New Delhi: Highlighting the need for a streamlined vehicle scrapping system, Union Minister Nitin Gadkari Tuesday said that a push for scrapping of old vehicles can help the automobile industry boost sales of new vehicles by 18-20 percent.
At the 64th annual convention of industry body Society of Indian Automobile Manufacturers (SIAM), the road transport and highways minister asked the auto makers to invest in setting up scrapping centres across the country.
Gadkari said that currently there are only 63 operations scrapping centres in the country, while 60 such centres are under construction and 40 are in the pipeline. However, given that India has about 3 crore end-of-life vehicles, there’s still a need for more such centres.
“I feel that it is an economically viable venture which is going to support you to get more profits,” the minister stated, adding that because of scrapping and recycling, manufacturers will be able to reduce the cost of components by 30-40 percent, thereby reducing the cost of the final product and increasing their profit margins.
“So, it is a win-win situation. Please consider establishing your fitness and scrappage centres. Because of scrapping, Germany saw its sales increase by 12 percent and the USA by 15 percent…in India…my feeling is that your sales will increase by 18 to 20 percent.”
Gadkari stressed that this will also help reduce steel imports by 65 lakh tonnes and create additional 35,000 jobs.
The minister said that there are two main challenges in transportation that need to be dealt with—high import bill for fossil fuels and air pollution. “We are importing Rs 22 lakh crore worth of fossil fuel…Now, ethics, ecology, and environment are the three important pillars of society. And as far as the ecology and environment are concerned, it is really a very serious problem. Because of transport, we contribute to 30 to 40 percent of air pollution.”
Clarifying that while his comments are interpreted as him opposing the use of petrol and diesel, the Union Minister said, “I am not against petrol or diesel. But I am telling you about the needs of the country.”
(Edited by Tarannum Khan)
Also Read: ‘Overambitious’ car manufacturers pose risk to India’s auto market despite no dearth in demand