OEMs to offer 1.5-3% discount against scrapped vehicles: Gadkari

New Delhi: Union Minister for Road Transport and Highways Nitin Gadkari said on Tuesday that several passenger and commercial vehicle manufacturers have agreed to offer discounts of 1.5-3 per cent on new vehicles purchased against scrapped old vehicles.

In the context of the upcoming festive season, these discounts are expected to further boost automobile sales and further incentivise the Centre’s Scrappage Policy.

Gadkari chaired a meeting with a delegation of top automotive executives representing the Society of Indian Automobile Manufacturers (SIAM) and discussed issues related to the automobile industry.

“During this interaction, multiple commercial and passenger vehicle manufacturers have agreed to offer discounts for a limited period against a certificate of deposit (Scrappage Certificate),”  a statement from the Road Transport Ministry said.

It said commercial vehicle manufacturers are willing to offer discounts for a limited period of two years and passenger vehicle manufacturers are willing to offer discounts for a limited period of one year.

Mercedes Benz India has already agreed to offer a flat discount of Rs 25,000, which will be over and above all existing discounts, the statement said.

As per the Ministry, passenger vehicle manufacturers like Maruti Suzuki India Ltd, Tata Motors, Mahindra & Mahindra, Hyundai Motor India, Kia Motors, Toyota Kirloskar Motors, Honda Cars and others will offer discount of 1.5 per cent of the ex-showroom price of new car or Rs 20,000, whichever is less, against the passenger vehicle scrapped by the owner in the last six months.

“Details of the scrapped vehicle to be linked in the Vahan system,” the statement said, adding companies may voluntarily offer additional discounts on identified models.

The statement pointed out that the manufacturers may have the liberty to extend this discount only on the identified models within their vehicle portfolio. “As the car is not getting exchanged but only scrapped, hence between exchange and scrap discount, only scrappage discount will be applicable, “ it said.

According to the statement, commercial vehicle manufacturers like Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, among others, will offer discount equivalent to 3% 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.

A old maruti car parking on RV road in Bengaluru on Tuesday.