In a move that combines technological innovation with environmental stewardship, Mahindra's vehicle recycling venture is transforming India's automotive waste management landscape.
05 Feb 2025 | 2717 Views | By Shahkar Abidi
When Mahindra Accelo began planning its first vehicle recycling facility in 2017-18, the company took a methodical approach. The leadership team traveled extensively across Europe, Japan, and the United States to study the most advanced end-of-life vehicle recycling technologies.
Their goal was not just to replicate international best practices, ...
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When Mahindra Accelo began planning its first vehicle recycling facility in 2017-18, the company took a methodical approach. The leadership team traveled extensively across Europe, Japan, and the United States to study the most advanced end-of-life vehicle recycling technologies.
Their goal was not just to replicate international best practices, but to adapt them to India's unique landscape. The resulting venture, a partnership with the Government of India's MSTC, came to be known as Mahindra CERO, incorporating technology into every aspect of the recycling process.
The company's Lean Management System (LMS) and IT integration are designed to scale with minimal workforce requirements. "Every new recycling centre seamlessly integrates into our existing IT network," explains Sumit Issar, MD of the company. “From the moment a customer reaches out, everything is digitalised." Vehicles are inspected online, collected, processed, and recycled under a transparent, fully compliant system.
For its first plant in Greater Noida, Mahindra had to import machinery since local production of the necessary high-tech equipment was non-existent at the time. "We wanted a state-of-the-art facility from day one," Issar recalls. However, this dependence proved temporary. "We've now developed the capability to manufacture these tools and systems in India. Not only have we localised production, but we've also drastically reduced costs. To put it into perspective, what initially cost us Rs 100 for our first plant, now costs less than Rs 10." He further added.
Mahindra CERO's broader ambition to lead India's nascent vehicle scrappage industry. The numbers support their vision. India produces approximately 26 million vehicles annually, including passenger cars, commercial vehicles, and two- and three-wheelers. Moreover, an estimated 28 million vehicles over 15 years old are currently on the roads, with at least 2 million requiring recycling each year—a figure expected to grow.
Customers who recycle with Mahindra CERO receive more than just the scrap value of their vehicles. They also obtain a Certificate of Deposit (COD), which provides significant financial benefits, including discounts on registration fees, road tax reductions, and manufacturer incentives for purchasing new vehicles. "For an average car priced at Rs 5-6 lakhs, these benefits can amount to Rs 75,000 to Rs 1 lakh," Issar notes, making it an attractive proposition for consumers.
Keeping it Inhouse
Currently operating eight facilities across 41 cities, Mahindra CERO plans rapid expansion, targeting 100 cities and planning 25-30 new facilities over the next three to five years. Central to this strategy is their company-owned model, which Issar believes ensures compliance and builds customer trust.
Unlike competitors who have adopted a franchise-based model, Mahindra CERO has chosen centralised, companyowned operations. Issar emphasises the advantages of this approach: "Franchisees often lack the resources to invest in automation or scale operations effectively. By centralising, we maintain synergies across IT platforms, processes, and quality standards."
According to Issar, scaling this business requires substantial capital investment and strict compliance measures. He doesn't anticipate many unorganised players entering the market at scale. "Competition will exist, but efficiency and automation will set us apart. With years of experience refining our model, we're prepared to lead the industry…Our goal is to create a fully organised industry, distinct from the informal players who dominate the market today," he says. As the market leader, CERO has the capacity to recycle 3,00,000 vehicles annually. "We are expecting to reach closer to 1,00,000 vehicles getting recycled within the next year in view of the upcoming EPR policy," the company management stated.
The industry faces several challenges. Traditionally, older vehicles in India have either been scrapped informally or passed down to smaller towns, extending their lifespans. Cultural factors also play a significant role, as vehicles are often considered assets with sentimental value, with families keeping them for 15-20 years.
Government policies have influenced the industry's growth rate. When Mahindra CERO began operations, no formal vehicle recycling policy existed in India, unlike the structured frameworks found in developed nations. While the introduction of Extended Producer Responsibility (EPR) regulations—requiring automakers to ensure proper recycling—represents progress, the industry remains in its early stages. However, with the recycling market projected to grow into a $6 billion industry within three to five years, the future looks promising.
As a first mover in this space, Mahindra CERO aims to capture a 50% market share, with plans to recycle 1 million vehicles annually, within the next two years. Its network of ecosystem plants, strategically located throughout the country, supports this goal.