[Y@SH]

Source: TOI

The auto industry has seen a slump in the recent past. Most car makers are struggling to meet their sales targets but with the arrival of the festive season car makes are hoping to capitalize on the opportunity to limit their sales loses for the year. Still, overall the auto market in India has slowed after recent rise in fuel prices and a hike in loan rates by the RBI. The Society of Indian Automobile Manufacturers (SIAM) are now proposing a scrappage scheme for cars manufactured prior to 1996.
SIAM proposes to scrap all private cars made before 1996 which will help boost demand for new cars and in turn will promote sales of new cars. There is also an environmental aspect to their proposal. As technology has been developing for the past years, modern cars are now more economical to run and produce lower emissions than before. Thus scrapping old cars will take them off our roads eliminating the particulates emitted by these cars. The cars will be replaced by new ones which are more fuel efficient and cleaner.

Do you think this is a good idea? I think just lowering the interest rates and petrol prices would work.

[hellmet]

There is more environmental pollution caused with the manufacture of a new car than running that old car without scrapping it. Somebody needs to knock some sense into SIAM. They're trying to encourage more stuff in an age where austerity and sharing seems to be becoming the norm.

SIAM needs to watch this:

The Story of Stuff - YouTube

[libranof1987]

Since when environment become an issue in India?

There are buses, trucks and autos from the 1970s, 1980s and 1990s running in all parts of the country; and it is these vehicles which contribute immensely to pollution. Although sizeable, the no. of private 2 and 4 wheelers would hardly be doing any bad to the air as much as the buses/trucks/autos.

And 1996?! That's like now! Tons of Indians must still be having some or the other car that is manufactured around that date.

IIRC, there was some ruling in Mumbai to scrap the black-yellow taxis that were a older than a particular no. of years; I didn't see much happening on that account.

Nobody takes action against the real culprits - STCs will still run victorian-era buses, there'll be trucks manufactured in 1980 still moving around, less said about autos the better.

And since when was SIAM worried about these things?

[govigov]

Cash for Clunkers

http://en.wikipedia.org/wiki/Car_All..._Rebate_System

[roy_libran]

At a very high level, this is indeed a Good Idea.

While this must be enforced at some point, due to Environmental and Safety considerations, and must be provisioned for, within the purview of law, it is also necessary to see that end-users are not grossly disadvantaged.

It is important for the economy, that the Manufacturing sector continues to perform at an acceptable level, and this proposition can ensure just that for the Auto Manufacturers and all related secondary industries. This will stimulate some more demand in the market, and bring back volumes. However, this should not lead to blind profiteering, as has become the norm in India nowadays.

The initiative, and policy if necessary, must give end-customers a good price advantage over the going rates, if it is to be fair. After all customers are going to take a hit, for the sake of the environment and the manufacturing sector, so it is only fair that there is some compensation involved.

Right?

[Y@SH]

Originally Posted by roy_libran

At a very high level, this is indeed a Good Idea.

It is important for the economy, that the Manufacturing sector continues to perform at an acceptable level, and this proposition can ensure just that for the Auto Manufacturers and all related secondary industries. This will stimulate some more demand in the market, and bring back volumes. However, this should not lead to blind profiteering, as has become the norm in India nowadays.

Right?

I feel this would lead to an economic problem. What is inflation? It is caused because of high demand and less goods available. Why has government risen the interest rates? To reduce demand, so that it decreases and prices go back to normal. What will happen if people buy more cars after this suggestion passes, given the current economic scenario? Increase in Inflation.
Why? Because the more people demand for cars the more manufacturers demand for raw materials the more the demand the further increase in prices.

[ACM]

It is always the Commercial vehicle which have to go first in such a case, so the only Taxi and ricks would go first. Lets see that happen before we worry about private cars.

It's just not going to happen, they could though charge a higher tax for older vehicles and that would be fine.

Also as mentioned by other on the way it is more damaging to the environment to produce a new car then the polution caused by using the older in effecient one.

[harimakesh]

Greedy car companies doesnot understand a good old functional car is a integral part of Indian family.

Of all the aging automobiles why only personal cars be scrapped?

That too SIAM say your car is of 1996 then is too old for Environment and hence scrap it! LOL!

M&M man Pawan Goenka seems hell bent making ways for XUV 500 future sales while he serves at SIAM as president?

Cars are treated emotionally in India rather a mere transportation "thing".

There are all type of taxis / autos/buses/commercial vehicles running all across India which are 1980's production.

Poor pot holed roads in India cause environmental havoc due to traffic jam resulting in wasteful burning of fuel across the country.

[WhiteKnight]

Originally Posted by Y@SH

The Society of Indian Automobile Manufacturers (SIAM) are now proposing a scrappage scheme for cars manufactured prior to 1996.

Just lobbying and arm twisting for better profit. Nothing wrong with it, as long as the Government is upright and considers every angle. Then, what if it becomes another 2G

Originally Posted by Y@SH

Do you think this is a good idea? I think just lowering the interest rates and petrol prices would work.

Petrol prices may not be lowered as Government is mulling selling stake in PSUs. So, more profit for Oil PSU= better deal for them. Also, control over price would be something any private oil player would demand if they agree to buy stake. Bottom line is common man gets hit.

Originally Posted by roy_libran

It is important for the economy, that the Manufacturing sector continues to perform at an acceptable level, and this proposition can ensure just that for the Auto Manufacturers and all related secondary industries. This will stimulate some more demand in the market, and bring back volumes.

What you need to understand is, protection oriented policies would not fuel growth. It would only end up siphoning taxpayer's money. If indian auto industry dies, and everyone start buying Chinese cars, so be it. Customers benefit eventually.

[speedmiester]

Another half baked proposal by SIAM. Hopefully it will never come to effect.
Cars are more than just machines for many Indians, it has far more sentimental value.

[getsriram]

The suggestion is just to show the world that SIAM as a body does exist. Car sales are slowing down off late. There is long term decline in sale of petrol cars particularly in India. So as an industry body SIAM has to do / at least pretend to do something. So I fine day an Eureka idea such as this props up.

This idea will not make any impact in reality. Nobody will approve such an idea. So it is equivalent of political party statements which demand all of sudden that corruption should be eradicated.. funny guys.

[patil]

A really novel idea in fact. However only the private vehicles should not be targetted. Irrespective of the nature of use of vehicle every vehicle which is older than 15 years should be scrapped.

In fact the new cars use better safety standards and offer better fuel efficiency. I have actually seen very old maruti vans being repainted and repaired and used as school vans or used for ferrying small innocent kids to schools which is very dangerous.

With the scrapping of the old vehicles the pollution levels will come down and the speed of the traffic on the roads will also increase.

Maybe not everyone will agree with me on this but the extended use of the old vehicles has made the cars very affordable and for example one can buy a 800 for 25k and an indica for 75k so most of the people who are least bothered about safety or the environment have been buying such cars and using them without following any traffic rules or keeping them well tuned.

[shortbread]

The Scrappage scheme is not mandatory. The option is that when you scrap your old car you get a rebate/cash back on the new purchase. Its simply a financial incentive for people using older cars. Its got various benefits:

• Get rid of older cars in place of newer more fuel efficient cars
• An incentive for the public making new cars more affordable
• Boost to the Automotive and retail sectors

This has worked successfully in various countries including the U.K and China.

The Govt. can at least implement the scheme for drivers of dilapidated autorickshaws and taxis.

[ACM]

Originally Posted by shortbread

The Scrappage scheme is not mandatory. The option is that when you scrap your old car you get a rebate/cash back on the new purchase. Its simply a financial incentive for people using older cars. Its got various benefits:

• Get rid of older cars in place of newer more fuel efficient cars
• An incentive for the public making new cars more affordable
• Boost to the Automotive and retail sectors

This has worked successfully in various countries including the U.K and China.

The Govt. can at least implement the scheme for drivers of dilapidated autorickshaws and taxis.

An Incentive model that is not mandatory can work partially- should be for both public and private cars. What would fund the incentive? - no excise on new car if an old one is scaped along side? - They should then even have the number plate continued onto the new car to be sure.

[Fuldagap]

Originally Posted by Y@SH

I feel this would lead to an economic problem. What is inflation? It is caused because of high demand and less goods available. Why has government risen the interest rates? To reduce demand, so that it decreases and prices go back to normal. What will happen if people buy more cars after this suggestion passes, given the current economic scenario? Increase in Inflation.
Why? Because the more people demand for cars the more manufacturers demand for raw materials the more the demand the further increase in prices.

Totally agree. The market may seem to be offering new jobs, competition based price cuts and new avenues but in the long run depletion of resources will ultimately lead to inflation. I reckon somebody's gain is somebody's loss in this situation.

Reminds me of the classic economic's problem, "Whether breaking window glasses is good or bad for the economy?"