The industry reaction to the scrappage policy announcement has been interesting and insightful.

Story by Team CV
Post the announcement of the scrappage policy by the transport minister Nitin Gadkari reactions and opinions have emerged from different strates of the sociaty at large, and the auto industry along with its various stakeholders and observers. Expressed Vinutaa S, Assistant Vice President & Sector Head, ICRA Ltd., that the scrappage policy will be positive for the auto components industry. It will benefit the auto components industry from higher demand for new vehicles from FY2024 onwards (with three to four per cent upside) owing to a favourable incentive structure, more than offset the loss of revenues from the aftermarket business, which may be pegged at three to five per cent because of part scrapping of vehicles undergoing the fitness test, she added. Satyakam Arya, Managing Director & CEO, Daimler India Commercial Vehicles, mentioned that his company has been long advocating for a well-designed, incentivised ‘end of life’ policy that would boost demand, improve safety and support 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,” he averred.

Saurav Kumar, Founder and CEO, Euler Motors, stated that the scrappage policy is an incremental step towards the Government’s continued thrust on emission control and sustainable mobility. “It will provide an opportunity to boost demand for energy efficient vehicles and curb pollution,” he added. Of the opinion that measures to impose a green cess and exempting vehicles running on environment friendly technology would augur well for EVs, Kumar said that the policy, once effective, will pave way for newer vehicle technologies in segments like intra city logistics, which relies on commercial vehicles. Vinkesh Gulati, President, Federation of Automobile Dealers Associations (FADA), expressed that the guidelines and advice announced (in the scrappage policy) are in the right direction. Of the opinion that the state governments and OEMs have to do their part to ensure success, Gulati drew attention to the some of the key points like the scrappage value of vehicle to be in range of four to six per cent of the ex-showroom price; a rebate of upto 25 per cent for passenger vehicle and 15 per cent for a commercial vehicle by state governments on road tax, and a five per cen discount from an OEM on a new vehicle and registration fee being waived off. Deepak MV, CEO & Co-founder, Etrio, averred that the policy will improve fuel efficiency, whereas recycling will reduce the cost of components for the automobile industry.