CIE Automotive India Ltd

Dear Shareholders,

As I look back at the year gone by, I am struck by a sense of d?j? vu. When we began 2024, we were looking forward to a global economy emerging steadier from an extended period of geopolitical uncertainties and conflicts, starting with the covid pandemic in 2020. But 2024 has flattered to deceive and uncertainties continue to dominate the headlines about the global automotive industry. 2025 promises to be no better, with the most powerful country in the world going through a leadership change.

The European automotive industry is facing challenges of rising costs, transition to Electric Vehicles (EVs) and competition from China. Renowned European auto makers announced plant closures in Europe that sent shock waves through the industry. While the medium-term demand situation in the Indian automotive market continues to be strong, there were some interesting twists & turns in 2024. The light vehicle market slowed down as the supply chain got overburdened with inventory even as there was a growth revival in the two wheeler market.

The automotive industry is faced with multifarious medium term challenges. The three most important are as follows. The transition to EVs is not happening as smoothly as predicted. Automotive customers are looking for more premium features and for better safety & comfort. The supply chain is being transformed by digitisation and Industry 4.0.

We strive to be future ready as many new opportunities and risks emerge in this changing environment. Our approach has been to optimally balance growth, investments and returns to actively manage the uncertainties surrounding these changes. The company continues to have a strong balance sheet, good cash flow and healthy margins.

I place on record my appreciation for the Board of Directors, for their counsel and support. I whole heartedly thank the employees of the Company for their tremendous contribution during the year. I am grateful to our customers for giving us an opportunity to be a partner in their growth.

On behalf of the team and myself, I thank you for your continued support and trust placed in us.

Yours Sincerely,

Dear Shareholders,

CIE Automotive India Ltd during the last calendar year, continued on its quest to become a world class automotive component company that delivers sustainable growth & profits. Our India business, for example, has achieved EBITDA margins that are quite close to CIE Automotive's global benchmarks.

Demand growth in the Indian automotive market moderated in 2024. After few years of high growth, the light vehicle market in India slowed down to low single digit growth. Tractors and trucks saw negative growth in 2024 though both segments are expected to recover in the coming year. The silver lining was the two wheeler segment which bounced back with double digit growth after posting lacklustre numbers over the past few years. The growth of our India business closely mirrored these market trends. After handsomely outgrowing the market in 2021, 2022 & the early part of 2023, our India business has largely followed the market after that. We expect to get back to being ahead of the market soon. We continue to be optimistic about the medium-term growth in the Indian automotive market. We will continue to invest in expanding capacity in India. The Electric Vehicle (EV) transition continued on a slow pace in India but there were some exciting new model launches in this space, especially by our anchor customers. The European automotive market began 2024 with a good first quarter but the growth trends turned negative in the second half of the year. The transition to Electric Vehicles (EV) is slowing even as pollution norms on internal combustion engine (ICE) vehicles are proposed to be made punitive. Add to this the challenge from dynamic Chinese EV companies. The European auto market is thus facing a prolonged medium-term uncertainty and a no growth scenario. With contrasting signals to contend with, European OEMs are cutting production and even contemplating the unprecedented response of shutting down plants. Our response is to optimise our operations and protect profit margins as much as possible, adapting our factories to the new volume scenario. Though EV penetration varies widely across regions and segments, we are focused on ensuring a smooth transition for the company. We have a comprehensive strategy to develop a range of products for EVs: shafts & gears for transmission; housings for motors & electronics; battery trays and parts for the cooling & auxiliary systems of batteries. The automotive industry continues to transform with vehicle buyers looking for more premium features. Factors such as safety, comfort & lightweighting standards are advancing rapidly. Further, the automotive supply chain is being transformed by digitisation and Industry 4.0. We positively look forward to these changes as they will inevitably throw up risks as well as opportunities for the company. I commend my team for continuously improving the operations of the company year on year. We are confident that we can utilise emerging opportunities and face future challenges with agility. Thank you for the continued trust reposed in us in these changing times.

Yours Sincerely,