Automobile manufacturers, dealers hail Centre's newly announced vehicle scrappage policy

The Federation of Automobile Dealers Associations (FADA) and the Society of Indian Automobile Manufacturers (SIAM) have welcomed the Centre's newly announced vehicle scrappage policy and have called the move a step in the right direction.

Vinkesh Gulati, president of the Federation of Automobile Dealers Associations (FADA) said that it was now upto state governments and original equipment manufacturers (EOMs) now have to do their part to make it a success.

"Indian automobile industry has already upgraded to one of the most advanced emission standards. While new vehicles will be least polluting, vehicles that are old create enormous pollution with the least safety standards and will now be eligible for scrappage thus making roads safer and air cleaner. The guidelines and advice announced today are in the right direction and now, the State Governments and OEMs have to do their part to make it a success," he said.

He further said that incentives will motivate customers to scrap old vehicles.

"The scrappage value of a vehicle in the range of 4 to 6 per cent of the ex-showroom price, a rebate of up to 25 per cent for PV and 15 per cent for CV by State Governments on Road Tax, 5 per cent discount from OEMs on new vehicle and registration fee being waived off will definitely help excite customers and motivate them to scrap old vehicles," he said.

He added, "It will also revive the ailing CV segment and in turn will boost State exchequer's revenue on the sale of new vehicles."

In a statement, SIAM also lauded the move saying, "The benefits to the environment and safety of a sound system of removing unsafe or unfit vehicles from the road have been felt strongly by all stakeholders. The most important step is to build an infrastructure of testing and scrapping centers fast all over the country and SIAM will work on this front with the government."

It further extended its support and said that it will engage with the Ministry of Road Transport and Highways to work together on the scheme on issues like expediting testing infrastructure in a sustainable and scalable manner and incentives to encourage scrappage.

Earlier in the day, Union Road Transport and Highways Minister Nitin Gadkari announced the vehicle scrappage policy in Lok Sabha.

"In case of failure to get a fitness certificate, commercial vehicles will be de-registered after 15 years. Private vehicles will be de-registered after 20 years if found unfit or in case of a failure to renew registration certificates," the Minister had said.

He added that under the new policy, owners of old vehicles will get strong incentives to scrap old and unfit vehicles.

( With inputs from ANI )