These discounts will be extended for a limited period of one year by passenger vehicle makers, and two years by commercial vehicle makers, according to an official statement.
The announcement came after a meeting of Minister for Road, Transport & Highways (MoRTH) Nitin Gadkari with representatives of the automobile industry.
The initiative is a significant step forward in advancing India’s circular economy, promoting the use of cleaner, safer and more efficient vehicles, according to the statement.
Passenger vehicle makers Maruti Suzuki, 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 offered discount of 1.5% of the ex-showroom price of a new car or Rs 20,000, whichever is lower, against the passenger vehicle scrapped by an owner in the last six months. German luxury carmaker Mercedes Benz India has offered a flat discount of Rs 25,000, which will be over and above all existing discounts, the statement said.
Details of the scrapped vehicle will be linked in the government’s Vahan portal. Companies may voluntarily offer additional discounts on identified models.
According to the statement, passenger vehicle makers can offer discounts against scrapped vehicles only on identified models in their portfolio. Since an old car is not getting exchanged for a new vehicle but only scrapped, hence between exchange and scrap discount, only scrappage discount will be applicable, it said.
In the commercial vehicle segment, Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors and SML Isuzu, said they will offer discount equivalent to 3% of the ex-showroom price for a commercial cargo vehicle with more than 3.5 tonne GVW scrapped by the ‘owner’ in the last six months, and a discount equivalent to 1.5% of the ex-showroom price for a commercial cargo vehicle with less than 3.5 tonne GVW scrapped by the ‘owner’ in the same timeframe.
The statement noted that these discounts will further incentivise scrapping of vehicles, ensuring the plying of safer, cleaner, and more efficient vehicles on Indian roads.