According to CRI analysis, vehicle consumption becomes increasingly popular in China with the development of economy and increase of income. China had ranked first in vehicle production and sales volume for twelve consecutive years from 2009 to 2020. And the vehicle reserves keep rising. China’s vehicle reserves reached 254 million at the end of 2019, ranking second in the world. It is estimated that China will surpass the U.S. to have the largest vehicle reserves in the world in 10 years. As the average vehicle age increases, scrap vehicle recycling has become one of the social concerns. On the assumption that the service life of passenger vehicles is between 8 to 10 years, the number of scrap vehicles had exceeded 7 million by 2020 and will grow at an annual rate over 10%. However, only 1.95 million scrap vehicles were recycled in 2019. Many scrap vehicles are still being used or were illegally disposed. For example, some of them were reassembled or refurbished to be sold as second-hand vehicles.
Owing to the poor industry regulation, legal scrap vehicle disposal has been affected by the illegal one. China’s annual recycling volume accounts less 1% of the vehicle reserves, which is much lower than 5%-7% in developed countries. Because of the quota on the number of scrap vehicle recyclers, the numbers of registered scrap vehicle recyclers and recycling outlets were 800 and 3000 respectively at the end of 2020, having a wide gap with the fast-growing number of scrap vehicles. According to CRI analysis, in 2020, due to the outbreak of the COVID-19 epidemic, it will have a certain impact on China’s automobile manufacturing industry. In order to promote car sales, the Chinese government has issued a series of measures to encourage scrapping old cars and buying new cars. Therefore, the outbreak of the epidemic has promoted the development of China’s auto scrap industry to a certain extent.

Reference: Research Report on China’s Scrap Vehicle Recycling Industry, 2021-2025

The post Number of Scrap Vehicles in China Exceeded 7 Million by 2020 first appeared on CRI Report.

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%.

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