Car, truck scrappage policy to boost sales, lower pollution: Scrappage yards already in construction

The scrappage policy might put a cap on the life of the vehicle as 15 years, thereby ensuring that new lesser-polluting trucks with higher standard safety features are purchased.

By:Updated: May 05, 2020 11:17 AM

The Union Ministry for road, transport and highways, last year had given its nod to the scrappage policy for old vehicles. The auto industry welcomed it with open arms. At present, due to this pandemic, the final implementation is pending. Few automakers like Maruti Suzuki along with Toyota have started setting up their scrappage centre in India. Mahindra already has one. The commercial vehicle segment too seems in favour of this decision. Recently, Tata Motors was quoted as saying that they will want this to be implemented as soon as possible. This will result in cleaner-running vehicles and drive demand for new trucks. A specific timeframe for the scrappage should also be kept. For example, beyond 15 years the truck cannot be re-registered and has to be scrapped. Tata Motors was further quoted as saying that the appropriate tools required to scrap a truck should be in place. More such centres will also be welcome as it will reduce the load on an existing couple of such centres.

The Tata spokesperson for commercial vehicles said 

A well-defined and effective scrappage policy is one of the key imperatives for driving demand of cleaner BSVI vehicles and more appropriately so, in the current scenario of shrinking demand across end-use sectors. Replacement demand will remain the key driver for the sale of new vehicles, especially during the current year. Therefore, a policy with a clear definition of ELVs (End of Life Vehicles) and financial incentives would achieve two possible objectives – create demand for cleaner BSVI vehicles, while also curbing pollution levels. The Government’s proposed renewal of fitness certificates for vehicles older than 15 years every six months, instead of the current time frame of one year, is a welcome one.

We envisage the new draft policy will drive fleet modernisation in India, but it needs to define tangible incentives for customers, as well as regulatory norms for enforcing the disposal. In India, scrappage value chain is in the early stages and is only able to process lower double-digit percentage of the total ELVs available on road. India will need multiple environmental-friendly scrappage centres across the country to cater to the local needs of each region. Current setups, which are limited to few clusters, cater to the local needs and are devoid of the capacity to scrap total ELVs on the road. The draft policy also needs to address the criteria to define dismantlers and a mechanism to ensure adherence.

Ashok Leyland too is with Tata Motors on this one. Vipin Sondhi, MD and CEO at Ashok Leyland said that as it is the CV sector has been struggling and now due to the pandemic, it has come to nought. He further elaborated that commercial vehicles are responsible for carrying essential as well as other goods. The demand for these vehicles should definitely increase. To trigger this, an incentive-based scheme for commercial vehicles should be put in place. There should also be rebates for new vehicle registration and on other factors like GST and road tax.

Satyakam Arya, CEO of Daimler India Commercial Vehicles exclusively told Express Drives

Scrappage policy has to be looked at with a historical and more holistic purpose. In India, we never had an organised way to scrap vehicles. They simply move from 1st to the 2nd to the 3rd owner and from metros to smaller cities and towns. And whatever gets scrapped is handled in a very unprofessional and unorganised way. Its high time that India defines a proper way to deal with end-of-life of automobiles with professional setups to handle that include IT systems in the backbone and principles of recycling and reuse.

Apart from that, scrappage policy will enable to take off more polluting and less fuel-efficient vehicles from the roads thereby reducing the pollution and import bill of crude oil. Looking at the severe crisis Indian CV industry has been going through since 2019, which is now expected to even worsen with Covid crisis, a scrappage policy based on incentives could act as a catalyst to generate fresh demand which the industry badly needs at this moment. With Indian auto industry ready with BSVI it is also the best timing to replace old BSIII and BSIV trucks with BSVI since the gain on clean emissions is multifold and phenomenal (10-12 trucks of BSVI produce same NOx and particulate matter as 1 BSIII).

The final result here will be a reduction in pollution. As is evident, the truck community usually runs its vehicles for more than 15 years. We are aware that the older the vehicle, the more polluting it will be. The aim is to get these polluting trucks off the road. To compensate the freight companies for this, an incentive-based scrappage scheme should be implemented. This will help reduce pollution as well as encourage sales in a huge fashion. Moreover, the new vehicles come with increased comfort, more safety features, and longer service duration.


With inputs from PTI

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Latest Auto News