Now earn from your old vehicle: Scrappage policy to be in effect from March 2020

The vehicle scrappage policy is in its final stages and an announcement is expected later this month, with the auto industry waiting with bated breath

By:Published: February 9, 2020 1:55 PM

The auto industry has been waiting for this for sure. The vehicle scrappage policy that was welcomed by SIAM late last year and which has been waiting for an approval is now almost there. 15 days to be precise. Nitin Gadkari, the union minister for road, transport and highways confirmed this at the FADA annual summit on the sidelines of the Auto Expo 2020. An impetus, Gadkari added, is that the Kandla port in India could be used as a base to get in old vehicles from outside India and scrap them here. This, he says, will reduce our dependence for metals and at the same time will also ensure recycling of materials.

To give a brief, the vehicle scrappage policy lists that vehicles shouldn’t be re-registered after they have done their 15-year term. These vehicles have to be scrapped at authorised outlets, something that also involves incentives. For example, if you take the scrappage receipt to a new car showroom, then the manufacturer is bound to give you some amount of rebate. Mahindra has already set up one such centre in India whereas Toyota-Suzuki have announced their intent to open a similar facility in Gujarat soon.

Rajan Wadhera, president of SIAM confirmed that Mahindra and Mahindra will be setting up many more such authorised scrappage centres in India by 2022. This will be a shot in the arm for the policy as well. Take your old vehicle in to the designated centre and then come out with a certificate. New vehicle sales will also be promoted in a big fashion due to this. Used car sales might also go up in the process but then the prices will also hit a low.

By 2020, India will have more than 30 million old or used vehicles. These vehicles are end-of-life units and hence will be more polluting than fresh cars that are expected to replace them. Not only this, one sees many unused old vehicles on the roadside gathering dust. It is expected that the owners will be penalised if they don’t scrap them or start using. Similarly, even two- and three-wheelers too will have to be scrapped.

Abroad, users usually scrap their vehicle within 5-6 years of usage. In the sense, these vehicles are barely used and as good as new when thrown into the scrap machines. In short, the parts as well as bits are used for other vehicles thereby enabling proper recycling and less dependence on earth metals. India, it seems will likely toe a similar line in the future. As of now, the countdown begins for the vehicle scrappage policy announcement.

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