27 October, 2021
India’s scrappage policy is about to bring a sea of change in the way we look at the vehicle lifecycle. We dive deep to understand what’s in it for you and the ecosystem, at large.
You go to a premium branded clothes store and pick a nice T-shirt for yourself. You receive compliments wearing it and so it becomes your new favourite. You wear it at a few social gatherings and a few months later, it seems to lose its sheen, you then decide to wear it for your local runabouts, grocery trips and the likes. A few more washes later, the T-shirt seems to lose its shape with the continued twisting and spinning in the washing machine, and then you move it through the racks in the wardrobe and place in the ‘house wear’ section. After some time, with a few holes and colour fades, it moves from your wardrobe to your kitchen and does the duty of a rag – soaking up the spilled milk and cleaning the counter tops and so on. A typical household lifecycle of a T-shirt, isn’t it?
Vehicles, too, have a predictable pattern through their life. Once bought as a shiny new car, the pride of the family, gets handed over to the teenager, learning to drive. A car once used as a reliable piece of machinery to ferry the family in comfort over long distances, gets confined to the city, used as the second car or even sold to another family that is upgrading to a four-wheeler from a two-wheeler. Slowly through its life, the care and monies spent on the maintenance start to shrink and it then gets into the vicious circle of breakdowns and frequent service station visits.
Trucks and buses, too, go through the similar grind. Put through the long-distance haul carrying vital and heavy cargo from Delhi to Chennai, or Mumbai to Kolkata, for example, eventually changes hands to smaller transporters as they age and wear down. They are now doing shorter and lighter intra-state routes and then eventually gets side-lined to doing non-essential duties with significantly reduced kilometres per day runs and require higher maintenance which isn't forthcoming for the return on investment and is fast depreciating.
All objects and vehicles go through analogous lives and have a designed 'life span', except that an old shirt isn’t going to pollute the air, or an aged curtain on the window isn’t going to be a potential threat to the lives of its owners and other users.
But an old, poorly maintained run down vehicle most certainly, will. And that’s where the recently-announced Vehicle Scrappage Policy will bring about a world of change in the way we look at vehicle lifecycles. 75 years after independence, India is about to mature as an auto market, looking forward to new technologies, greener fuels and safer vehicles, while putting the old, aged, polluting vehicles to sleep.
So, how’s it going to holistically benefit the entire ecosystem?
To answer this, we will have to look at the interests and benefits of all the stakeholders.
First and foremost, the national economic interest is served as newer, more efficient vehicles on roads reduce consumption of precious and expensive crude oil.
Second, import bill of scrap metal and other material will also reduce as we make it available locally.
Third, scrappage centres, recycle plants and other allied industries will foster investments and generate employment throughout the country. New segments and sub-segments will be born in the MSME sector, helping entrepreneurs explore new lines of business.
Fourth, polluting, noisy old vehicles will make way for sleek, efficient and less emitting vehicles, which will help reduce the tail-pipe emissions and make the air cleaner, especially in the urban India.
Fifth and last, but not the least, old designs will be traded for modern engineering, making the vehicles safer for the owners and the other road users, reducing the risks of accidents and hence the mortality on our highways. All in all, each of us is a winner, with nothing to lose.
According to MoRTH, there are 17 lakh medium and heavy commercial vehicles that are older than 15 years without any valid fitness certificate, 51 lakh light motor vehicles older than 20 years and 34 lakh light motor vehicles older than 15 years. Assuming a good part of the numbers above go through the scrappage process and are replaced by newer vehicles gradually, the auto industry will see a strong replacement demand.
That’s good to hear, but what’s in it for me, personally?
Well, to start with, you, your children and your family will breathe cleaner air in the cities. You will drive newer, more modern cars equipped with the latest technology, which are safer at higher speeds. The newer cars you drive and own will be easier on the pocket to maintain, more reliable and lesser prone to breakdowns and those embarrassing moments when your car doesn’t start right in front your friends of relatives. And lastly, the newer cars will sip on fuel far more gingerly, helping you save a tad bit more.
The commercial vehicle ecosystem, too, will benefit immensely with newer trucks far less prone to breakdowns, ensuring the cargo they’re carrying reaches its destination on schedule, ensuring the entire logistics chain becomes more robust. Newer trucks come equipped with more comfortable cabins, which will translate to the truck drivers being less fatigued, which in turn will result into safer highways. Not to forget the new technology will also enable faster transportation of goods.
A holistic experience for all stakeholders, no?
All said, the new scrappage policy brings truckloads of opportunities, quite literally… Once implemented fully, it has the potential to revolutionise the auto industry, as whole. It will bring India closer to the western markets in terms of technology usage and increase market volumes. But, like every opportunity it does have challenges, too. Like building the right infrastructure to safely and efficiently scrap the old vehicles, democratising the scrappage centres and bringing them to tier II and III towns of the country, strength of RTOs to register and deregister vehicles quickly to name a few.
The Government along with auto industry bodies like SIAM and ACMA is working hard to get over the challenges and provide a viable business environment to companies, while incentivising individuals scrapping their old vehicles. Several OEMs including Tata Motors have already announced plans to be an active participant in the development of scrappage centres. In fact, Tata Motors’ Nexon, is the first Indian car to be featured on the prestigious International Dismantling Information System (IDIS) platform for end-of-life vehicles.
The Vehicle Scrappage Policy promises a greener, better future. However, like most Government initiatives, the onus lies on you and me to make it a success. Here’s wishing the best to all of us!