Events and Updates

Title: India's auto industry needs a sustainable scrappage policy

Posted on: 11th February 2019

In May 2018, Harsha Udupi and his neighbours in a residential colony in a western suburb of Mumbai got together to discuss how to bring some key civic issues to the attention of local authorities. One of the top priorities was finding a way to get rid of abandoned cars in the streets outside their housing complex. “Many of the cars don’t belong to our area. They were either trafficked or abandoned here. Sometimes, the owners just got rid of them here. They’re absolute junk,” says 59-year-old Udupi, who spent more than three decades working in information technology companies.

These cars were used to dump empty liquor bottles or doubled as storage space for street-side vendors. The abandoned vehicles ate into public parking spots, too. The group had had enough. In August, it decided to do a count of the cars and take pictures. There were 52 cars in all, and after its efforts were reported by Mumbai Mirror, the municipal corporation removed half the cars within three months. But when the residents did another survey last month, they found that more cars had been abandoned in the locality. The count now was 45.

Cars or bikes on the side of roads, with missing parts and covered in an inch of dust, are a common sight across Indian cities. As more vehicles becoming obsolete in the coming years — partly due to stricter government regulations on emissions — the number of vehicles being abandoned like this would only increase.

One major reason for the problem is that India does not have a scrapping or recycling policy for vehicles, even though the country is the world’s fourth largest car and light commercial vehicle market by volume and also the largest two-wheeler market by volume. Nearly 25 million vehicles were sold in India in 2017-18, more than 80% of which were two-wheelers and 13% were passenger vehicles, according to the Society of Indian Automobile Manufacturers. In 2016, India had 230 million registered motor vehicles, according to the latest data from the ministry of road transport and highways. The number of vehicles per 1,000 persons has tripled since the turn of the century to 167.

According to an estimate by the Central Pollution Control Board (CPCB), GIZ, a German development agency, and Chintan, an NGO, there were 8.7 million obsolete vehicles, also called endof-life vehicles (ELVs), in 2015. That figure will increase 2.5 times to 22 million in 2025, given that the average lifespan of a vehicle is 10-15 years.

Some used vehicles end up in scrap yards. But even at these yards, workers use crude and unscientific methods to dispose vehicles. Such practices pose a danger to health and environment. The sector needs to be regulated if India wants to avoid a disaster.

There have been efforts to increase vehicle ownership. But steps to improve infrastructure to support a growing fleet or a sustainable method of junking have been inadequate. Older cars, despite being more polluting and less fuel-efficient than their new counterparts, still find buyers. For every new car purchased, one used car is sold in India, says a Mordor Intelligence report published in May 2018. The market for used cars in India is expected to reach $75 billion by 2023, recording a of 15.2% during the period, it added. This gives a magnitude of the problem that the country is set to face if a relevant policy is not put in place soon.

Obsolete vehicles not abandoned haphazardly make their way to scrap yards in places such as Mayapuri in New Delhi, Kurla in Mumbai and Shivajinagar in Bengaluru. There, the vehicles are taken apart. It takes just half an hour for two guys to dismantle a two-wheeler and four hours to dismantle a car. Valuable parts — like the engine, battery, tyres, wipers and clutch plate — are sold. These parts can fetch a profit of 30-70%, according to a 2012 study by Chintan, an NGO, and GIZ. Steel and scraps are also sold to recyclers of those materials.