Vehicle scrappage policy to help usher in greater investments: Renault

French carmaker Renault on Friday said the launch of the vehicle scrappage policy will usher in enhanced investments into the auto industry and also help in cutting down the raw material cost.

The automaker noted that the policy will provide the much-needed impetus in countering the old methods of scrapping material, which were counter-productive.

"The new policy was an imperative, long-awaited and will support the automobile industry and the ancillary support industry creating a win-win for all.

"The framework will augur greater investments and significantly prune the raw material cost and will support refurbishment of sheet metal recycling," Renault India Operations Country CEO and Managing Director Venkatram Mamillapalle said in a statement.

The scrappage policy is a panacea that will provide the right propulsion in form of generating employment in the auto ancillary/scrappage space and make the sector more organised, he added.

Earlier in the day, Prime Minister Narendra Modi launched the national vehicle scrappage policy, saying it will help phase out unfit and polluting vehicles and also promote a circular economy.

The policy will give a new identity to India's mobility and auto sector, Modi said in a video address to the Investor Summit being held in Gujarat to invite investment for setting up vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernisation Programme.

Mamillapalle noted that the scrappage policy is in many ways a significant epoch in the developmental milestone of the Indian auto industry, as it is a clarion call for start-ups promoting the 'Aatmanirbhar Bharat' vision of the PM Modi.

The infrastructure that will be developed to support the policy will make India an auto hub in the near future with automated testing stations and registered vehicle scrapping facilities across the country, he added.

Mamillapalle said the COVID-19 pandemic is slowly losing battle against the indomitable spirit of the people of India and resilience and optimism that prevails in the overall economic scenario. "The scrappage policy will mandatorily encourage recyclability and production of newer vehicles to replace those that are unfit and causing pollution in a scientific and amicable manner," he said.