Diesel ban,scrappage programme to boost new vehicle sales:ICRA

The ban on registration of old diesel vehicles in Delhi-NCR and the proposed vehicle fleet modernisation programme could lead to around 3 per cent additional sales of new passenger vehicles over the next two years, rating agency ICRA has said.
Besides, the development could also lead to 3 per cent incremental sales in the two wheeler segment and additional sales of around 6-7 per cent in the commercial vehicle vertical.
ICRA Ltd Senior VP Subrata Ray said the impact of the scrappage programme could be limited owing to moderate level of incentive (8-12 per cent) being offered.
The resale value of 11-plus old vehicles may be higher than the proposed rebate in the scrappage programme, as the resale value of some of the key car models older than 11 years range between 8-15 per cent in the second-hand market, he added.

"However, the program may become useful for owners of old diesel vehicles, especially in the wake of recent ban in Delhi-NCR and other states like Kerala and Chhattisgarh. As market value of older diesel vehicles fall, the scrappage policy may become attractive for customer segments like taxi owners and old trucks," Ray said.
The population of vehicles older than 11 years plying on Indian roads is estimated to be around 25 million.

"If around 5 per cent owners across vehicle categories decide to avail the incentive program, the policy could provide 3 per cent additional sales in the passenger vehicle and two wheeler segment and 6-7 per cent in the commercial vehicle segment over next two years," Ray said.

Last month, NGT had ordered the de-registration of all diesel vehicles which are above 10 years old and also petrol vehicles which are over 15 years old in Delhi-NCR.
Besides, fast tracking the implementation of BS-VI norms, the Ministry of Road Transport and Highways recently published a concept note on voluntary-vehicle modernisation programme that aims to promote replacement of old vehicles and thereby bring down vehicular emissions and improve fuel efficiency.