Ahead of the upcoming festive season, several passenger and commercial vehicle manufacturers have agreed to provide discounts ranging from 1.5 to 3 per cent on new vehicle purchases when customers trade in their old, scrapped vehicles. This decision was taken following a meeting with Union Road Transport and Highways Minister Nitin Gadkari. According to an official statement released on Tuesday, Mercedes Benz India has committed to offering a flat discount of Rs 25,000 on new vehicle purchases, in addition to all existing discounts. The announcement came after Gadkari chaired a meeting with the Society of Indian Automobile Manufacturers (SIAM) delegation at Bharat Mandapam, where he discussed key challenges facing the automobile industry.
"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)," the statement said.
Offer for a limited period
The statement further outlined that commercial vehicle manufacturers have agreed to offer discounts for a limited period of two years, while passenger vehicle manufacturers will provide discounts for a limited period of one year. These discounts aim to further incentivise the scrapping of old vehicles, promoting the use of safer, cleaner, and more efficient vehicles on the roads.
According to the statement, several leading passenger 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 committed to offering a discount of 1.5 per cent of the ex-showroom price of a new car or Rs 20,000, whichever is less. This discount will apply to new vehicle purchases when the owner scraps their old passenger vehicle within the last six months.
Scrappage-linked discounts via Vahan system
The statement further clarified that the details of the scrapped vehicles will be linked to the Vahan system, ensuring a streamlined process for availing the discounts. Additionally, it was noted that companies may voluntarily offer extra discounts on specific models they identify. The statement also outlined that individual passenger vehicle manufacturers will have the discretion to extend these discounts exclusively to certain models within their vehicle lineup. This approach allows manufacturers to tailor the incentive program to align with their sales strategies and promote particular models. "As the car is not getting exchanged but only scrapped, hence between exchange and scrap discount, only scrappage discount will be applicable, " it said.
Discount on new cargo vehicles
According to the statement, commercial vehicle manufacturers namely Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors and SML Isuzu, will offer a discount equivalent to 3 per cent of the ex-showroom price for a commercial cargo vehicle of more than 3.5 tonne. "Discount 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)," it said. The statement said this scheme may also be considered for buses and vans.
(With inputs from PTI)
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