Car and SUV manufacturers in India have announced new discounts under the Centre’s Vehicle Scrapping Policy, offering up to Rs 20,000 or 1.5% of the ex-showroom price on the purchase of a new car, whichever is lower. For truck buyers, the discount goes up to 3%, according to a statement by the Ministry of Road Transport and Highways released on Wednesday.
These discounts are in addition to the scrap value provided by Registered Vehicle Scrapping Facilities (RVSFs) and existing incentives, including Motor Vehicle Tax concessions, waiver of fees for the issuance of certificates of registration, and other government incentives linked to the Certificate of Deposit (CD) upon the purchase of a new vehicle.
Participating Manufacturers
Leading car manufacturers 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 are offering these discounts on new passenger vehicles. Notably, Mercedes Benz India is offering a flat discount of Rs 25,000, which will be applicable over and above any existing discounts.
The discounts apply to new vehicle purchases where the owner has scrapped a passenger vehicle within the last six months. The scrapped vehicle's details must be linked in the Vahan system to qualify for the discount. Manufacturers may also choose to offer additional discounts on specific models within their portfolio.
Commercial Vehicle Discounts
For commercial vehicles, manufacturers like Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors, and SML Isuzu are offering up to a 3% discount on new purchases. This applies to commercial cargo vehicles with a Gross Vehicle Weight (GVW) of more than 3.5 tonnes that have been scrapped by the owner within the last six months. For lighter commercial vehicles with less than 3.5 tonnes GVW, the discount is 1.5% of the ex-showroom price.
Additionally, for purchases against a Traded CD of a scrapped commercial vehicle, the discounts are set at 2.75% for vehicles with more than 3.5 tonnes GVW and 1.25% for those with less than 3.5 tonnes GVW. The scheme may also be extended to buses and vans.
The Vehicle Scrapping Policy
The Ministry of Road Transport and Highways introduced the Vehicle Scrapping Policy under the Voluntary Vehicle Modernisation Program to phase out unfit and polluting vehicles across India. The policy promotes the replacement of old, polluting vehicles with newer, more environmentally friendly ones through a network of RVSFs and Automated Testing Stations (ATS).
Currently, over 60 RVSFs are operational across 17 states and Union Territories, along with more than 75 ATS across 12 states and Union Territories, with more facilities in the pipeline.
Union Minister for Road Transport & Highways, Nitin Gadkari, emphasized the importance of fleet modernization and a circular economy during a recent interaction with the Society of Indian Automobile Manufacturers (SIAM). As a result, both commercial and passenger vehicle manufacturers have agreed to offer these limited-time discounts for two years and one year, respectively.
These incentives are aimed at encouraging the scrapping of end-of-life vehicles, leading to safer, cleaner, and more efficient vehicles on Indian roads.
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