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India – positive push to start new automotive circular economy from vehicle scrappage policy

According to consultancy firm EY, India’s vehicle scrappage policy can give a positive push to start a new automotive circular economy, offering opportunities for new and existing players to build a robust go-to-market product that will help consumers with ELV resale or purchase processes.


India - positive push start to new automotive circular economy from vehicle scrappage policy p one

The Economic Times, India, reported the scrappage policy for the automotive sector is here. EY India said original equipment manufacturers (OEMs) are responding to the new dimensions of mobility such as connected, autonomous and shared, new forms of ownership and an increased environmental focus across stakeholders.

EY India said in a statement that there is an opportunity to set up new business models where new players and the traditional automotive ecosystem come together in an organised manner to provide products and services to consumers.

Som Kapoor, EY India Partner, Automotive sector, said:

“We are at a point where we could see the emergence of a new business model that extends the current auto ecosystem, where both new players and traditional players can be involved to deliver solutions in an organised manner”. Kapoor added: “The scrappage policy will provide novel opportunities for both new and existing players to build a robust go-to-market offering and provide consumers solutions to ease the end of life of vehicle resale/ purchase processes.”

EY India said while there is a lot more to be done in the future, the scrappage policy brings many positives. It should lead to a reduction in emissions, act as a catalyst for vehicle sales, drive savings on imported raw materials and lead to an expansion of the overall automotive ecosystem, including fitness centres, new aspects of the supply chain, scrapping centres, and automation. And it can also provide some benefits related to pollution reduction, cut in the fuel import bill, improved recycle or re-use of parts, generation of replacement related demand and providing impetus to structuring this part of the automotive ecosystem.

EY India Partner and Automotive Sector Leader Vinay Raghunath said:

“Automotive OEMs have an opportunity to revolutionise the recycling industry by evaluating interesting business models which would help them achieve both environmental and economic goals”. He added: “They can potentially leverage the supply chain associated with recycled materials to reduce input material costs, impact vehicle prices positively, improve shareholder value and offer a choice to consumers.”

EY India also said the COVID-19 pandemic has made the industry realise the vulnerability associated with the current value chain structure at both the consumer and the supplier end.

To read the full report go to