[blackwasp]

The Indian auto industry is going through a very difficult time. Even before the current closure due to the pandemic, the industry was on a downward slope. Sales are slow and those with existing cars are holding on for a longer period. Multi-car households are going down in numbers as well. Offerings like the app-based taxi services, self-driving car rentals and even long term subscription plans will further reduce car ownership amongst private buyers.

In these tough times, can a formal policy for the scrapping of older cars turn out to be a saviour to the auto industry?

I will not go into the pros and cons of the scrappage policy or the minute terms and conditions of it, the point of this thread is to discuss if such a policy could positively impact the auto industry. Following are some of the positive points for the same:

• Existing scrap yards are mostly unofficial and the working conditions are extremely poor. Further proper disposal of hazardous substances (eg. batteries) is not done.

• With dedicated facilities, a lot of parts could be recycled and those that can't be would be disposed off in a responsible way.

• There are over 90,00,000 vehicles over 15-years running on Indian roads. I'm sure a majority of those are not well kept. They run on older fuel norms and it is definitely more polluting compared to modern vehicle emissions.

• Steel, Aluminium, Copper can be reused to make cars and will reduce the need for mineral resources.

• Will generate more job opportunities.

• Organized players are already coming into the picture - Maruti Suzuki and Toyota Tsusho India are in talks meanwhile Mahindra has partnered with MSTC to set up a facility in Greater Noida.

• In 2009, the US government ran the 'Cash for Clunkers' scheme where those scrapping their old cars (less than 25 years old) could get US$ 3,500-4,500 off new cars. The scheme claimed to have increased car sales in the short term as well as improved the average mileage of the car on the road. Additionally, one of the side effects was that a lot of safer cars were now on the roads - the older ones had much fewer safety features than their modern counterparts.

BHPians, please add to this list and share your thoughts on the same. The Indian scrappage policy has already been delayed and has been in talks since 2015. The policy has been sent to the cabinet in February 2020 and is currently awaiting the final approval.

[vinya_jag]

This is just my GUT feeling, on what kind of cars I have seen on Metros and smaller cities.

I see less than 1% of very old cars plying on Bangalore roads. The oldest cars that I see are mostly Zens and Maruti 800s, which have very low carbon footprint.
Most old car owners usually have a new car in their garage for their daily usage.
If you ask these cars to be scrapped, hardly anyone will agree, or if they are forced to, they might end up modding their cars to newer engines or fuel/ exhaust systems.
And, if they are scrapped irrespectively, then they might not go for a new car at all.

It is the tier two and tier three cities that have many of these cars plying.
How do you force them to scrap their cars. It would be very harsh to force someone's utility. The most they would have paid for these will be a lakh or two, and if they are forced to scrap, they will have no money to buy a new car which is easliy upwards of 5-8L.

The best case scenario:
Tier 1 cities feel threatened about their cars ageing, and start selling their 6-7+ year old vehicles. Smaller cities scrap their old cars that are 15+ years or older, and start buying these newly available 6-7+ year old cars. A FIFO stack, where a new chain of 15 years gets built instead of the current 25 year chain.
I don't see this happening.

So, voting NO

[kiku007]

Long story short, the Auto-industry will get ZERO support from the Government. People and businesses in far dire situation are left high and dry.

Just accept it and move on.

[hareshjethwani]

With the COVID 19 onslaught, I don't think the government would do anything atleast for a year or so to cause further inconvenience to the people.

[Dry Ice]

My only recommendation is to not have this scrapping policy based purely on age. It should be voluntary or perhaps if a vehicle is not able to obtain a fitness certificate (with scope for retries).

A blanket age based scrapping policy can even backfire for mid segments. If I know the next car I am going to buy will need to be scrapped 10 years from now, I will not splurge on the purchase but would rather buy something which just about does the job for me (Nexon vs Harrier). The sub 10 lakh bracket is anyway where most purchases happen. It might increase, but maybe, at the expense of the higher brackets.

[Mortis]

Actually it's the Commercial (heavy and light) and public transport vehicles that are in need of scrapping as they are generally older, poorly maintained, well used, polluting and unsafe.

On the private front, I think the majority of 2 and 4 wheelers would be less than 15 years old. The sharp increase in private vehicle ownership only started in the recent past when EMI and loan culture started picking up otherwise owning a car and especially multiple cars per family was quite rare even in the metros till the early 2000s or as I remember it the City, Lancer and Santro era !

The best solution according to me is to have a strict fitness test for vehicles like they do in some countries. Not on a yearly basis as that would be hard to manage but atleast every 3 years or so with multiple parameters being tested stringently with a points system. Once your vehicle gets less than X points, maybe due to high running or poor maintenance or outdated technology, then the car has to be scrapped. You will get X amount for scrapping it which can only be redeemed against a new vehicle.
Testing cost should not be cheap like PUC and should be more or close to the average annual service cost for a vehicle in that category so that should encourage vehicle maintenance.
Most of the testing fees should go to the testing technician with only some amount going to the govt. This will make sure he is well compensated for his labour and also should encourage honesty, if for example he makes 4000 bucks on a 5000 buck test, then he's not going to fudge the data for a smaller amount, although this should be doubly reinforced by computerized testing of some parameters (like the PUC) which he cannot fudge or something like that.

[Miyata]

Voted No!

The cash for clunkers program did not really do much. There had been plenty analytics done and hardly anything emerged in its favor. Keynesian economics, in that aspect, was regraded as flawed.

Folks really do not need any encouragement in spending their money - ensure they have steady jobs; are making decent money (well paid); improve their purchasing capacity / power and the economy just rolls on its own. Money will flow like blood flows through the human system to keep it well oxygenated and healthy....in the pink of health!

The world is not filled with true Gandhians (simple living etc). Folks have money, folks will spend. Will visit Gandhi once a month during some weekends. Will occasionally fast too, but will ensure there is massive feast on either side of a fast!

All these artificial measures like clash for clunkers are just fancy ways of delaying the impending disaster without addressing the core issues.

[wildsdi5530]

A very stupid suggestion. Whenever I think of replacing my 2004 Alto, There just isn't any other small car with that build quality. I'll have to go up to the Polo size before I can find something similar.
Also please realize that a 15 year old private vehicle has been kept in excellent condition if it is still running as a daily driver after clocking 2-3 lakh Kms. No point in scrapping it. Of course commercial vehicles being run for 15 years tend to be in a khatara condition. Often being kept for fleet size norms or to scam customers.

[ajmat]

Instead, the government should become strict on the condition of cars over 5 years old. Set up testing stations which charge a decent fee, generate employment in the service sector as skimped repairs will need to be addressed.

Japan takes it to another level where the test gets so expensive, decent cars get scrapped due to the cost of the test. Keep it reasonable and not to this level.

[Kosfactor]

The scrappage policy in the USA was such that government will give you a discount on a new fuel efficient car when you trade-in a less fuel efficient car. This in practice do not save much in terms of carbon footprint because you've spend a lot of energy producing something that wasn't required in the first place. USA also has one of the highest in terms of car per 1000 people more than 800, so hardly any need to increase consumption.

Back to India: ~ 20 cars per 1000 citizens, why not give a 5% rebate in road tax for any new vehicle registered in the next 6 months? It may actually make the ones with money and sitting on the fence about a purchase spend that money now.

Why depend on government anyway? Manufacturers can make a deal with banks to provide low interest loan for cars purchased in the next 6 months as well if the regulations allow it.

Scrapping as in destroying a perfectly usable vehicle of any age is bad for the environment as producing a new one is far more energy intensive. I'm against scrapping vehicles.

[Manoj2268]

As someone who was forced to scrap 3 vehicles due to the purge in NCR, I voted no.

The govt can come up with the following steps.

First inspection to be done at the end of 6 years. Parameters like chassis integrity and emissions to be evaluated with the values THAT WERE PRESENT at the time when the vehicle was made.

A sticker to be pasted on the windshield with the expiration date.

Subsequent inspections to be done in 3 year intervals and yearly after 15 years.

A call to scrap vehicle to be taken if and only if the chassis is unviable.

[MaanSingh]

IMHO scrappage policy should and must be there in some form or shape.
Max age could be set to 20 or 25 years, but we need to have some sort of scrappage policy in place.

[wildsdi5530]

Originally Posted by ajmat

Set up testing stations which charge a decent fee, generate employment in the service sector as skimped repairs will need to be addressed.

One more organization and another vertical of Babus to pay. At least now we can extend the registration paying only Rs. 4000/- for a small car directly at the RTO.

[IshaanIan]

What will actually benefit the automotive sector is if we have someone who loved cars, in charge of transport. We need to start focusing on laying smoother more well planned tarmac across the nation. Honestly, I would love to see the government fund projects that get private car ownership and bike ownership into the hands of the masses. We no longer have anything like the Maruti 800. The new Alto is shockingly overpriced, the Nano was an incomplete project IMO and I don't see why we cannot have another simple petrol powered small car that costs zilch. I would be more interested in providing optimal private transport to the masses than wasting time, money and resources on massive metro rails that ruin the views in the city and buses that pollute so much and add to congestion. Make it sensible to own a petrol car again please

[anjan_c2007]

As always, I have advocated a consensual scrappage policy, solely with the consent of the owner. Exceptions should include automobiles that are declared unfit for not being compatible with the fitness norms as stipulated under the Indian Motor Vehicles Act 1988, by an authorised/ designated official. Registrations of such automobiles in the latter category are cancelled by the Registering Authority.

India is not a rich country to afford 15 year shelf lives of automobiles (only privately owned vehicles are being discussed by me here). We have the lower class, lower middle class, daily wagers, retired persons and a host of others who buy an automobile only once or twice during their lifetimes. Apart from this, we have enthusiasts who maintain very old automobiles (leaving apart the classic and vintage categories, but only focussing on the 16-49 year old automobiles) in a pristine condition, that could be 16-49 years old.

The automobiles aged 50 plus are to be soon protected as historic vehicles as per a draft notification by the Union Road Transport Ministry, that may soon become law.

Hence, the targeted 16-49 year old automobiles by the SIAM and FADA, also aided by the two major car scrappage plants being readied by Mahindra and Suzuki-Toyota need a compulsory scrappage policy for which they are tirelessly lobbying. These are sinister moves and need to be short circuited.

Yes, as the policy makers say, they will import 'end of life cars' from abroad and salvage them here in these two (plus more in future) plants, this is a welcome step. Plus unauthorised scrapping releases harmful pollutants in India and if it's done at environmental friendly and authorised plants, the risks will be lesser.

No civilised country in the world other than Japan has a compulsory 'end of life' policy for automobiles. France levies higher taxes on older, non classic/vintage automobiles. China has a compulsory scrapping policy, but we cannot list China as a civilised country, as I have said in other threads.

To counter argue with the clean air, green and pollution lobbies who say that older automobile riddance will clear the air of toxicity, the Delhi and NCR smog of winter 2019 was the worst ever, despite the fact that all older private diesel and petrol cars have been banished. These lobbies if at all they want clean air and greenery, free of pollution, must reason for incentivisation of public transport and disincentivisation of personal transport with the government.

Hence it's Utopian to think of a compulsory scrappage policy here in India and in turn a pipe dream to think that such a policy will propel sales of automobiles.