There is no denying that these are troubled times for the automotive industry, be it passenger vehicle space or the commercial vehicle segment. In addition to concerns and confusions regarding the future of existing BS4 models, once the new BS6 regiment kicks in, the new axle loading norms have also adversely affected CV sales in India. While the industry has been largely demanding for a reduction in GST rate to help the industry cope up, Daimler India Commercial Vehicles MD and CEO, Satyakam Arya, says that GST cut will not be enough. Instead, Arya says that the government needs to come out with an effective scrappage policy to help the industry.
Speaking to us on the sidelines of the special sneak preview of Daimler's first BS6 commercial vehicles for India, Satyakam Arya said, "We believe that a scrappage policy will definitely help the CV market and GST cut will only have a marginal impact. Therefore, the government should take this chance and come out with a good scrappage policy. Now, what are the important elements there? Well, we should have enough incentive for someone to scrape their truck. Second, we should have authorised and well run scrap centres which principally have a philosophy of recycling and reuse and not only just scrap. And third, we need a very proper IT-enabled framework that a scrap certificate could be provided to someone who scraps his or her vehicle and is able to trade it. You need to understand that most of these people who own these very old trucks are not the first owners they are the second or the third, or even the fourth owners. They may not be the ones who interested to buy a new vehicle right now, but they will also not be motivated to scrap, and therefore we need a proper incentive and a mechanism that this all can be done, in a controlled manner, so that and we can see the benefits of the scrappage policy."
Speaking at the 59th Annual Society for Indian Automobile Manufacturers (SIAM) convention, Nitin Gadkari, Minister of Road Transport and Highways (MoRTH) said that a scrappage policy will be announced soon. He said that the government is working on introducing a scrappage policy as soon as possible. SIAM has been urging the government to formulate a scrappage policy to phase out older and polluting vehicles. This, in turn, is expected to create demand for new vehicles in what is the worst slowdown in the auto industry since 2009. The scrappage policy is part of the stimulus package requested by OEMs for the auto sector's revival, in addition to a 10 per cent reduction in the GST rates. The auto sector currently attracts a GST of 28 per cent, apart from cess.
Daimler India Commercial Vehicles (DICV) has recently showcased the company's first Bharat Stage VI (BS6) compliant vehicles, the 1217 truck and the Glider tourist bus, in India. The commercial vehicle manufacturer will launch the new BS6 models only in the first quarter of 2020, once the BS6 fuel is available across India. Daimler India also confirms that it was able to achieve a localisation rate above 80 per cent on its BS6 models, and aims to extend that to 90 per cent in the future.