The facility which can process one car in 200 minutes, is built at a cost of Rs 44 crore
Maruti Suzuki and Toyota Tsusho Group have inaugurated a vehicle scrapping unit in Noida, Uttar Pradesh with a capacity to recycle 24,000 cars a year.
The scrappage unit which is owned by Maruti Suzuki Toyotsu India (MSTI), a joint venture between Maruti Suzuki and Toyota Tsusho Group, is one of the first in the country. The facility which can process one car in 200 minutes, is built at a cost of Rs 44 crore.
Called as the ‘Voluntary Vehicle Fleet Modernisation Programme’ the scrappage scheme, launched by the Government of India on August 13, is expected to generate investments of Rs 10,000 crore. The policy is aimed at incentivising owners of old and polluting vehicles to take them off the road.
After the procurement from dealerships and individuals the end of life vehicles will reach the MSTI campus in the second leg of the journey. After confirming the documentation and inspection, the car is sent for pre-treatment and de-pollution to ensure zero discharge.
Thereafter the vehicle is dismantled and sent for processing and segregation of scrap before the steel is sold to steel mills and smelters. MSTI claims that there will can be scrap recovery of up to 95 percent.
The customer will get a direct payment in his bank account along with a vehicle destruction certificate. According to Nitin Gadkari, Minister or Road Transport and Highways scrappage policy likely lead to a cut in raw material costs by around 40 percent.
“I have asked OEMs to give Rs 1-1.5 lakh benefit to the buyer who has the scrappage certificate. I have taken the decisions that were possible at my level. We are going to discuss this with the Finance Ministry again, to think about ways to facilitate this. Can we give more concessions? We have planned something but we cannot discuss that at the moment. We are requesting the Finance Ministry, states and GST council to see if we can get more incentives,” Gadkari said after inaugurating the scrapping facility.
Other automakers are also warming up to the idea of setting up such scrapping centres. Tata Motors, India’s third largest carmaker and the biggest commercial vehicle maker, is planning to set up vehicle scrappage centres under a franchise agreement and the first such centre is expected to be operational in the first quarter of next year.