Following a meeting with Union Minister Nitin Gadkari, numerous passenger and commercial vehicle manufacturers agreed to offer 1.5-3 percent discounts on new vehicle purchases against discarded old vehicles ahead of the Christmas season, according to an official statement released on Tuesday.

The statement went on to say that Mercedes-Benz India has granted a flat discount of Rs 25,000, in addition to all current discounts. Nitin Gadkari, Union Minister of Road Transport and Highways (RT&H), hosted a meeting with the SIAM delegation at Bharat Mandapam on Tuesday to discuss critical concerns in the automobile industry.

"During this interaction, responding positively to the advice of the minister RT&H and recognising the importance of Fleet Modernisation and Circular Economy, multiple Commercial Vehicle Manufacturers and multiple passenger vehicle manufacturers have agreed to offer discounts for a limited period against a certificate of deposit (Scrappage Certificate)," a statement read.

It stated that commercial vehicle manufacturers are willing to offer discounts for a two-year period, whereas passenger car manufacturers are willing to offer reductions for a single year. According to the statement, these incentives will further motivate vehicle recycling, ensuring that safer, cleaner, and more efficient vehicles are on the road.

The statement further stated that the passenger vehicle manufacturers such as Maruti Suzuki India Ltd, Tata Motors, Mahindra & Mahindra, Hyundai Motor India, Kia Motors, Toyota Kirloskar Motor, Honda Cars, JSW MG Motor, Renault India, Nissan India, and Skoda Volkswagen India will offer a discount of 1.5 percent of the ex-showroom price of a new car or Rs 20,000, whichever is less, on the passenger vehicle scrapped by the owner in the previous six months.

"Details of the scrapped vehicle will be linked in the Vahan system," according to the announcement, which adds that companies may voluntarily give further discounts on identified models. The statement stated that individual passenger vehicle manufacturers may choose to apply this reduction exclusively to the selected models in their vehicle lineup.

"As the car is not getting exchanged but merely scrapped, hence between exchange and scrap discount, only scrappage discount will be applicable," stated the statement."

As per the statement, commercial vehicle manufacturers, including Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors, and SML Isuzu, will offer a 3% discount on the ex-showroom price of a commercial cargo vehicle weighing more than 3.5 tonnes.

"Discount to be offered to a person buying a vehicle against a Traded Certificate of Deposit of a scrapped commercial vehicle would be equivalent to 2.75 per cent of the ex-showroom price for scrapping a commercial cargo vehicle with more than 3.5 tonne GVW (gross vehicle weight)," according to the statement. 

According to the statement, this strategy may also apply to buses and trucks. According to sources, top officials from the automobile industry attended the meeting, including SIAM President Vinod Aggarwal, Maruti Suzuki India, MD & CEO Hisashi Takeuchi, Tata Motors Executive Director Girish Wagh, Ashok Leyland Managing Director & CEO Shenu Agarwal, and TVS Motor Co CEO KN Radhakrishnan, among others.