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Vehicle Scrappage Policy gets new lease of life
As per media sources, in a meeting held between SIAM officials, industry players and government authorities, Commercial Vehicle (CV) and Passenger Vehicle (PV) OEM’s have agreed to offer discounts to buyers who purchase new vehicles after scrapping their older ones, provided they have a valid Certificate of Deposit.
Discounts are expected to be offered in the range of ~1.5-3.5%.
This is positive for the industry and shall support volume growth in the near to medium term amidst high base limiting organic growth opportunities.
It shall also lead to some tangible benefits flowing out of already in force Vehicle Scrappage policy which has not really taken off in the desired manner and promote circular economy by phasing out unfit and polluting vehicles.
This is positive for domestic OEM’s especially on the CV front with potential beneficiaries being Ashok Leyland, Tata Motors and Eicher Motors (VECV arm) in our coverage universe
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