2.7 Million Trucks Face Red Light

Government to ban commercial vehicles that are older than 15 years from April 1

Nearly 2.7 million trucks could go off the road from April next year as the government, in a bid to check pollution, plans to make 15 years the end of life for vehicles carrying goods.

“We are going to make 15 years the end of life for all commercial vehicles,” Vijay Chhibber, secretary, Ministry of Road Transport and Highways, told Reuters. The order would be made public within 10 days and the ban enforced from April 1 next year.

The country is estimated to have 2.7 million registered trucks in the year 2000. The government can impose the ban by amending the Motor Vehicles Act and the Central Motor Vehicles Rules.

Last week, the government advanced the implementation of higher emission norms by two years.

Chhibber could not be reached for details. His office said he was out of station.

Experts said implementing the law will be a challenge unless accompanied by a scrapping policy and associated incentives to owners whose vehicles are crossing the deadline.

In addition to addressing the issue of pollution, the decision would create incremental demand for new trucks. The domestic market for large commercial vehicles is quite big.

A total of 195,918 medium and heavy goods commercial vehicles were sold in the year ended March 31, 2015.

In the first seven months of the current financial year, 136,201 units were sold, up about 33 per cent compared to the corresponding period last year.

Players can look to a sustained growth once the decision is implemented. The higher volumes will mean higher tax revenue for the government, too.

The industry is upbeat about the proposal.  Vinod Aggarwal, chief executive officer, Volvo Eicher Commercial Vehicles, welcomed it.

“These vehicles have lived their lives. Most of them do not comply with any emission norms. The move will create incremental demand for vehicles and address the issue of pollution to a large extent,” he said.

In a report last year, the World Health Organization had found 13 of 20 most polluted cities in the world to be in India (see chart).

“The industry had suggested to the government to introduce an incentive scheme for owners whose vehicles are being scrapped so that they can buy a new one,” said Aggarwal.

The top players in the segment are Tata Motors and Ashok Leyland.  Truck owners, however, are unhappy with the proposed ban.  “We are going to oppose this. You cannot have age as the criteria to remove a vehicle from road. Every year vehicles go for a fitness test at the RTO,” said Bal Malkit Singh, managing director, Bal Roadlines, Mumbai.  His company has a fleet of 400 trucks.

Singh added: “I may have a vehicle that runs for 30,000 km a year while someone else may have a vehicle that runs 90,000 km. We cannot equate the two just by age. It is like killing a person after he or she attains a specific age.”

A former president of All India Motor Transport Congress, Singh said fleet operators usually did not keep a vehicle for more than six or seven years. Under the Central Motor Vehicles Rules, a truck is allowed to ply on a national permit for a 15-year period. After that, it only has a state permit, meaning it cannot do long trips. Such vehicles are used by small operators in transporting goods locally.

Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers said we cannot equate the 15-year-old truck to a 15-year-old car used for personal transport since the personal vehicle is used to travel much lower number of kilometers and is usually better maintained than a truck.

Reference - http://www.business-standard.com/article/economy-policy/2-7-million-trucks-face-red-light-115120300938_1.html