Today, more Auto Recycling Facilities are becoming sophisticated by adopting technologies and upgrading facilities that offer seamless end-to-end dismantling of ELV, yard management services, and recovering, and repurposing. They are connected to metal recyclers and refurbishing companies that are heavily invested in getting green parts from ATFs.

Although even today, there are many dismantlers where scrapping is preferred by many car dismantling companies because it is mostly easier to scrap the vehicle than put the effort to dismantle and lack of awareness about new tools and technologies. This applies especially to End-of-Life Vehicles because there is very little value seen for used parts in that scenario, which is gradually changing worldwide.

Many car dismantling facilities or ATFs send it directly for scrapping for metals, and other materials. But now, due to the adverse effects on the climate due to landfills caused by the scrapping of vehicles, the government is imposing regulations for encouraging the extraction of used parts from old cars and the use of refurbished parts, so that economies can contribute to the circular concept.

So, let’s understand why Scrapping Vehicles was preferred.

Or let’s say why the Dismantling of ELV was avoided.

• Recovery of Green Parts is expensive
• A general assumption that ‘Scrapping is Cost Effective than Dismantling’
• Low profitability was generally a problem with dismantling cars for profit
• Extraction of parts from an ELV is man-power intensive
• Dismantling cars for profit requires trained manpower, expertise & experience
• It is a time taking process, indirectly affecting the cost of procurement of used parts
• Not knowing which parts to extract would be beneficial or profitable
• Car scrapping offers dismantlers revenue from metal recycling
• Bulk selling of scrap cars is beneficial for Auto Recyclers & yard management

These are a few reasons – why scrapping was more convenient. And now with increasing awareness about auto recycling and new methodologies and technologies, dismantling for profit and used part selling is a growing business avenue.

Why Dismantling of ELV Should be Encouraged?

• Increasing Need for Green Parts
• Environment Friendly and contributes to a circular economy
• The landfill will decrease, as more used parts will be recovered and extracted for repurposing, refurbishing, and recycling.
• Helps Dismantlers optimize profits from used parts selling
• Reducing unauthorized crushing of vehicles
• Global demand for the sustainable use of energy, and to reduce the emission of harmful gases into the environment is rapidly driving the need for efficient car recycling.
• Customer consciousness is increasing, and people are looking to reuse and recycle. They are looking to become environment friendly
• A younger generation of employees is also interested in sustainable innovations

With Automotive Industry being the 3^rd largest contributor to climate change and pollution, it is becoming more important to control how new vehicles are being manufactured, and how recycling can help control landfill.

Let’s see what the industry says

Car Dashboards and other interior components could soon be made from bioplastics, explains Wojciech Komala, Research, and Development Director said,

“We lower the carbon footprint by using bio-based sources. And by trying to develop lighter components for the cars.”

Source: BBC news article

A Study by eBay found that 71% of motorists would consider switching from installing new car parts on their vehicle in a bid to cut costs. Dr. Tony Tong, Head of Automotive at eBay UK, said:

“As budgets continue to tighten across the country, motorists will understandably look to save money where they can, and eBay’s certified recycled items are the perfect solution. They are typically 70% cheaper than new items and are kinder to the environment by recycling existing components. Most importantly, all VRA Certified items meet strict quality standards, so buyers get peace of mind, as well as saving money.” 

Explore some challenges faced by the industry here.

European Commission is the Flag Bearer for Green Parts

European Commission proposes a 55% cut in CO2 emissions from vehicles by 2030 and a 100% cut by 2035, making it nearly impossible to sell fossil-fuel-powered vehicles in the European Union.

In addition, carbon taxes are being imposed, incentives are offered through carbon points by the government to encourage dismantling and recycling auto parts. For the same, Dismanto – A platform by Gateway Group enables dismantlers and Auto Recyclers to gain carbon points by optimizing dismantling processes and allowing dismantlers to save on costs and explore dismantling for profit.  Now, you can gain carbon points and know how much incentive you can make by considering recovery and sale of ‘GREEN Parts’

Our Strategic Advice for Adoption of Sustainable Practices

Long term Strategy

A strategy that works in the long-term interest of an Auto Recycler becomes the foundation for considering sustainability in every process and function. Thus, making the long-term objective of being sustainable and truly circular.

Using Technology

We are enabling Auto Recyclers and Dismantlers with state-of-the-art software solutions helping them increase their visibility and transparency to be more sustainable by providing end-of-end ELV management or DMS for Authorized Treatment Facilities.

Track & Measure Emissions

Knowing and using relevant data to implement sustainable strategies is the need of the hour. Here, technology can give us insight into the right parts to extract as green parts and reduce emissions. Knowing emissions can also help gain carbon points and higher satisfaction among customers concerned with the environment.

Collaboration & Ideation

Learning from others always helps, and that is our value system at Gateway Group. We believe in collaborating and helping companies become sustainable and profitable at the same time. We implement sustainable practices with many businesses across the globe, where our innovations and technology experience have been instrumental in making some businesses sustainable and profitable.  

Let’s Collaborate to Become Sustainable

We are encouraging dismantling through innovation, where expensive processes can be optimized and costs can be reduced by having business intelligence. Having an end-to-end ELV management system or popularly known as Dismantling Management System i.e. DMS, we are enabling Auto Recyclers with insights like no other.

Unlike other dismantling systems/ DMS, we are offering Auto Recyclers a new-age solution, which gives you absolute flexibility to create your processes, set your pricing mechanism and manage your yard and inventory efficiently along with unique features like parts identification and assisted car inspection, making it configurable and highly scalable. Learn more about the platform with our ELV experts.

We would love to hear from you. Share your opinions or comments with us, we always look forward to a discourse.

The post Why Dismantling of ELV should be Encouraged Over Scrapping? first appeared on .

Today, technology is instrumental in radically changing the way various businesses operate. On the other hand, economies are also changing dramatically, with more sustainability-centric policies and digitization, resulting in the automation of processes and labor. Similarly, the Automotive domain is also moving towards a more sustainable approach. Primarily, because the Automotive industry is one of the largest sources of pollution in the environment. Also, research predicts that Automotive Industry will be vulnerable in 2023, due to the energy crisis and slow global demand, and disruptions in the global supply chain. These aspects will also have a direct impact on the Auto Recycling industry, we will explore the same in the context of End-of-Life Vehicle Management.

Presently, trends in the automotive industry for new vehicles are witnessing the adoption of autonomous driving, diverse mobility, connectivity, and sustainable solutions. Whereas, the second-hand vehicle market is also seeing a paradigm shift. Where Auto Recyclers from European and North American Countries are now focusing on and seeking advanced technology solutions to contribute to the Circular Economy Model through Recycling. Reusing. Reselling.

Let’s Explore the Key Challenges of End-of-Life Vehicle Management

Knowledge & Awareness Amongst Recyclers

The Auto Recycling industry usually has types of auto recyclers, and there is much that overlaps, considering the process of dismantling is extensive. Some auto recyclers see ELVs as a source of Second Hand Parts that can be reused or recovered. And others who use ELVs as a source of raw materials like metals and circular plastics. The latter, generally lack the know-how for recovering parts or plan to sell car parts. Also, the industry’s reputation is affected by issues with licensing and enforcement of laws and suffering from the brunt of the underground economy for used parts.

Many of these auto recycling facilities or Authorized Treatment Facilities are old businesses, therefore very conventional. Also, most decisions are based on manual operations, leading to inaccuracy in part valuation and car valuation, and resulting in disappointment at a profit level and also customer satisfaction level. At times, this is also due to less awareness of the market. And sometimes, the employees at these facilities lack the awareness to use technology to better their processes. Thereby, affecting the circular income flow.

Demand & Supply of ELVs Affecting Profit

For the Auto Recycling Industry, ELVs are a main source of raw materials and recycled auto parts and have a significant impact on the overall size of the Auto Recycling Market. The supply of ELVs is dependent on many factors, but not all attrition vehicles go for disassembly. Most ELVs are scrapped and directly sent to the Metal Recycling Industry or Other Auto Recyclers. Then, there are exports of ELVs and acquiring at auctions by Auto Recyclers.

It is known what ELVs acquired by Auto Recyclers are indirectly linked to the Auto Recycling Industry’s profit and available yard space. These ATFs or Recycling Centers get rid of older ELVs in order to free up space and acquire newer ELVs and manage space in their yards. This results in selling vehicles at a cheap cost and not extracting the true value of the used car or its used car parts which may have been profitable if managed better. Here, the demand for ELVs, driven by the number of Auto Recyclers is a major determinant for the ELV cost of purchase which in turn affects the industry profit.

More Scrapping than Recovery

Recovering a part from a used cars is rather more expensive and energy-intensive than scrapping the car. Usually, scrapping was preferred by many dismantlers up until now over recovering and reusing parts. So, it is safe to say that scrapping a car looked always easier and more profitable for a dismantler or an auto recycler. This often happens in case the facility has reached its maximum capacity for keeping ELVs.

However, with the recovery of used parts, reusing and recycling can be encouraged i.e., used parts selling, which will eventually take up less space in the yard. Also, over the years, we have seen a considerable rise in used part selling. But the challenge with recovery is not having the knowledge of which parts to extract from a car. Also, there is no structured way to decide which part to extract maybe partially, or consider the depreciating value of the parts in the car at the yard.

Decision Making based on Manual Parameters

Today, Auto Recyclers estimate vehicle parts value based on their understanding and experience with End-of-Life Vehicles and recycled auto parts. But that does not necessarily give them accurate pricing and value that can be fetched from a used car part or an entire used car. Because these decisions are usually on-the-go and also sometimes with the idea of freeing space in the yard, and that results in low-margin selling. This also becomes another reason for the problem with profitability in this industry. Because there is no standardized way to value your parts and end-of-life vehicle management.

Moreover, there is less insight into what parts can be recovered, without having to manually dismantle the car, which is a time and effort-taking process. “Objective Decision making based on analytics and insights can be the game changer for this industry,” says the Co-Founder of Dismanto, dismantling cars smartly.

“Objective Decision Making based on analytics and insights can be a game changer for the Valuation of Used Car Parts and Used Cars. It will enable ATFs to make their businesses profitable which is a challenge because most of their decision-making is based on manual parameters at the moment.”

Co-Founder – Indrajeet Mitra, Dismanto – A Gateway Group Co.

Yard Space Shortage

From our conversations and learnings from various dismantlers, we have developed this learning that many facilities suffer from premises management, and that stocking of ELVs and congestion management can be challenging.

Storage or (ELV) End-of-Life Vehicle Management requires space, and a separate warehouse is required for the storage of recovered vehicle parts. This results in dismantlers and disassemblers from scrapyards carrying large inventories for both ELVs and parts. They have to constantly adapt their facility size to maintain profitability, which means expanding their facilities but also shrinking which is highly dependent on the uncertain demand patterns of the ELV supply. This affects the industry’s turnover and maintaining profit is hindered. The industry’s reputation is affected drastically because of issues with licensing and enforcement.

Find out with our ELV experts, how you can combat these challenges at your Authorized Treatment Facility and improve End-of-Life Vehicle Management.

Talk to Our Experts

Energy Crisis & Climate Change – The Driving Forces of the Auto Recycling Market

In recent times, climate change and the energy crisis, have driven the Automotive Industry to take every step with sustainability in mind and choose a circular economy model. While we understand that the Automotive Industry is choosing to be more sustainable, Auto Recycling facilities are still struggling with the above-mentioned challenges. And some businesses are learning and using new-age methods and technologies to segregate material waste, treat residue and become more environmentally friendly. The concept of ‘Green Parts’ is picking up i.e. recovered used vehicle parts. Strategies to reduce CO2 emissions and landfills are being explored and discussed.

Europe, in particular, is going through some massive changes in policies and setting the bar for auto recycling worldwide, particularly France, the United Kingdom, Spain, and Italy. The End-of-Life Vehicles Directive was adopted by the European Commission in 1997 to tackle waste created by End-of-Life Vehicles (ELVs).

To take this Directive into account, many ATFs i.e., Authorized Treatment Facilities are investing in their processes and adhering to the EU guidelines for ELV i.e., End of Life Vehicle Processing. Here, reduced raw materials consumption, reduced energy consumption, reduction of CO2 emission, reduction of materials sent to landfill, creation of local and skilled jobs, and new manufacturing techniques are the driving factors of Auto Recycling.

Summing Up

The government and independent aftermarket are taking measures to combat climate change. And under the umbrella of the Automotive Industry, the idea of a circular economy is up to speed, and more businesses are now investing and preparing their strategies to be aligned with Auto Recycling.

Recycling auto parts and used cars is a flourishing avenue for Automotive Industry.

Stay tuned to learn more about Auto Recycling with the ELV experts from Team Dismanto.

Source Credit:

sciencedirect.com

openresearch-repository.anu.edu.au

researchgate.net

The post Brewing Challenges of End-of-Life Vehicle Management (ELV) first appeared on .