According to a CRISIL Research report, the Voluntary-Vehicle Modernisation Programme (V-VMP) announced by the Ministry of Road Transport & Highways can boost commercial vehicle (CV) sales volume by a cumulative 65 per cent (over sales in fiscal 2016) between fiscals 2018 and 2020. About 6.8 lakh CVs worth Rs 66,500 crore sold in fiscal 2016, the V-VMP scheme could lead to incremental sales of 4.4 lakh CVs (primarily MHCVs) worth around Rs 66,000 crore.
In addition, about two lakh CVs would get scrapped and replaced in the normal course through the three fiscals, given the current junking rate of about 67,000 CVs annually. Hence total vehicles opting for the scheme would be 6.4 lakh.
Binaifer Jehani, Director, CRISIL Research, said, “Transporters scrapping old CVs, are not buyers of new CVs, since their business is viable using only an older truck. Considering this, the government needs to either provide a cash discount to those junking old vehicles or make the V-VMP incentive certificate issued to transporters tradable.”