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How I see the upcoming Year, outlook on 2022

The new normal has set unique challenges for the industry. The biggest challenge is to sustain business operations and ensure the financial health of the organisation and its stakeholders. With the industry having exhibited resilience over the last two years, we are looking towards 2022 with cautious optimism.

Currently, the domestic market is witnessing increased demand, but is also impacted by the global semiconductor shortage. The situation will remain fluidic in 2022 due to unpredictable factors – Covis-19, global semiconductor shortage, freight cost and multiple other cost implications. We are constantly monitoring these factors and aligning our operations to capitalise the best output.

MG Motor India is committed to meeting the high demand from its customers and is investing to enhance the plant capacity to reduce the waiting time further. The company is trying to meet the growing demand and working towards strengthening the MG family in India. 

Summing up the demand, trends during 2021 and expectations for 2022

In retrospection - the beginning of the financial year 2021-22, gradually started to show the positive effect of the phased unlocking of the economy post lockdown. This brought a significant increase in enquiries and bookings. The recently launched Astor, along with Hector, ZS EV and Gloster, continue to attract strong customer interest and remain the vehicle of choice for the customers in their respective segments. 

We are seeing signs of positive consumer sentiment due to pent-up demand and expect the demand to increase with the turn of the year. We have witnessed a year-to-date growth of 56% with retail of 37,723 units (Jan-Nov ‘21) over 24,152 units sold in the same period last year.

However, the production levels are currently impacted and will remain so in the next Quarter due to the global shortage of semiconductor chips.

Our plans to bring to market affordable EVs

Ever since we started our journey in India in 2018, we have been delivering a seamless experience to our discerning customers and adding immense value to our stakeholders. Driven by our vision of CASE (Connected, Autonomous, Shared, and Electric) mobility, we bring to the table cutting-edge augmented experiences across-the-board within the automobile vertical. We have introduced several ‘firsts’ to the Indian automotive industry with the first Internet SUV – MG Hector, first Pure Electric Internet SUV – MG ZS EV, and first Autonomous (Level 1) Premium SUV – MG Gloster.

We brought to India our second car, MG ZS EV, based on the global popular platform from our home country, UK. ZS EV continues to attract customers in India as we average 700 bookings per month. ZS EV’s success in the market marks the beginning of a truly collaborative ecosystem building approach to electric vehicles in India. In our endeavour to broaden access to wider customer segments, we will bring to the country the second EV, encouraged by the Government’s clarity on its EV roadmap. We are aligned to play our part in seeing that the direction meets reality sooner rather than later. 

We have also led a 5-way charging ecosystem including free-of-cost AC fast-charger at residences/offices, portable in-car charging cable, DC superfast charging stations at dealerships, 24x7 charge-on-the-go facility (in 5 cities), and charging stations in satellite cities and tourist hubs.

At MG, we are also mindful, and take a longterm view of our EV operations, by addressing the issues of battery-life and recycling. There are various players that we work with in the field of battery recycling such as Umicore and TES AMM. There are more opportunities in the second life and after-life usage for lithium-ion batteries as well.

The new EV, which will be a futuristic car, will be brought to the Indian market in the next financial year. Based on the global platform, the new EV will be developed & expected to be priced between Rs. 10 lakhs to Rs. 15 lakhs addressing the mass segment. 

The car will be customised to meet the Indian regulations. Further, to meet the Government’s guidelines for the production linked (PLI) scheme, we will undertake maximum possible localisation, which would include battery assembly and other parts. With all these initiatives in place, we expect EVs to contribute to over 20% to our overall sales in next 2 years.

Addressing the semiconductor shortage issue

New-age cars, equipped with advanced telematics, run on chips and semiconductors, for which there are few suppliers, and only some of the countries control a major share of global production and supplies. The COVID restrictions phase impacted semiconductor production, which in turn disturbed the supply chain dynamics across industries with high degree of automation and technology integration. Subsequent lockdowns across the globe resulted in the shutting down of major chip-making facilitiaes in countries like Japan, South Korea, Europe and US, which ultimately led to a chip shortage and the beginning of domino effects. 

The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as driver-assist systems, navigation and hybrid-electric systems.

With the usage of technology going up and the advent of IoT and 5G in India, the demand for semiconductor chips is increasing. With our Digital First approach - our products leverage technology to provide high-speed in-car connectivity and IoT solutions, which enable MG customers to access real-time connectivity, infotainment, and telematics. Hence, we have been impacted by this chip-shortage.

However, we are working towards fulfilling our delivery commitments to customers and expect supplies to optimise by the first Quarter in the coming year.

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