Incentives Should be Considered on Old Trucks: Ashok Leyland MD
Ashok Leyland, a leading manufacturer of commercial vehicles, proposed that the government should consider providing incentives for the disposal of outdated trucks in the upcoming Budget, as the existing policy lacks incentives to expedite the renewal of fleets.
He mentioned that the sector is providing discounts of up to three percent to individuals purchasing new trucks in return for proof of scrapping older vehicles, however, he expressed that this offer may not be appealing enough.
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“We thought it (scrappage policy) will be good enough, but apparently it is not. I can’t quantify as to what incentive the government should give, but it has to be something quite substantial”, says Shenu Agarwal, Managing Director and Chief Executive Officer, Ashok Leyland.
Shenu adds, “The government is not giving any incentives on scrapping older vehicles... The government has spoken to us that we should encourage the older truck owners to switch into newer ones because it will benefit the industry also, and we accepted as an industry body that we will allow some incentives depending on the model”.
Furthermore, he emphasized that scrappage should not be obligatory, suggesting instead that government-driven incentives related to vehicle weight could accelerate the process of replacement.
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He stated that Ashok Leyland intends to establish approximately six scrappage centers in cities such as Ahmedabad, Chennai, and Jaipur.
“It (scrappage) has some affect, but to fundamentally get into a scrappage economy and therefore trigger new demand, would need something more substantial... the whole ecosystem has to be developed and incentive will play a big role initially. It is not that government hasn’t done anything. Government has come up with RBI cess... many more are coming up. But, initially some kind of a push would be required to get into this habit of srapping of trucks,” Agarwal says.
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Shenu emphasized the need for decreasing the average age of the fleet to below eight years, as the current national average stands at approximately 11 years, the highest recorded. In addition to environmental advantages, the use of newer trucks is anticipated to decrease logistics expenses by transporting larger loads at faster speeds while emitting fewer emissions, according to Agarwal.
As per the Ministry of Road Transport and Highways, approximately 394,000 vehicles from various categories have been decommissioned by December 2025 through the implementation of the Vehicle Scrappage Policy or Voluntary Vehicle-Fleet Modernisation Program. Presently, there are approximately 200 scrapping facilities located throughout India.