Several manufacturers of vehicles, both passenger and commercial, have decided to offer discounts on the purchase of new vehicles for a limited period against a certificate of deposit (scrappage certificate) of the old vehicles, an official statement said on Wednesday.

This move came with the launch of the Centre’s Vehicle Scrapping Policy or Voluntary Vehicle Modernisation Programme.

Union Minister for Road Transport and Highways Nitin Gadkari had a detailed interaction with a delegation of CEOs from the Society of Indian Automobile Manufacturers at Bharat Mandapam on Tuesday in the presence of the Ministers of State of Road Transport and Highways, Harsh Malhotra and Ajay Tamta, which was aimed to promote the scrapping of privately owned Commercial & Passenger Vehicles and replace the old polluting fleet with the less polluting newer fleet.

The government said these discounts would further incentivise the scrapping of End-of-Life Vehicles, thereby ensuring the plying of safer, cleaner and efficient vehicles on the roads.

The initiative will create an ecosystem for phasing out unfit polluting vehicles in the country through a network of Registered Vehicle Scrapping Facilities and Automated Testing Stations, the statement said.

Commercial Vehicle and Passenger Vehicle manufacturers have expressed their willingness to offer discounts for a limited period of two years and one year respectively.

Commercial Vehicle Manufacturers namely Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors and SML Isuzu, offered a discount equivalent to 3 per cent of the Ex-Showroom Price for a commercial cargo vehicle with more than 3.5 tonnes GVW scrapped by the Owner within last 6 months and a discount equivalent to 1.5 per cent of the Ex-Showroom Price for a commercial cargo vehicle with less than 3.5 tonnes GVW scrapped by the Owner within last 6 months.

The discount to be offered to a person buying a vehicle against a Traded Certificate of Deposit of a Scrapped Commercial Vehicle would be equivalent to 2.75 per cent of the Ex-Showroom Price for scrapping a commercial cargo vehicle with more than 3.5 tonnes GVW and a discount equivalent to 1.25 per cent of the Ex-Showroom Price against a Traded Certificate of Deposit for scrapping a commercial cargo vehicle with less than 3.5 tonnes GVW.

This scheme may also be considered for buses and vans.

Passenger Vehicle Manufacturers namely 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, offered discounts of 1.5 per cent of the ex-showroom price of new car or Rs 20,000, whichever is less, against the passenger vehicle scrapped by the owner in the last six (6) months. Details of the scrapped vehicle will be linked in the Vahan system. Companies may voluntarily offer additional discounts on identified models.

Individual passenger vehicle manufacturers may have the liberty to extend this discount only on the identified models, within their vehicle portfolio. As the car is not getting exchanged but only scrapped, hence between exchange and scrap discount, only scrappage discount will be applicable.

Mercedes Benz India has offered a flat discount of INR 25,000, which will be over and above all existing discounts.

These Original Equipment Manufacturers (OEM) discounts are in addition to the scrap value provided by RVSFs to the vehicle owners and existing incentives of Motor Vehicle tax concession, waiver of fee for issuance of certificate of registration and waiver of liabilities by the government of India under the Vehicle Scrapping Policy linked to the certificate of deposit (CD) on purchase of a new vehicle, applicable in many States.