Nitin Gadkari, the Union Minister for Road Transport & Highways (MoRTH) has said that he aims to set up 2 to 3 vehicle scrapping centres in every district across the country. Gadkari made the announcement while speaking at the inauguration ceremony of a new Registered Vehicle Scrapping Facility (RVSF) in Haryana. The new scrappage centre - Abhishek K Kaiho Recyclers Pvt. Ltd. - has been launched by Abhishek Group in partnership with Japan-based Kaiho Sangyo.The new scrapping centre opened in Haryana has the capacity to process up to 1,800 vehicles a month and uses the latest technologies to salvage and re-use components from scrapped vehicles. Abhishek Group plans to set up another 7 to 8 facilities across the country within the next few years.
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While the Union Minister has not announced any tentative timeline or plan for the new scrapping centres, Gadkari said that they have huge potential for the Indian market. At the event, Gadkari also announced plans to use raw materials like old tyres and plastics in the construction of the country's road network. He also indicated that he had approached the Environment ministry to allow for the import of old tyres for the same purpose.
Gadkari has said that the scrappage policy will likely lead to a cut in raw material costs by around 40 per cent
Prime Minister Narendra Modi launched the Voluntary Vehicle Fleet Modernisation Programme, better known as the automotive scrappage policy, in August 2021, stating that the policy will bring in investments of around Rs. 10,000 crore. Back then, Gadkari had said that the scrappage policy will likely lead to a cut in raw material costs by around 40 per cent. Currently, about Rs. 22,000 crore worth of scrap steel is imported into the country, and scrapping old vehicles will help reduce this dependency.
As per the Government's new scrappage policy, all vehicles at the end of their registration period are required to undergo fitness testing. Only post this can the vehicle be eligible for re-registration. Post-re-registration the vehicle has to be fitness tested every five years. Currently, commercial vehicles require mandatory testing after 10 years while passenger cars have a shelf life of 15 years. The government also provides incentives to owners voluntarily scrapping their vehicle including scrap value of between 4-6 per cent of the car's ex-showroom price and a registration fee waiver on a new car.
The government also provides incentives to owners voluntarily scrapping their vehicle including scrap value of between 4-6 per cent of the car's ex-showroom price and a registration fee waiver on a new car
In November 2021, Maruti Suzuki and Toyota Tsusho Group jointly launched the country's first government-approved scrapping and recycling facility for end-of-life vehicles (ELVs), in Noida. Later in December 2021, both Tata Motors and Mahindra & Mahindra had announced signing Memorandum of Understandings (MoU) with Maharashtra Government to set up multiple vehicle scrapping centres in the state.
