India: Tata Motors to set up vehicle scrapping unit in Gujarat

India's leading automobile manufacturer, Tata Motors Limited, has signed a memorandum of understanding (MoU) with the state government of Gujarat to set up a registered vehicle scrapping facility (RVSF) in Ahmedabad, SteelMint learned from latest news reports.

This agreement is in line with India's aim to increase domestic scrap metal processing capacity and reduce dependency on scrap imports. This new facility, having a capacity of 36,000 vehicles per year, will generate steel scrap by recycling end-of life passenger and commercial vehicles. The company will set up this facility in association with a partner, it said at an investors' summit.

Commenting on this, Girish Wagh, Tata Motors' Executive Director and President of Commercial Vehicle Business Unit, said, "We are delighted to support this initiative through a partner... It is indeed a historic step for Tata Motors as the company announces its participation in the vehicle scrapping space. Appropriate scrapping of end-of-life vehicles will have sustained benefits for the ecosystem stakeholders and the environment alike."

Development of this scrapping unit will also help reduce the import bill for scrap and crude oil, open job opportunities for MSMEs, boost new vehicle sales for OEMs and lower operation costs for vehicle owners.

Ports and the transport department will help in facilitating the necessary approvals as per the rules and regulations of the Gujarat government and the draft Vehicle Scrappage Policy released by the Ministry of Road Transport and Highways for setting up of this unit.

Besides Tata Motors, the Gujarat government has also inked pacts with other companies, including CMR-Kataria Recycling Private Limited, Cero-Mahindra MSTC Recycling Pvt Ltd, Modest Infrastructure Pvt Ltd, Mascot Engitech Private Limited, and Mono Steel India Limited to build their vehicle scrapping units in the state.

Maruti Suzuki India Limited (MSIL), India's biggest automaker, is also planning to set up a vehicle dismantling and recycling unit in Noida, Uttar Pradesh, in collaboration with Toyota Tsusho Group, as per latest reports. This is expected to be operational by the end of FY'22.

It should be noted that the vehicle scrappage policy was launched by Prime Minister Narendra Modi on 13 Aug'21.