Automobile Recycling in China Set to Grow

The “China End-of-Life Vehicle (ELV) and Dismantling Industry Report, 2018-2022” has been added to the offering of the market research store of the Irish company Research and Markets.

As reported, automobile ownership has been climbing steadily in China over the recent years, at a compound annual growth rate of 15.2 percent between 2010 and 2017. According to the forecast, it will continue to rise in the upcoming five years, up to estimated 313.1 million units in 2022, despite a decline in both production and sales in 2018.

As automobile ownership increases in China, more vehicles are due to be scrapped. As estimated, there were a total of 7.3 million end-of-life vehicles (ELV) in China in 2017, with a scrap rate of four percent, but a mere 30 percent of them were recycled, ResearchAndMarkets gave account. “In the first eleven months of 2018, 1.469 million ELVs were recycled in China, 15.1 percent more than in the same period of 2017, with the full-year recycling rate expectedly ranging at 20.0 percent.”

“Among 650 to 700 Chinese car dismantling firms for the moment, most are small sized with low annual recycling rate of ELV and scattered resources, though their dismantling networks already take shape,” the information said. “As yet, big players are Shenzhen GEM High-Tech, Jiangsu Huahong Technology, Miracle Automation, Henan Yuguang Gold & Lead, Tus-Sound Environmental Resources and Beijing Capital.”

Despite China boasts a huge number of ELVs, its scrap rate remains far lower than the level of six to eight percent in the developed countries, and a mere 0.5 to one percent vehicles out of automobile ownership are recycled compared with a staggering five to seven percent in developed nations. “That’s largely because ELV subsidies are directly given to vehicle owners but in small amounts, and professional dismantling firms buy their cars at a low price due to weak profitability, which leads to an influx of scrapped cars to the black market which offers a higher price,” the company described the situation. The forthcoming new version of the Measures on Management of ELV Recycling, a policy allowing recycling and remanufacturing of five automotive assemblies (engine assembly, steering assembly, transmission assembly, front and rear axles, and frame), would promote market growth. With the subsequent issuance of related rules, the ELV and dismantling industry were hoping to boom with output value hitting 43.43 billion Renminbi Yuan (editor’s note: more than 6.3 billion US-Dollar) and recycling rate at 24.5 percent in 2022.

Photo: Andi Karg

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