29 Aug 2024
Automakers have agreed to offer discounts ranging from 1.5% to 3%, or up to ₹25,000. Moreover, this offer is available for customers who purchase new vehicles after scrapping their old ones. This announcement came after a recent meeting between automakers and Nitin Gadkari, the Minister of Road Transport and Highways. This initiative is a major step in promoting the recycling of old vehicles and reducing pollution on Indian roads.
Key Highlights of the Scrappage Scheme
Discounts for New Vehicles: Automakers like Maruti Suzuki, Tata Motors, Mahindra & Mahindra, and Hyundai are offering discounts of up to 1.5% or ₹20,000 on new passenger vehicles. This discount applies if an old vehicle is scrapped within the past six months.
Commercial Vehicle Discounts: Tata Motors, Volvo Eicher, Ashok Leyland, and Mahindra & Mahindra will offer a 3% discount on the ex-showroom price for cargo vehicles over 3.5 tonnes. This discount benefits larger commercial vehicles. Also, a discount of 2.75% will be offered for vehicles under 3.5 tonnes with a valid Certificate of Deposit.
State Government Rebates: Several state governments are offering additional financial incentives. They are providing rebates on road tax for recycled vehicles. Specifically, these rebates range from 25% to 30%. Consequently, this adds to the overall financial benefits for customers.
Strategic Push for Vehicle Recycling
This move is particularly timely as India pushes towards a cleaner environment. The initiative is aimed at encouraging vehicle owners to replace their old vehicles with newer, safer, and more efficient ones. Gadkari has been a strong advocate for this policy, urging automakers to provide incentives for customers who scrap their old vehicles. While some manufacturers were initially hesitant, the recent agreement marks a significant shift in the industry’s approach.
Official Statements Reflecting the Initiative
Nitin Gadkari expressed his satisfaction with the automakers' decision. He stated, “The collaboration with automobile manufacturers marks a significant step towards modernizing India’s vehicle fleet. This initiative will not only help reduce pollution but also promote safer and more efficient vehicles on our roads.”
Mercedes-Benz India, which had already announced a ₹25,000 discount for scrapped vehicles, emphasized the importance of this move. Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, mentioned, “Customers can now enjoy significant financial advantages when purchasing a new vehicle after scrapping their old one. This initiative aligns with our commitment to supporting the government's Circular Economy efforts.”
Automakers' Commitment to a Sustainable Future
The Ministry of Road Transport and Highways (MoRTH) highlighted that this program will run for a limited period. Commercial vehicle manufacturers will offer discounts for two years, while passenger vehicle discounts will be available for one year. Additionally, individual manufacturers have the flexibility to extend these discounts to specific models within their portfolios. With the active participation of automakers and support from the government, this program is set to play a significant role in advancing India’s energy-efficient goals.
A Promising Future for India’s Auto Industry
As India moves towards a more sustainable future, the scrappage scheme will likely encourage more consumers to replace their old vehicles with newer models. This initiative benefits the environment and offers substantial financial incentives to consumers. Consequently, it is expected to have a lasting impact on the Indian auto industry, helping it grow and adapt to the evolving needs of the market.
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