Say old vehicles a bigger problem than new SUVs.
Stung by environment minister Jairam Ramesh’s criticism of the use of SUVs, the auto industry is seeking quicker implementation of a scrappage-incentive scheme to get rid of old and polluting vehicles.
All the major automotive companies and their apex body Society of Indian Automobile Manufacturers (SIAM) had made a presentation to the Ministry of Heavy Industry about the advantages of launching a ‘cash for clunkers’ type of scheme, which would incentivise the owner of an old vehicle to trade it for a new vehicle at a discount.
The scheme, which saw roaring success in the developed markets of Europe and the US, could also be launched in India. The Heavy Industries Ministry, now led by former Maharashtra Chief Minister Vilasrao Deshmukh, had set up a separate committee to look into its feasibility.
Indian auto bigwigs, including Tata Motors and Mahindra & Mahindra (M&M) among others, which predominantly have a diesel-fired model line-up in the multi-utility and sports-utility vehicle segments were slapped with an additional excise duty of Rs 20,000 in June 2008.
Ironically, this duty was later reduced to Rs 15,000 in the Union Budget last year, prompting critics to speculate that the move would fuel the demand for SUVs. The industry has seen a jump of 32 per cent in the sales of such multi-seater passenger vehicles, selling 303,202 units during the April-October period.
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Nigel Wark, executive director (marketing, sales and service), Ford India, said, “If the ‘cash for clunkers’ scheme is implemented in India, it will take many polluting and fuel-inefficient old vehicles off the roads. These will be replaced by new vehicles that have much better technology and vastly superior fuel efficiency.”
Most SUV models, which are preferred for their superior space and better comfort, have diesel engines. While Ford sells the Endeavour SUV in India, market leader M&M sells the Bolero, Scorpio and Xylo models in the utility-vehicle space, with a market share of 52 per cent.
A senior executive from SIAM stated, “We should have a plan that would discourage owners of older vehicles from keeping them running by making it more expensive. People own vehicles that are more than 10 years old and are highly polluting in nature mostly because of an improper service record.”
Automakers also add that contrary to the popular belief that SUVs cause more pollution than petrol counterparts, modern day utility vehicles run on engine technology which produces better mileage than models running on petrol, which is also more expensive.
P Balendran, vice-president, corporate affairs, General Motors India, said, “Be it MUVs, SUVs or passenger cars, diesel technology today is cleaner and more fuel-efficient than petrol. Diesel cars give more mileage and high-end vehicles running on the fuel do not pollute.”
Some manufacturers like Maruti Suzuki and Hyundai Motors are exporting vehicles from India to the developed markets of Europe, which follow an even stricter emission norm than India.