Car and SUV manufacturers have agreed to offer discounts of 1.5 per cent of the ex-showroom price of a new car or Rs 20,000 whichever is lower, while truck manufacturers will offer discounts of up to 3 per cent with the launch of the Centre’s Vehicle Scrapping Policy, according to an official statement issued on Wednesday.

These Original Equipment Manufacturers (OEM) discounts are in addition to the scrap value provided by Registered Vehicle Scrapping Facilities (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, according to the statement of the Ministry of Road Transport and Highways.

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Car and SUV manufacturers including 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 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 months, said the statement issued by the Ministry of Road Transport and Highways.

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

Details of the scrapped vehicle have to 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, according to a statement issued by the Ministry of Road Transport and Highways.

Commercial Vehicle Manufacturers namely Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors and SML Isuzu, offered discounts 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 six 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 six months.

Discount to be offered to a person buying a vehicle against a Traded CD 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 CD for scrapping a commercial cargo vehicle with less than 3.5 tonne GVW.

This scheme may also be considered for buses and vans.

The Ministry of Road Transport and Highways has launched the Voluntary Vehicle Modernisation Program or Vehicle Scrapping Policy to create an ecosystem for phasing out unfit, polluting vehicles across the country through a network of RVSFs and Automated Testing Stations (ATS).

At present, there are over 60 RVSFs across 17 states and UTs and over 75 ATS’ across 12 states and UTs which are operational in the country while many more are in the pipeline.

Union Minister for Road Transport & Highways, Nitin Gadkari had a detailed interaction with a CEOs’ delegation from the Society of Indian Automobile Manufacturers on Tuesday to promote the scrapping of privately-owned commercial and passenger vehicles and replace the old polluting fleet with the less polluting newer fleet.

Reciprocating the interaction and recognising 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 CD (Scrappage Certificate).

Commercial Vehicle and Passenger Vehicle manufacturers have shown a willingness to offer discounts for a limited period of two years and one year respectively, the official statement said.

These discounts will further incentivise scrapping of end-of-life vehicles, thereby ensuring the plying of safer, cleaner and efficient vehicles on the roads, the statement added.