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The Promising Scrapped Car Industry In China

2018-12-12 15:23 Wednesday

As the largest automotive market and with the second highest vehicle-ownership, the number of scrapped cars in China is projected to exceed 9 million by the end of 2018. Reuse of recyclable resources such as non-ferrous metals, precious metals, as well as plastic and rubber in scrapped cars, can reduce car manufacturing costs and environmental contamination.

Due to the cheap price of scrapped car recycling, many cars stay in operation even they have met retirement standards, which has resulted in a low recovery rate of 30% in China. The recycling rate of vehicle parts has reached 35% in developed countries, but in China the recycling rate is just 10%.

scrapped car recycling

In 2016, the State Council relaased the Decision on Amending Administrative Measures on the Recovery of Scrapped Automobile, a development that has been followed closely across the industry. Owners of scrapped cars can now negotiate the recycling price based on market conditions. This newfound consumer power should facilitate greater standardization and specialization within the automotive aftermarket.

The revised regulations will extend the criteria for the market entry of scrapped vehicle recycling enterprises, simplify application procedures, stimulate the use of vehicle scrapping  , promote environmental-friendly automotive consumption, crack down on the illegal car disassembly industry, and encourage consumers to apply proper  procedures.

The revised measures are expected to restructure China's scrapped car industry, that has thus far only achieved a 20% disassembly rate. The projected number of scrapped cars will reach 13 million in 2019, with an estimated market value of over 200 billion RMB by 2020.

Scrapped cars are an important source for many different materials. The scrapped car industry has been a consistent force in many developed countries, but the industry in China is hindered by the absence of standards, high barriers to entry, outdated business models and technology, and minimal innovation.

Considering the substantial trading volume of recycled vehicle parts in China, calls for industry standards have grown. Many listed enterprises have conducted electronic waste business, car and power battery disassembly, in addition to a wide range of other services.

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