New Delhi: With festive season round the corner, leading passenger and commercial vehicle manufacturers have given assurances to the government that they will offer discount deals between 1.5-3 per cent on new vehicle purchase, if the owner had scrapped their old vehicles. The announcement from the auto majors came after they emerged from a meeting with Union Minister for Road Transport and Highways Nitin Gadkari, officials said.
Taking to X, Gadkari wrote: "Chaired a highly productive session of the (Society of Indian Automobile Manufacturers) SIAM CEOs' Delegation Meeting at Bharat Mandapam today, where we addressed various critical issues facing the automobile industry."
He also revealed that the automobile makers accepted his recommendation on offering discounts for the purchase of new vehicles against the scrapping of older vehicles with a valid 'Certificate of Deposit'(Scrappage Certificate). He lauded the initiative bearing a positive impact on "circular economy efforts, ensuring that cleaner, safer, and more efficient vehicles are on our roads". The Minister also thanked the automobile manufacturers who have agreed to participate in Vehicle Fleet Modernization Programme, expressing hope that more will join this endeavour.
‘Top discount from Mercedes’
The highest of the discounts in passenger vehicles was offered by Mercedes Benz India. A statement from the transport ministry said the automobile manufacturer has offered a flat discount of Rs 25,000, in addition to the existing discounts.
Gadkari met with the office bearers from the Society of Indian Automobile Manufacturers (SIAM). The stakeholders and the government side exchanged their views on "pressing issues in the automobile industry", the statement said.
Why offer a discount?
"During this interaction, responding positively to the advice of the minister RT&H and recognising the importance of Fleet Modernisation and Circular Economy, multiple Commercial Vehicle Manufacturers and multiple passenger vehicle manufacturers have agreed to offer discounts for a limited period against a certificate of deposit (Scrappage Certificate)," it said.
📍𝑩𝒉𝒂𝒓𝒂𝒕 𝑴𝒂𝒏𝒅𝒂𝒑𝒂𝒎, 𝑵𝒆𝒘 𝑫𝒆𝒍𝒉𝒊
— Nitin Gadkari (@nitin_gadkari) August 27, 2024
Chaired a highly productive session of the SIAM CEO’s Delegation Meeting at Bharat Mandapam today, where we addressed various critical issues facing the automobile industry.
I am pleased to report that, in response to my… pic.twitter.com/9n4aUdgoby
How long will this offer be available?
The handout suggested that the commercial vehicle manufacturers were willing to offer discounts for a limited period of up to two years while passenger vehicle makers are willing to offer discounts for a limited period of one year.
The statement noted that these discounts will further incentivise the scrapping of vehicles, thereby ensuring the plying of safer, cleaner and more efficient vehicles on roads.
How much for cars?
The transport ministry said the vehicle 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 have agreed to offer a discount of 1.5 per cent in the ex-showroom price of the car or Rs 20,000, whichever is less. Provided, the owner should have scrapped his previous vehicle in the last 6 months.
While the ministry said the "details of the scrapped vehicle to be linked in the Vahan system," it also encouraged the car makers to voluntarily offer additional discounts on identified models. He said the manufacturer will be at liberty to extend the discount on its already identified models in their portfolio.
No Exchange Bonus
"As the car is not getting exchanged but only scrapped, hence between exchange and scrap discount, only scrappage discount will be applicable," the statement said. At present, some manufacturers were offering exchange bonuses between Rs 10,000- Rs 50,000.
How much for commercial vehicles?
The ministry's statement said the commercial vehicle manufacturers including Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors and SML Isuzu, had agreed to offer a discount of 3 per cent in the ex-showroom price for the chosen commercial cargo vehicle.
This will be applicable for vehicles having a gross vehicle weight of over 3.5 tonnes. "Discounts 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 tonne GVW (gross vehicle weight)," the statement said.
Will it cover buses and vans?
The ministry said it has suggested to vehicle makers that they can cover the buses and vans they sell under this scheme. They can consider the same scheme for buses and vans within their existing portfolio, an official who was privy to the information said. The final decision of extending discounts on buses and vans is vested with the makers.
Citing sources, PTI reported that the meeting was attended by top officials of the automobile industry, including SIAM President Vinod Aggarwal, Maruti Suzuki India MD and CEO Hisashi Takeuchi, Tata Motors Executive Director Girish Wagh; Ashok Leyland Managing Director and CEO Shenu Agarwal and TVS Motor Co CEO KN Radhakrishnan, among others.
