Gadkari suggests vehicle scrapping to boost auto sales by 18-20%

12 Sep 2024 CW Team

Union Minister Nitin Gadkari has urged automakers to embrace vehicle scrapping as a way to increase sales by 18-20%. Speaking at the annual meeting of the Society of Indian Automobile Manufacturers (SIAM), Gadkari emphasised that establishing scrapping and fitness centers could significantly boost revenues for automakers. He also recommended offering a minimum 3% discount on new vehicle purchases when customers scrap their old vehicles.

India has nearly three crore end-of-life vehicles, and the scrapping policy presents a win-win opportunity for both the industry and the government. Gadkari highlighted that in markets like the US and Europe, vehicle scrapping has led to a 9-12% increase in sales. He further explained that scrapping could reduce the cost of components by 30-40%, improving profit margins for manufacturers.

Currently, India has 63 scrapping centers and 78 fitness centers, with plans for more. These centers have already attracted Rs 100 billion in investments, creating 35,000 jobs and reducing steel imports by 65 lakh tonnes.

The minister also called on automakers to adopt electric vehicles (EVs) and alternative fuels to contribute to India’s carbon-neutral goals by 2070. He noted that the transport sector accounts for 30-40% of the country’s air pollution and emphasised the need to focus on sustainability.

Gadkari also pointed to shifting consumer preferences, stating that buyers are now more focused on quality rather than cost, urging manufacturers to prioritise design, quality, and technology in their offerings. He also stressed the importance of enhancing vehicle safety through crash testing facilities and expanding India’s Bharat NCAP safety ratings to match global standards.

Lastly, Gadkari encouraged the auto industry to explore biofuels, ethanol, and CNG as alternatives to fossil fuels and emphasised the need for domestic lithium-ion battery production to reduce costs and position India as a key exporter. (Mint)

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