1.1 mn old medium, heavy CVs offer good potential for scrappage: ICRA

Around 1.1 million medium and heavy commercial vehicles (M&HCVs), older than 15 years as of March 31 this year, offer a significant potential for scrappage, ratings agency ICRA said on Tuesday.

While the actual scrappage could possibly be lower given the nature of usage of such vehicles, even if a proportion of these vehicles gets scrapped, it can support vehicle sales to some extent by spurring replacement demand, it said.

The Voluntary Vehicle Fleet Modernisation Programme or the Scrappage Policy, announced in March 2021, is being implemented in phases, with effect from April 1 last year.

While the first phase of the policy proposed to mandatorily scrap government vehicles older than 15 years, the second phase, which started on June 1 this year, mandates scrapping on the basis of fitness of the vehicle rather than age, and as such, is more voluntary in nature.

ICRA also projects an additional around 5.7 lakh vehicles to cross the 15-year age threshold by March 2027, along with ..