Weak Off-Highway Market
Off-highway market particularly in India has been weak with production declining further in Q3. Given high market share in this segment, differential gear and assembly sales have been materially impacted.
SONACOMS / Q3-FY24 / risks
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Material risks this quarter
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EV Two-Wheeler Market Disruption
Aggressive discounting by EV two-wheeler companies has temporarily disrupted the market and affected customer sales, impacting traction motor sales in Q3. Management expects this to continue for a few months but believes it is unsustainable beyond that.
Red Sea Crisis Impact on Operations
While current impact is negligible, prolonged crisis could lead to adverse effects due to longer shipping times (10-20-30 days), higher freight costs, and increased inventories. Europe deliveries most affected.
India Market Weakness and Volatility
Indian market is mixed across segments—passenger vehicles 'decent but not very plus', commercial vehicles expected to decline in 2024, and off-highway weakening further. India identified as the weakest of the three key markets.