Auto dealers in the country said that State governments across India should quickly implement the Centre’s Scrappage Policy so that older vehicles can be scrapped to get the incentives, which in return help them sell more vehicles.
“We feel that the State governments have to probably start working harder at this because most of the States have not implemented the policy, have not made it clear and whenever it is also implemented, there is no single window system in terms of ease of starting up these centres...these centers need to be started off in the nook and corner of India,” CS Vigneshwar, President, Federation of Automobile Dealers Associations (FADA), told businessline.
The Vehicle Scrappage Policy is part of Centre’s broader efforts to reduce air pollution and boost the automobile sector, which started in April 2022. The policy requires passenger and commercial vehicles older than 15 years to pass a “fitness and emissions test” to keep their registration. Vehicles failing the mandatory test are defined as end-of-life vehicles, lose their registration certificate and are recommended to be scrapped.
The policy also include incentives to scrap old vehicles, including discounts on the purchase of new vehicles against a scrappage certificate. For instance, customers buying a new personal vehicle after scrapping old ones can avail of a concession in new vehicle price or road tax of up to 25 per cent and commercial vehicles, the concession is 15 per cent.
The government has also advised auto manufacturers to provide 5 per cent discount on purchase of new vehicle against the certificate of deposit. States such as Bihar, Madhya Pradesh, Uttar Pradesh, Haryana, Karnataka, Maharashtra, Gujarat, Punjab and Kerala have announced concessions.
In September, government had also said that it was working on a policy for scrappage of vehicles to be based on pollution and not on the age of the automobiles, which could be a boon for many customers who have kept their vehicles in good condition.
Speaking at the annual convention of Society of Indian Automobile Manufacturers (SIAM), Anurag Jain, Secretary, Ministry of Road Transport & Highways had also asked the automobile industry to help the government in designing the programme of pollution checks and make it “trustworthy”.
“People tell us that if they’ve maintained their vehicle well, why should they be mandated to scrap it? We are studying whether we can enforce a scrapping mandate where the upper limit is relative to the pollution of the vehicle, for example, pre-BS-1 or pre-BS-2, instead of the 15-year mandate,” Jain said.
Meanwhile, in terms of current sales trends, Vigneshwar of FADA said that the next couple of months are going to be strong in terms of retail because of the festive season concluding, but the marriage season starting off and having a strong marriage season would also mean that the retails are going to go up.