment has not yet fully recovered to pre-COVID levels and is impacted by inflation, especially led by energy and food, and any significant adverse developments in the COVID situation Maybe,” it said.
It added that the monsoon still meets most of the irrigation needs of Indian agriculture, and any deviation from the forecast of a normal monsoon would significantly impact rural markets.
Apart from this, further increase in prices due to increase in additional commodity cost could adversely affect demand, TVS said.
It cautioned, “There is less scope for further hike in prices in the lower and middle segment of the market. Lower than projected GDP growth and/or consequent job growth may adversely impact domestic demand.”
During the year ended March 2022, the company’s total two-wheeler and three-wheeler sales including international trade grew by 8 per cent to 33.10 lakh units as against 30.52 lakh units in FY 2020-21.