Vehicle scrapping policy: ‘Indian automotive industry can now match international standards’

The Road Transport, Highways and MSMEs Minister said the policy will also lead to an increase in the country’s automobile industry turnover to Rs 10 lakh crore from the current Rs 4.5 lakh crore.

By:March 19, 2021 5:13 PM

Announced in the 2021-22 Union Budget, the new vehicle scrapping policy provides for fitness tests after 20 years for personal vehicles, while commercial vehicles would require it after the completion of 15 years. It will be a “win-win” policy that will eventually help in improving fuel efficiency and reduce pollution, says Union minister Nitin Gadkari. Making a statement regarding vehicle scrapping policy in the Lok Sabha, the Road Transport, Highways and MSMEs Minister said the policy will also lead to an increase in the country’s automobile industry turnover to Rs 10 lakh crore from the current Rs 4.5 lakh crore.

The auto industry has reacted to the policy with a welcome. Here’s what some of the OEMs have to say:

Venkatram Mamillapalle, Country CEO & Managing Director, Renault India Operations:

The announcement will bring the Indian automotive industry to match with the international standard, besides offering a much-needed reprieve for the Auto, Steel and Electronics industry, that was needing resuscitation after the onslaught of the pandemic. This move will ensure adoption of better technology on Indian roads thus significantly lowering carbon emissions for the country. Scrapping of older vehicles in a scientific and environment-friendly manner will help to reduce pollution and also make roads safer.

Satyakam Arya, Managing Director & CEO, Daimler India Commercial Vehicles (DICV):

DICV has long advocated for a well-designed, incentivized ‘end of life’ policy that boosts demand, improves safety, and supports the environment by encouraging CV owners to exchange their older vehicles for new ones, meeting current emissions norms. Only a joint effort by government, industry and the customer can result in a scrappage policy that offers true safety, economic and environmental benefits.

Also read: Nitin Gadkari announces Vehicle Scrappage Policy: Benefits, discounts, incentives explained

Industry body SIAM also welcomed the policy, highlighting that the most important step is to build an infrastructure of testing and scrapping centers fast all over the country and SIAM will work on this front with the government. Mandatory scrapping of +15 year old Government vehicles from 1st April 2022 is a step in the right direction.

SIAM will also engage with the Ministry of Road Transport & Highways and work together on the scheme in greater detail on issues like :

– The best way to expedite testing infrastructure in a sustainable and scalable manner.

– The possibility of starting the fitness testing much earlier in the life cycle of the private vehicle, as is done in developed countries.

– The scope of mandatory fitness-based de-registration vs voluntary incentive/disincentive based scrapping.

– Incentives for encouraging scrappage.

Vinkesh Gulati, President – Federation of Automobile Dealers Associations (FADA):

Scrappage value of vehicle in range of 4-6% of the ex-showroom price, rebate of upto 25% for PV and 15% for CV by State Governments on Road Tax, 5% discount from OEM’s on new vehicle and registration fee being waived off will definitely help to excite the customer and motivate him to scrap his old vehicle. It will also revive the ailing CV segment and in turn will boost State exchequer’s revenue on sale of new vehicles.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, 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