2011 has not been a very prospective year for the auto manufacturers due to rising fuel costs, rising input costs, and rising interest rates. Thus, the apex body Society of Indian Automobile Manufacturers (SIAM) has stepped in to help the manufacturers with a suggestion to the Govt to scrap all private vehicles running on the road that have been made before 1996. This will ensure demand for new vehicles and hence push sales of new eco-friendly vehicles.
SIAM has advocated that the Govt should come out with a regular scrappage policy for private, commercial vehicles and 2 wheelers. However, the advantage is that there would be incentives in form of lower excise duties, sales tax and also cash discount for those who scrap their old vehicles. “We want the government to come out with a onetime concrete policy for scrappage of old vehicles. This would not only help in generating demand for new vehicles but go a long way in controlling old and polluting vehicles and resultant emissions,” SIAM president S Sandilya stated.
In the West and also in countries like Japan, similar scrappage policies have been adopted by their governments. S Sandilya further stated “The scrappage of vehicles will help in ‘greening’ the country. Also, we have to remember that new vehicles are not only more efficient but also more safer. “While a cut-off point of 10-year vintage could be considered for commercial vehicles, it may be appropriate to fix the cut-off point of private vehicles at 15 years or above. This suggestion is based on the assumption that maintenance practice of private vehicles are likely to be better while their usage is likely to be lower than commercial vehicles. In order to discourage people from running old polluting vehicles, the rate of road tax and rate of premium on motor vehicle insurance could be increased progressively with the age of the vehicle”. This is a very nice move initiated by SIAM though it is likely to face protests considering that in India the actual average life of the vehicles is pretty high.