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Auto Industry to Work with Central Government to Create Scrappage Centres, Vehicle Testing Infra: SIAM

Representative image

Representative image

Auto industry body SIAM hailed the vehicle scrappage policy and said it will work with the government towards creating the infrastructure for vehicle testing as well as scrappage centres.

Auto industry body SIAM on Thursday hailed the vehicle scrappage policy and said it will work with the government towards creating the infrastructure for vehicle testing as well as scrappage centres all over the country. The industry body said the benefits to the environment and safety of a sound system of removing unsafe or unfit vehicles from the road have been felt strongly by all stakeholders. “The most important step is to build an infrastructure of testing and scrapping centres fast all over the country and SIAM will work on this front with the government,” the Society of Indian Automobile Manufacturers (SIAM) said in a statement.

The mandatory scrapping of over 15-year-old government vehicles from April 2022 is a step in the right direction, SIAM added. Earlier in the day, Union Minister Nitin Gadkari said in Parliament that under the government’s vehicle scrapping policy, about 5 per cent rebate on new cars would be offered to buyers on scrapping of old vehicles.

He termed it a “win-win” policy that will help improve fuel efficiency and reduce pollution. SIAM said it would 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. It would also look at the possibility of starting the fitness testing much earlier in the life cycle of the private vehicle, as is done in developed countries, he added.

The industry would also engage with the government regarding the scope of mandatory fitness-based de-registration versus voluntary incentive/disincentive based scrapping, SIAM said. A Tata Motors spokesperson said the proposed scrappage policy is a step in right direction to promote safer and cleaner vehicles in the country. Provisions in the policy such as compulsory fitness certificate, dis-incentivising re-registration of commercial vehicles after 15 years and private vehicle after 20 years, would encourage the removal of old and polluting vehicles from the system, the spokesperson added.

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“We are optimistic and look forward to seeing how various provisions of this policy encourage consumers to voluntarily come forward and scrap their old and unfit vehicles,” the spokesperson said. Federation of Automobile Dealers Associations (FADA) President Vinkesh Gulati said the scrappage policy guidelines were in the right direction and now it is up to the state Governments and OEMs to join hands to make it a success.

“Scrappage value of vehicle in range of 4-6 per cent of the ex-showroom price, rebate of up to 25 per cent for passenger vehicles and 15 per cent for commercial vehicles by state governments, a 5 per cent discount from OEM’s on a new vehicle and registration fee being waived off will definitely help to excite the customer and make him scrap his old vehicle,” he added. The policy would also help in reviving the ailing commercial vehicle segment, Gulati noted.

CII Director General Chandrajit Banerjee said the voluntary vehicle-fleet modernisation programme is a very major initiative from the Government which would help in phasing out the polluting and unfit vehicles. “This has been a major request from the industry for the last few years. It will help reduce air pollution and also improve overall fuel efficiency, which could go a long way in meeting the climate action commitments,” he added. In addition, the policy will pave the way for the creation of an ecosystem of vehicular scrapping facilities and a market for recycled raw materials which would, in turn, create jobs and provide cost-effective raw materials for industry, Banerjee noted.

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Deloitte India Partner and Automotive Leader Rajeev Singh said the announcement is a good mix of both – incentives for those who opt to scrap their old vehicles and an additional burden for those who would like to continue with their old vehicles. “This fine balance should help in driving old vehicles out of road leading to a reduction in pollution levels and driving demand for new vehicles across all the segments.,” he added.