Tata Motors Expected to Build 4 Scrapyards in Urban Centers of India

Tata Motors will work hand in hand with its dealers by collaborating to build vehicle scrapyards in 4 major urban centers of India, which include Howrah, Greater Mumbai, Karnal and Hyderabad.

The dealers are required to scope for themselves with regards to investments and Tata Motors would offer them the required technical know-how as well as expertise for vehicle dismantling units.

The above step will help in the expansion of this business later; this move from Tata Motors is believed to be another revenue generating stream for its dealers.

In the near future, the company might also collaborate with different public sector enterprises, but initially they might choose to go on their own. The crucial factor here would be, the financial health of the dealers, most of them have incurred losses, since past few years, they have faced substantial losses because of decline in sales. This investment made by them, might not help them in the short run, but definitely in the long run, dealers would definitely benefit.

As per the nation's new vehicle scrapping policy, it is mandatory to scrap the commercial vehicles whose life is 15 years and above, if they do not meet the emission or fitness criteria as stated in the policy. This move would help the automakers to generate new sales.

If the old vehicles are scrapped and new vehicle is purchased, the central government has made a proposal in its policy, that it would offer a road tax rebate, nearing to 15 to 25% and it would completely waive the registration fee amount. It also urged the vehicle maker to provide about 5% discount against the certificate of scrapping. The scrap yards would offer a price to the old vehicles, getting scrapped, the amount would be about 4 to 6% of the new vehicle.

In India, there is around 1.7 million heavy as well as medium commercial vehicles older than 15 years, these vehicles do not have valid fitness certificate. And as per the Road Ministry Data, the number of light vehicles above 20 years old is more than 5.1 million.

In the near future, the vehicle scrapping would become a thriving business. Most automakers are interested to enter into this business as the number of old vehicles, especially the commercial vehicle number is astounding Most of these automakers, might tie up with varied other companies, so that they can have access to better technology associated with scrapping of vehicles. The Tata motors, is the India's biggest commercial vehicle manufacture, in the near future, above company seems to benefit.