The vehicle scrappage policy shall give momentum to the used car business in India. A place where lower age cars will drive the demand. If any Commercial vehicles of more than 15 years and passenger vehicles of more than 20 years fails the fitness & emission test shall be obligatory to be scrapped.
Indian used car market will record a significant growth as per consulting firm Red Seer’s report. Furthermore, the car services and repairs market in the country is likely to grow at an annual rate of 12%. Estimated to touch $25 million by 2030 which is a mere $8 billion in the previous year.
India’s used car market, spearheaded by popular models like the Suzuki Swift, Mahindra Scorpio and, Honda City, predicts to cross 4 million units this fiscal year, up from 3.6 million units in FY 21. According to the MD & C.E.O of Shriman City Union Finance Y S Chakravarti, demand for lower-age used cars will pick up partly as finance companies will fund more in the commercial space. Setting to increase the availability of used cars in the market and aid in maintaining competitive prices.
The car scrappage policy on used cars to fall sharply stated – Shashank Srivastava, executive director at Maruti Suzuki. He further mentioned that the demand will move to younger cars with the consequent rise in their prices. As per the C.E.O of Mahindra First Choice, the effect of the proposed policy will be long-term. And standardized which will increase the demand for a quality preowned vehicle.
However, tech platforms are building product solutions to help service providers. Offering a comprehensive service package that includes warranties, pick up and drop facilities and related support to buyers, resulting in higher margins and footfalls. Due to the Vehicle Scrappage Policy, the average vehicle upgrade shall be 4 years. As compared to 7 years as of 2012 as per industry experts.