"Reciprocating the interaction and recognizing the importance of Fleet Modernisation and Circular Economy, multiple Commercial and Passenger Vehicle Manufacturers have agreed to offer discounts for a limited period against a Certificate of Deposit (Scrappage Certificate)," Ministry officials stated. These discounts are designed to encourage the scrapping of end-of-life vehicles, ensuring safer, cleaner, and more efficient vehicles on the roads.
Push for commercial vehicles
Commercial vehicle manufacturers like Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors, and SML Isuzu have pledged discounts for new purchases when older vehicles are scrapped. Specifically, these manufacturers will offer a discount equivalent to 3% of the ex-showroom price for commercial cargo vehicles weighing more than 3.5 tonnes GVW scrapped within the last six months. For commercial cargo vehicles under 3.5 tonnes GVW, the discount will be 1.5% of the ex-showroom price.
Additionally, for those purchasing a new vehicle with a traded Certificate of Deposit of a scrapped commercial vehicle, a discount of 2.75% of the ex-showroom price will be provided for vehicles over 3.5 tonnes GVW. For vehicles under 3.5 tonnes GVW, the discount will be 1.25%. This scheme may also be extended to buses and vans, further promoting the scrapping of older commercial vehicles.
Initiatives by OEMs
Passenger vehicle manufacturers have also joined the initiative. Companies such as Maruti Suzuki India Ltd, Tata Motors, Mahindra & Mahindra, Hyundai Motor India, Kia Motors, Toyota Kirloskar Motor, Honda Cars, JSW MG Motor, Renault India, Nissan India, and Skoda Volkswagen India have offered discounts of 1.5% of the ex-showroom price of a new car or INR 20,000, whichever is less, for a passenger vehicle scrapped by the owner within the last six months. The details of these scrapped vehicles must be linked to the Vahan system.
"Individual Passenger Vehicle Manufacturer may have the liberty to extend this discount only on the identified models, within their vehicle portfolio," stated the manufacturers. While the scrappage discount will replace any exchange discounts, companies may voluntarily offer additional discounts on selected models.
Mercedes-Benz India is providing a flat discount of INR 25,000, which will be in addition to all existing discounts.
These manufacturer-offered discounts come on top of the scrap value given by RVSFs and existing incentives from the Government of India. These incentives include concessions on motor vehicle taxes, waivers of fees for issuing certificates of registration, and waivers of liabilities under the Vehicle Scrapping Policy linked to the certificate of deposit upon purchasing a new vehicle in many states.
This initiative spearheaded by the Ministry of Road Transport and Highways aims to create a sustainable ecosystem that promotes the phasing out of old, polluting vehicles and encourages the adoption of cleaner, more efficient ones. By offering financial incentives and collaborating with leading manufacturers, the program hopes to make a significant impact on vehicle pollution levels and road safety across India.
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