Leading Indian car Manufacturers Maruti Suzuki
Motors are expecting huge profits from the incentive package that has been presented by the government of Europe. A new scheme called the “Scrappage Scheme” has led to an intense debate in the European countries. After the discussions on the pros and cons of the “Scrappage Scheme”, Maruti Suzuki and Hyundai Motors sensing an opportunity wants to grab this for the development of the Indian Car Industry.
Many European countries have introduced scrapping scheme as part of economic revitalization package. The scheme results in three main benefits.
- Revives several financial sectors including the auto industry, and steel manufacturing.
- This would help in discontinuing the old models that will give way for the new models with innovative technology leading to better performance and fuel efficiency which will result in lower emission and cleaner environment.
- Will bring in an economic turnaround and create more job opportunities
The term “Scrappage” is new to many. It is a very interesting concept where the government will offer cash incentives to people who surrender their cars older than 10 years. Car fleet companies have been instructed to renew their old cars. Car owners can surrender the car to local dealers and will be immediately entitled for cash compensation. Car owners can exchange their old cars for new ones. The UK paid £2000, while Germany gave a discount of €2500 for every vehicle surrendered.
To filter genuine candidates, the scrappage system rules that the car should have been in possession of the owner for at least one year. The scheme details that the discount cannot be used once the vehicle is purchased. Car owners with multiple vehicles can’t trade all of them at once to get a collective discount, for example, £4000 against two vehicles surrendered. The scheme prohibits dealers from trading their old vehicles to make money.
The European governments are laying special thrust on purchase of small cars as they are more fuel efficient and costless. As per an estimate by the UK government, the new cars sales are likely to cross 3,00,000 units in the current fiscal year.
The European Automobile Manufacturer Association (ACEA) too has recommended fleet renewal programme. Some of these companies in the European car market
include big economies like the Austria, France, Germany, Italy, Portugal and Spain. More eastern European countries are likely to introduce similar schemes in the near future. Every car surrendered under the scheme will attract a cash reward of €1000 to €1,500.