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Corporate Overview
Financial Statements
Statutory Reports
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72nd Annual Report 2016-17
companies to India either through joint arrangements with local
partners or through independently owned operations in India.
International competitors bring with them decades of international
experience, global scale, advanced technology and significant
financial resources. Consequently, domestic competition is likely to
further intensify in the future. There can be no assurance that the
Company will be able to implement the Company’s future strategies
in a way that will mitigate the effects of increased competition on
the Indian automotive industry.
Designing, manufacturing and selling vehicles is capital intensive
and requires substantial investments in manufacturing, machinery,
research and development, product design, engineering, technology
and marketing in order to meet both consumer preferences and
regulatory requirements. If competitors consolidate or enter into
other strategic agreements such as alliances, they may be able to
take better advantage of economies of scale. The Company believes
that competitors may be able to benefit from the cost savings
offered by consolidation or alliances, which could adversely affect
the Company’s competitiveness with respect to those competitors.
Competitors could use consolidation or alliances as a means of
enhancing their competitiveness (including through the acquisition
of technology), which could also materially adversely affect
Company’s business. Further the Company’s growth strategy relies on
the expansion of the Company’s operations in less mature markets
abroad, where the Company may face significant competition and
higher than expected costs to enter and establish themselves.
If the Company is unable to effectively implement or manage
the Company’s strategy, it’s operating results and financial
condition could be materially and adversely affected.
As part of its strategy, the Company may open new manufacturing,
research or engineering facilities, expand existing facilities, add
additional product lines or expand its businesses into new
geographical markets. There is a range of risks inherent in such
a strategy that could adversely affect its ability to achieve these
objectives, including, but not limited to, the potential disruption
of the Company’s business; the uncertainty that new product lines
will generate anticipated sales; the uncertainty that a new business
will achieve anticipated operating results; the diversion of resources
and management’s time; the cost reduction efforts, which may not
be successful; the difficulty of managing the operations of a larger
Company; and the difficulty of competing for growth opportunities
with companies having greater financial resources than the
Company has.
More specifically, the international businesses of the Company
face a range of risks and challenges, including, but not limited to,
the following: language barriers, cultural differences, difficulties in
staffing and managing overseas operations, inherent difficulties and
delays in contract enforcement and the collection of receivables
under the legal systems of foreign countries, the risk of non-tariff
barriers, regulatory and legal requirements affecting the Company’s
ability to enter newmarkets through joint ventures with local entities,
difficulties in obtaining regulatory approvals, environmental permits
and other similar types of governmental consents, difficulties in
negotiating effective contracts, obtaining the necessary facility sites
or marketing outlets or securing essential local financing, liquidity,
trade financing or cash management facilities, export and import
restrictions, multiple tax regimes (including regulations relating to
transfer pricing and withholding and other taxes on remittances and
other payments from subsidiaries), foreign investment restrictions,
foreign exchange controls and restrictions on repatriation of funds,
other restrictions on foreign trade or investment sanctions, and
the burdens of complying with a wide variety of foreign laws and
regulations. Furthermore, as part of global activities, the Company
may engage with third-party dealers and distributors, which the
Company do not control but which, nevertheless, take actions that
could have a material adverse impact on the Company’s reputation
and business; the Company cannot assure you that it will not be
held responsible for any activities undertaken by such dealers and
distributors. If the Company is unable to manage risks related to
its expansion and growth in other parts of the world and therefore
fail to establish a strong presence in those higher growth markets,
its business, results of operations and financial condition could be
adversely affected or its investments could be lost.
Furthermore, the Company is subject to risks associated with
growing its business through mergers and acquisitions. The
Company believes that its acquisitions provide it opportunities to
grow significantly in the global automobile markets by offering
premium brands and products. The Company’s acquisitions have
provided it with access to technology and additional capabilities
while also offering potential synergies. However, the scale, scope and
nature of the integration required in connection with its acquisitions
present significant challenges, and the Company may be unable to
integrate the relevant subsidiaries, divisions and facilities effectively
within its expected schedule. An acquisition may not meet its
expectations and the realization of the anticipated benefits may be
blocked, delayed or reduced as a result of numerous factors, some
of which are outside the Company’s control.