Indian Automobile sector welcomes Vehicle Scrappage Policy 2021-22

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All Indian leading automobile manufacturers are welcoming the new Vehicle Scrappage Policy to phase out unfit and old vehicles. The Finance Minister Nirmala Sitharaman, while announcing the voluntary Vehicle Scrappage Policy also said, “Vehicles would undergo fitness tests in automated fitness centers after 20 years in case of personal vehicles and after 15 years in case of commercial vehicles.”

According to the FM of India, the policy will help in encouraging fuel-efficient, environment-friendly vehicles, thereby reducing vehicular pollution and the oil import bill. Indian automobile manufacturers are happy and supporting this policy because according to them this will boost the demand for new vehicles and will also provide relief to the environment.

Vehicle Scrappage Policy

Kenichi Ayukawa, President, Society of Indian Automobile Manufacturers (SIAM), also the Managing director/CEO of Maruti Suzuki India Ltd. (MSIL) described the Budget and Voluntary Vehicle Scrappage Policy as “Visionary”.

Ayukawa said, “The government has adopted an expansionary stance with a trust of infrastructure building with measures for efficiency improvement and increasing competitiveness. Good macroeconomic growth will translate to good auto sector demand. Specifically, the vehicle Scrappage has good intent and the auto industry would keen to work with the government on suggestions for maximizing benefits to environment and society.”

While most of the auto manufacturers in India are in support of this policy, there are few who are still waiting to know the details of the policy. Shashank Srivastava, executive director, marketing & sales MSIL, said, “One has to see if the fitness certificate to be issued to such old vehicles is based on emissions or fitness or will it be based on both.” 

How Vehicle Scrappage Policy will help the Auto industry to recover from the Slowdown?

The Auto industry in India is going through a tough time for the past 2 years, the coronavirus pandemic is also one prime reason for the slowdown. The new Scrappage policy will boost the auto industry in the following two ways-

  • Vehicles will reach the service centers more often for regular fitness, service & maintenance.
  • The scrapping of old vehicles will boost the demand for new ones.
  • The FM of India announced the investment of 5.54 lakh crore to develop the infrastructure. This move will boost the sale of medium & heavy commercial vehicles (M&HCV).

Related: Why Automobile Industry in India is suffering from Slowdown?

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