Developing Scrappage Eco-system in India

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Indian government while actively tracking development in automotive space, has introduces quite many new rules and advance technology processes to improve vehicle quality making them both road worthy & less polluting.

It is understood that, scrapping a vehicle involves not only shredding of parts but also setting up a mechanism that can, in an environmental-friendly manner, dispose of the scrap which includes segregation of metals, non-metals, rubber, and other materials.

Each one of these materials undergoes predefined recycle method, which implies that Scrappage policy can only be implemented only after setting up an eco-system wherein polluting and old vehicles can be duly collected and transferred to authorized dismantling facilities. These facilities would then safely and environment-friendly dispose the old scrap, recovering the reusable metals and materials that can go back into the production-cycle, which will also relieve India of unnecessary imports.

This Voluntary Vehicle Modernization Programme (V-VMP) or the Scrappage programme announced by the transport ministry can boost Commercial Vehicle (CV) sales by a cumulative 65 per cent between fiscals 2018 and 2020.

"The V-VMP scheme can also lead to incremental sales of 4.4lakh CVs (primarily MHCVs) worth Rs 66,000crore, a cumulative growth of 65 per cent during this three-year period". -Crisil Report.

If this scheme gets implemented which most probably will, over 2lakh CVs would get scrapped and replaced in the normal course through the three fiscals, given the current junking rate of around 67,000 units annually. Therefore the total vehicles opting for the scheme will be 6.4lakh.

Sales of medium and heavy trucks will face the increment of over 85% because of their lifespan of 20 years. But, pick-ups, upper light CVs and MHCV buses, which have a lower lifespan of 15-17 years, will have a smaller share in vehicles being scrapped.

 Government will also consider the fact that Transporters scrapping old CVs will not be the buyers of new CVs, since their business is viable using only an older truck. Considering this government may provide a cash discount to those who will be junking old vehicles or make the V-VMP incentive certificate issued to transporters tradable.

You May Also Read - Indian Automobile Industry Expected To Grow FourFold, Thanks To The Automobile Scrapping Policy

A cap on the engine cubic capacity stating the difference between scrapped and new CVs bought under the scheme will be considered by the Government.  Alternatively, the government may provide different incentives, based on engine cc of new CVs bought versus that of the old one scrapped or offer lower benefit for higher differential in engine cc.

Government is efficiently taking all the steps to make today a better tomorrow. SAMIL as a whole with its core values will play its part while providing used vehicles under these schemes to its customers in good quality, that too at minimal prices.  To register all you have to do is click the link below. 

Link - https://goo.gl/TRchZK