Tata Motors to build vehicle scrappage centres under franchise arrangement

Tata Motors is planning to set up vehicle scrappage centres under a franchise arrangement, and its first such centre is expected to become operational in the first quarter of the next fiscal. The company had earlier this year partnered the Gujarat government to support setting up of a vehicle scrappage facility in Ahmedabad.

About 25,000 trucks get dismantled every year in the country while there are no proper systematic scrappage facilities in the country. "We have tied up with a European expert and with his help, we have made a model scrapping centre… (and) we are going to deploy (this model) through franchise arrangement," said Tata Motors Executive Director and President - Commercial Vehicles, Girish Wagh during an online press conference.

Tata Motors has already started sending out a letter of intent (LOI) to the franchise partners to set up the scrappage facilities. The Ahmedabad-based scrappage centre will be developed for both passenger and commercial vehicles, and will have a capacity to recycle up to 36,000 vehicles a year.

Speaking about the sales outlook for commercial vehicles, Wagh said that the industry grew by 44 per cent in the first quarter and the company grew more than the industry. "We expect that GDP growth should be around 9-10 per cent this year as indicated by the RBI, we expect the industry to grow by about 20 per cent over the last year," he added.

The auto major is also looking to roll out new products in the commercial vehicles segment, including electric and CNG versions of various models.

About global chip shortage, he noted that Tata Motors is dealing with the issue on a day-to-day basis yet this could impact the company's production of small commercial vehicles and intermediate commercial vehicles going ahead.

(with inputs from PTI)