Efficiency Push
Auto cos to offer discounts on new vehicles on scrapping of old ones
This story was originally published at 23:09 IST on 27 August 2024
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MUMBAI – Several commercial and passenger vehicle manufacturers will start giving discounts to customers who purchase new vehicles after scrapping their older vehicles, according to Minister of Road Transport and Highways Nitin Gadkari.
"I am pleased to report that, in response to my recommendation, several commercial and passenger vehicle manufacturers have agreed to offer discounts for the purchase of new vehicles against the scrapping of older vehicles with a valid Certificate of Deposit," Gadkari said on social media platform X, after chairing a session of CEOs delegation of the Society of Indian Automobile Manufacturers in New Delhi today. "This initiative will significantly advance our circular economy efforts, ensuring that cleaner, safer, and more efficient vehicles are on our roads," he said.
"We have agreed to offer additional discounts which will be linked to the scrappage of old vehicles. For commercial vehicles, we have agreed to give an additional discount of 3%, for vehicles which are 3.5 tn and above. For vehicles which are below 3.5 tn the discount will be 1.5%," said Vinod Aggarwal, president of SIAM, told CNBC-TV18. Similarly, passenger vehicle manufacturers will offer a discount of 1.5% on a new car.
In 2022, the government introduced a Voluntary Vehicle-Fleet Modernization Program, or Vehicle Scrappage Policy, with the aim of phasing out unfit and polluting vehicles, and providing incentives for the same. The policy facilitated the setting up of necessary support infrastructure in the form of automated testing stations and registered vehicle scrapping facilities, making the scrappage industry organised.
On depositing the vehicle for scrapping at registered scrapping facilities, the vehicle owner gets a Certificate of Deposit, which is tradable. It can be used for registration fee waivers, road tax concessions, and discounts from automakers on the purchase of new vehicles. Currently, companies such as Tata Motors Ltd, Mahindra & Mahindra Ltd and Maruti Suzuki India Ltd have scrapping facilities in India. End
Reported by Darshan Nakhwa
Edited by Ashish Shirke
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