Automakers to give discounts on new vehicles against scrapping old ones: Gadkari

Several commercial vehicle and passenger vehicle makers will start giving discounts to consumers who purchase new vehicles after scrapping their old vehicles, according to the Minister for Road Transport and Highways Nitin Gadkari. Automakers will give discounts in the range of 1.5% to 3% on new vehicles against scrapping of older ones.

“I am pleased to report that, in response to my recommendation, several commercial and passenger vehicle manufacturers have agreed to offer discounts for the purchase of new vehicles against the scrapping of older vehicles with a valid Certificate of Deposit,” he said on X today.

Gadkari’s social media post came after chairing a delegation of CEOs of the Society of Indian Automobile Manufacturers today in Delhi. “This initiative will significantly advance our circular economy efforts, ensuring that cleaner, safer, and more efficient vehicles are on our roads,” he noted.

In 20222, the government introduced the Voluntary Vehicle-Fleet Modernisation Programme, or Vehicle Scrapping Policy, to support vehicle scrapping through incentives and infrastructure in the form of automated testing stations and registered vehicle scrapping facilities (RVSFs). Currently, there are over 60 RVSFs and over 75 automated testing stations across 17 states and union territories in the country.

On depositing the vehicle for scrapping at registered scrapping facilities, the vehicle owner gets a Certificate of Deposit, which is tradable. It can be used for multiple benefits, such as registration fee waivers, road tax concessions, and discounts from automakers on the purchase of new vehicles.

The policy has notified state governments to offer a concession on motor vehicle tax of up to 25% for non-transport vehicles, and up to 15% on transport vehicles.

Around 21 states and union territories have announced concessions in the motor vehicle tax on a vehicle that is bought against a CD while 18 states have announced waiver in pending liabilities on the vehicles offered for scrapping at RVSFs.

At the time of launching the policy, the government had advised manufacturers to provide a discount of 5% on the purchase of new vehicles against the scrapping certificate.

Commercial vehicle makers that are now providing discounts include Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors and SML Isuzu. Passenger vehicle companies include Maruti Suzuki, Tata Motors, M&M, Hyundai, Kia, Toyota, Honda Cars, JSW MG Motor, Renault, Nissan, Skoda Volkswagen and Mercedes Benz.

“Original Equipment Manufacturers’ 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 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,” the government.

Around 96,980 vehicles are estimated to have been scrapped by the RVSFs till mid of August.

However, some automakers and industry associations are of the opinion that the vehicle scrappage policy is yet to have a significant in the industry.

Recently, the Society of Indian Automobile Manufacturers (SIAM) President Vinod Aggarwal said the policy has not seen much impact and expects something from the government to give a further push for the scrappage of old vehicles.