The seventh edition of Mahindra Transport Excellence Awards reflected on industry performance and vehicle end-of-life.

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Anirudh Raheja

Honouring the unsung heroes of the Indian road transport ecosystem, the seventh edition of the Mahindra Transport Excellence Awards turned out to be bigger and better. Marking the inclusion of SCV, LCV and ICV stakeholders, the awards were supported by the Ministry of Road Transport and Highways. Seeking the diligence of over 50 jury members, the awards, expressed Anand Mahindra, Executive Chairman, Mahindra & Mahindra Ltd., are gaining in stature and prestige. The awards ceremony, held on March 07, 2018, at Delhi, beginning with a panel discussion on the commercial vehicles ‘end-of-life’ in India. The panelists comprised of Y.S. Malik, Secretary, Ministry of Road Transport and Highways, Prof. G. Raghuram, Director, IIM Bangalore, Rakesh Batra, Partner, Automotive Practice, EY and Vinod Sahay, CEO, Mahindra Truck and Bus and Construction Equipment Division. Kicking off the discussion, Y S Malik, highlighting certain statistics, stated that there are close to four million BSI, BSII and BSIII CVs on Indian roads. “Looking at the overall gains, whether it is an individual operating that vehicle or a manufacturer, there has to be a win-win situation for all, and in the case of fuel consumption as well as emission norms,” expressed Malik. Sharing an anecdote, he drew attention to a handwritten letter to the prime minister by the daughter of a truck driver who owned a 15-year-old truck. The letter, said Malik, contained a query about the government’s plan to scrap old CVs since their livelihood depended on it. In the letter, Mentioned Malik, the girl expressed fear about her and her sister losing out on education since their father will not be able to pay the fees.

Social angle to CV scrappage

Of the opinion that the 12 or 15-year cut-off date for CVs is debatable, Malik stressed upon the operating economics of the truck owners in relation to the vehicle end-of-life. Malik also drew attention to the unorganised nature of the scrapping industry in India, and how it is damaging to the environment. “It has to grow and we need to see how we can incentivise it. We also need to see what best value the scrap industry could give, and what benefits CV OEMs are ready to provide in response to a surge in manufacturing and sales,” explained Malik. Highlighting high level of variance in the way CVs are utilised in India, Prof. G. Raghuram, Director, IIM Bangalore, spoke about the need to consider the contribution of this industry to the Indian economy, and the role it is playing when determining the parameters that define an end-of-vehicle life policy. Echoing the sentiments of Malik, Prof. Raghuram expressed the need to study how the scrappage industry is operating in other markets of the world. “If there is any law, it has to be on the scrapping industry, and on how a vehicle has to be scrapped. There are various elements like metals, rubber, and plastics that are involved,” he mentioned. Scrappage of vehicles in advanced countries is largely voluntary rather than mandatory, expressed Raghuram. He said that there is a need to look at the level of public cost involved in the process.

Of the opinion that scrappage could be mandated if a vehicle has gone below a certain standard, Prof. Raghuram averred that the surrogate ideally should be the performance of the vehicle and the pollution it is causing. Stressing upon the different types of fleet owners in India comprising of single truck owners, new players, small and big fleets, Rakesh Batra, expressed a need to have a holistic approach to the issue of scrappage. “The entire value chain needs to be looked at. We need to start from POV of customers so that they do not face disruption due to the introduction of such policies, which may also invite a price hike,” he said. Pointing at the introduction of BSIV emission norms that led to customers paying higher prices, Batra mentioned that there was a need for companies to recycle vehicles that have reached the end of their life. Not many enterprises are coming up since the task is capital intensive and energy-hungry, Batra stated. He drew attention towards plants that need to be well located, and are supplied with enough vehicles.

OEM perspective

Stressing upon serious disruptions that can take place due to immediate pullout of vehicles from the road, Vinod Sahay mentioned that many stakeholders are involved in the ecosystem. “Price hike may happen for the non-impacted vehicles and also increased freight hike due to the lesser supply of trucks,” said Sahay. He averred that truck owners should be encouraged to move to newer models to curb environmental damage on transferable credit. “There is a possibility to work around this as some countries have already adopted such a practice,” said Sahay. Expressing that it is workable and will not cause much disruption, Sahay stated that the voluntary route to vehicle replacement will be better. Sahay also underlined the role of OEMs, drivers and road-side mechanics as important stakeholders in the industry, and how their livelihood depends on older trucks. Stating that any incentive has to be pooled-in by OEMs, government and the scrappage industry, Malik opined, “The best solution would be to get OEMs to setup scrappage plants since they know how to extract the best value.”

Following the discussion, Dr. Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd., from the audience row, participated by stating the onus of setting up scrappage centers could be put on the OEMs, to think of it being conducted as a charity move will not help. It has to be a business proposition, and OEMs should see a benefit in it. Goenka urged that there was a need to set up such an infrastructure before coming out with a policy. “There is a need for the OEMs to create a business model that is successful and sustainable,” said Goenka. Prof. Raghuram expressed that organised shredding has a huge commercial potential, and the policy will energise it. “In India, we have a lot of energy for recycling. My worry, therefore, would be to determine the parameters on which to determine end-of-life,” he said.

The awards

The seventh edition of the Mahindra Transport Excellence Awards attracted 8848 nominations from 3722 fleet owners across India. Of these, 144 nominations were shortlisted for the expert jury round. A new category for customised application builder for SCVs and LCVs was introduced. For the driver jury, 237 nominations were received from the HCV and ICV segments. Of the 237 nominations, 10 were shortlisted based on a rigorous process that including the vetting of their knowledge regarding traffic rules, psychometric & psychomotor test, medical check-up, followed by jury screening. The Mahindra Saarthi Abhiyaan under which the MTEA gives scholarships to a girl child of a truck driver, over 1300 entries were received. This year, the ‘Come Home Papa’ short story contest on the theme of road safety based on the father’s experience on road elicited a good response.

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