Scrappage policy has to be incentive based, says Eicher Motors’ Vinod Aggarwal

The Ministry of Road Transport and Highways has proposed to bar registration of government vehicles older than 15 years. These rules to apply to Central and state government vehicles, state transport undertakings, public sector units, and autonomous bodies.

To discuss this, CNBC-TV18 spoke to Vinod Aggarwal, MD & CEO for VE Commercial Vehicles at Eicher Motors; and Nishant Arya, Executive Director at JBM Group.

On scrappage policy, Aggarwal said, "This is a welcome first step by the government to declare that all the government vehicles more than 15 years will be not be registered again. Definitely, if this scrappage policy has to be really effective then it has to be incentive-based."

He added, "Going forward, we are expecting that market is going to be good and there will be huge replacement demand and infrastructure investment. So as far as the commercial vehicle is concerned, the worst is behind.”

On the semiconductor issue, Aggarwal said, “Semiconductor shortage is still persisting right now and it is expected that it will go on for at least another quarter.”

Arya said, “It is a welcomed move and definitely it will boost the confidence of the industry.”

On capacity utilisation, he said, “Capacity utilisation is going up to the level of about 60-65 percent and definitely we see very good demand, especially in electric buses. Demand is picking up and there is very good growth in the electric vehicle (EV) segment and also in the CNG segment.”