Analysis on Scrap Vehicle Recycling Market in 2019
Automobile consumption has become a hot spot on the market since 2018 when the sales volume of automobiles in China declined for the first time over the past 28 years. The production and sales data in Jan. 2019 was also depressing. According to the China Association of Automobile Manufacturers, the sales volume of automobiles in Jan. 2019 was 2,367,300 units, decreasing by 15.76% YOY. In particular, the sales volume of passenger vehicles decreased by 17.70%
Research Report on China’s Scrap Vehicle Recycling Industry, 2018-2022
The replacement of automobiles will inevitably lead to vehicle scrapping. The Draft Revision of the Regulations on Motor Vehicle Recycling Management (“the draft revision”) passed by China’s Executive Meetings of the State Council breaks government monopolies and makes the scrap vehicle recycling market accessible to all eligible enterprises. The scrappage scheme and local subsidies advocated by the draft revision will stimulate automobile consumption. The draft revision encourages local governments to grant appropriate subsidies to those who buy a new vehicle and apply for scrapping a vehicle that meets China I to China III emission standards.
Research Report on China’s Scrap Vehicle Recycling Industry, 2018-2022
Considering the production, sales and reserves of vehicles, the vehicle scrappage peak is around the corner. As China gradually replaced service life-based scrappage with mileage-based scrappage in recent years, the volume of motor vehicle recycling declined in 2016. From Jan. to Nov. 2017, the volume of motor vehicle recycling totaled 1,521,000 units, decreasing by 3.10% YOY. The number of recycled automobiles was 1,276,000, decreasing by 7.90% YOY; the number of recycled motorcycles was 245,000, increasing by 33.80% YOY.
Research Report on China’s Scrap Vehicle Recycling Industry, 2018-2022
The Internet Plus model has become a significant trend of the vehicle recycling and dismantling industry. Online platforms such as O2O-based Ezaisheng.com, Carcycle.cn, Apartsman.com, Chaichejian.com cooperate with qualified vehicle dismantling enterprises to dismantle vehicles in a “smart” way, recycle parts that used to be sold as scrap iron, and make better use of scrap vehicles.
CRI believes that the scrap vehicle recycling industry will see new development opportunities with the improvement of the policies, regulations and market, and expects that the number of scrap vehicles in China will exceed 13 million units in 2019 at a growth rate of more than 10%.
