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Bracing For The Rollout Of Scrappage Policy As a financier and service provider in the pre-owned vehicles segment, Bike Bazaar is bracing for the rollout of scrappage policy. Sumesh Soman looks at the value proposition and impact on the components ecosystem as a crucial subset.
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he verdict on the scrappage policy is a split one! Divided between an opportunity on one end of the spectrum and a threat of negatively impacting the pre-owned vehicle segment. Warranting a voluntary scrappage, restricting the life cycle of a vehicle to 15-years, the latter segment, has some stakeholders concerned about the business running into third and fourth owner hands being impacted. Here, financier and service provider of pre-owned vehicles, focussed on two-wheelers up to 500 cc, Bike Bazar, has sensed an opportunity. Averred Srinivas Kantheti, Cofounder at Bike Bazaar and Ex-President, Bajaj Auto - Two-wheelers, Domestic Sales, “I don't think it impacts us negatively at all. We do not look at vehicles beyond eight or nine years. We are focussed on the scrappage value which will be credited to the customer.” “We expect the customer to invest in a new vehicle and especially when there is a demand for electric two-wheelers. The scrappage policy can prove to be a useful push for our business,” he opined. Admitting to it being early days to gauge the impact of the rollout in-depth, Kantheti
AUTO COMPONENTS INDIA n SEPTEMBER 2021
drew attention to the pilot commencing in select pockets ahead of a national rollout.
The marketplace dynamics
Bike Bazaar earns 65 per cent of its business from the rural districts. This is expected to go up to 75 per cent by 2026. “So we have to see how the scrappage policy will impact rural areas, and how the government will be able to enforce it beyond the urban metros. It'll be great if we're able to do it actually,” he quipped. As per Kantheti, the phase-wise implementation will kickstart from tier-1 cities and based on the success of the pilot be extended to tier2 and tier3 regions. “It will take a good amount of time for the scrappage policy to function across the country seamlessly,” he opined. Kantheti explained the impact on the components availability and aftermarket ecosystem. It is expected that scrappage policy will result in increased domestic availability of critical parts and raw materials known to be imported on a large scale. “The scrappage policy will help in generating widespread availability of components like electric fitments. Careful removal can result in making them fit for use in new vehicles,” he explained. He deemed that public response to the policy will be instrumental in the success or failure. One can expect these incentives to get better as the policy and its functioning mature, he said. WWW.AUTOCOMPONENTSINDIA.COM
