All about Maruti Suzuki-Toyota’s new plant in Noida
The operator of the baler, a hydraulic press that crushes and shapes the body of a car into a metal cube, says a little prayer as he turns on the machine. In less than a minute, the press crushes the chassis and transforms the body into a crumpled metal cube, marking the final stage of the end-of-life vehicle (ELV) dismantling process at Maruti Suzuki and Toyota’s new MSTI plant Tsusho Group. in Noida, on the outskirts of Delhi.
The crushed frame is then sent to steel mills, which process it in a foundry to eventually extract the steel and turn it into billets for use as construction inputs. But steel isn’t the only material that comes out of a scrapped car. Other major components include aluminum and copper, in addition to parts such as batteries and electronic systems that the company sells as is to recyclers.
The plant is a step in the direction of a government initiative to institute a circular economy in the automotive sector, primarily with the aim of shifting the disposal of end-of-life cars from a largely unorganized setup to the side organized. ensure environmentally friendly dismantling of these ELVs.
The Noida-Greater Noida belt is becoming a hub, with the 10,993 m² Maruti Suzuki-Toyota Tsusho facility which has the capacity to scrap and recycle more than 24,000 ELVs per year within a radius of 10 kilometer(s) from MMRPL, a joint venture between Mahindra and the state. – owned by MSTC Limited, which has set up one of the first automatic shredding plants in India operating from Greater Noida in a campus spread over five acres.
As part of government policy, automated test stations and disposal facilities such as the MSTI and MMRPL are to be set up in phases, with plans to set up 50-70 disposal facilities vehicles over the next 4 to 5 years. The policy offers a number of incentives for scrapping vehicles, including a 5% discount on the purchase of a new vehicle, a discount of up to 25% on road tax and a waiver of fees vehicle registration.
As of April 1, the government notified the relief of the tax on motor vehicles for the vehicle registered against presentation of a “certificate of deposit”.
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Although the remaining incentives have yet to be announced, they are expected to be among the key drivers initially driving EVV owners to organized scrapping units instead of simply dumping the cars by parking them on the streets of a city or taking them to unorganized vehicle wreckers. – which generally have better economy on the process than their formalized counterparts.
From a sentimental point of view, a car demolished and then crushed into a cube of metal is generally perceived as a painful visual experience for owners.
But the first car that rolled into the MSTI facility – a red WagonR – was driven by Atul Jain, a Noida-based legal professional, with great enthusiasm, filled with dhol players to add to the atmosphere. The stories of Jain and baler operator MSTI are proof that Indians attach emotional value to their vehicles, especially those they have owned for over a decade.
Incentives in the form of tax exemptions are very attractive, but some of them are still being worked out in practical terms.
Obstacles remain
One of the biggest challenges facing formalized vehicle scrapping units is competition from their informal counterparts, who derive better economic results by deploying a less meticulous process. For formal units to be sustainable in the long term, MSTI officials said, a minimum scale of operation will be required. And for more people to bring their vehicles to these units, several different stakeholders — including the Center, state governments and automakers — will need to come to an agreement on the incentives provided. Recycling end-of-life vehicles also promises a greater contribution to the circular economy and the potential recycling of high-value goods like semiconductor raw materials in the future.
There are four main processes:
Vehicle collection: These end-of-life vehicles are either collected from the customer and taken to the Noida scrap plant, such as Jain’s WagonR, or purchased through dealerships.
Depollution: After the battery is removed, engine oil, transmission oil, brake oil, coolant are drained without any waste; Freon AC gas is recovered from the vehicle without any release into the atmosphere. This is where the disposal facilities of the organized sector are markedly different from those operating in the unorganized sector, where much of this oil and gas is largely discharged into the open.
Dismantling: All parts except the body are gradually removed: the engine, transmission and all body parts, panels, plastic components, goggle suspension parts, mufflers, etc. The chassis number is cut and retained according to government guidelines.
Extraction of recycled materials: Materials are separated into ferrous, non-ferrous, plastic and disposed of by authorized recyclers. The crate, once crushed by the baler, is then transported to the steelworks.
The economics of the process are still evolving and would need political support to bridge the price advantage enjoyed by the unorganized segment. While the price varies between Rs 25,000 and Rs 80,000 per vehicle that MSTI pays owners, the unorganized sector tends to pay more. But the catch is the incentive on the new vehicle, which MSTI Managing Director Masaru Akaishi says is attracting more customers. In addition to owners getting a scrap value of around 3-5% of the ex-store price of new vehicles, there is a zero registration fee for buying a new vehicle.
States are also being persuaded to provide up to 25% and 15% road tax reductions for personal and commercial vehicles, respectively, but many of these proposals are still on the table. Automakers are being pressured to give up to 5% off the purchase of new vehicles, which is tricky for automakers at a time when pressure on input prices is weighing on margins.
According to the Ministry of Road Transport and Highways, India has about two crores of vehicles over 20 years old, the most in Karnataka, followed by Delhi, Uttar Pradesh, Kerala, Tamil Nadu and Punjab. . Most of the organized scrapping centers are around automobile hubs, like Noida-Greater Noida and Gujarat Auto Belt.
According to the Union Government, there are nine functional vehicle scrapping centers in the formal sector – eight in the Delhi region and one in Chennai.