Ashok Leyland Seeks Stronger Scrappage Incentives for Fleet Renewal

Commercial vehicle major Ashok Leyland has renewed its push for stronger government incentives to accelerate fleet replacement in India, as the country continues to operate with an ageing commercial vehicle base.

The Hinduja Group flagship believes the current vehicle scrappage policy has not delivered the desired momentum and is urging more substantial financial support to drive large-scale adoption

“We thought the current scrapping policy would be enough, but apparently it is not. I can’t quantify how much incentive is needed, but it has to be quite substantial,” said Shenu Agarwal, Managing Director and Chief Executive Officer, Ashok Leyland.

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As part of its long-term strategy, the company is preparing to establish around six vehicle scrappage centres across key cities such as Ahmedabad, Chennai, Jaipur, and others, strengthening the scrappage ecosystem and encouraging the replacement of older fleets.

The new emphasis on modernization of fleet is coupled with the shift of Ashok Leyland to access the increased demand in the heavy commercial vehicles market. The company has also announced a comeback into the market of 2 of its most iconic trucks-Taurus and Hippo, last week with modern engineering and next-generation technology.

Commenting on market trends, Agarwal highlighted sustained demand in the commercial vehicle industry. "Till October, the demand was flat. We had always been saying that we are sitting on a fleet that is more than 11 years old. Historically, it was 7–8 years. GST 2.0 was one such trigger that helped the whole industry. The consumption economy is moving up, which is creating a lot of demand. It is a fundamental change in the industry, so it will continue for some time," he said.