Vehicle Scrapping Market Size, Share, and COVID-19 Impact Analysis, By Material (Steel, Aluminium, Copper, and Others), By Vehicle Type (Passenger Vehicles and Commercial Vehicles), and Regional Forecast, 2024-2032

Vehicle scrapping, also known as vehicle recycling, is a process of dismantling and recycling end-of-life vehicles or old or unwanted vehicles. It involves collecting old vehicles, draining their fluids, carefully dismantling them to salvage reusable parts, and shredding the remaining vehicle shell to separate materials such as steel, aluminum, rubber, plastics, and others, for further recycling. Separation technologies such as laser, infrared, eddy current, and flotation separate the nonferrous metals from other materials and then send them for melting. In addition, the reused components shall be washed, tested, and repaired for resale.

The expansion of environmental consciousness and the implementation of rigorous emission regulations propel the growth of the vehicle scrapping market. Both governments and consumers alike are pushing for sustainable practices, leading to a rise in recycling and scrapping of end-of-life vehicles. Unfit vehicles creating pollution pose a significant barrier to the development of a country. Effective car scrappage policy will reduce pollution and give other benefits such as a greener environment and open opportunity for sales of new vehicles.

Government incentives and stringent global scrappage policy are significant drivers pushing the scrappage market. Mandating scrappage of vehicles after a fixed period and providing incentives such as tax rebates, discounts on brand-new vehicles, and offering zero registration fees to the owner of a new vehicle will fuel the market demand for vehicle scrappage market.

Impact of COVID-19 on the Vehicle Scrapping Market

The widespread COVID-19 outbreak has significantly impacted various industries, including the vehicle scrapping sector. In the initial phases of the pandemic, many nations implemented lockdowns and restrictions, creating economic uncertainty and reducing consumer expenditure. This led to decreased demand for new vehicles, reducing the number of cars in operation. The financial challenges and uncertainties stemming from the pandemic may have prompted some vehicle owners to postpone replacing their automobiles, extending the lifespan of vehicles and potentially augmenting the pool of older vehicles eligible for scrapping. Adopting remote work arrangements during the pandemic diminished the necessity for daily commuting for many workers. Consequently, certain individuals opted to defer decisions regarding vehicle replacement or scrapping, given their diminished vehicle usage.

However, the pandemic underscored the significance of environmental concerns, encompassing air pollution and climate change. This heightened awareness amplified interest in environmentally friendly practices, including vehicle recycling and scrapping. Throughout the pandemic, individuals displayed increased caution concerning the utilization of public transportation or shared rides due to health and safety apprehensions. This, in turn, bolstered the demand for personal vehicles, potentially impacting the number of vehicles available for scrapping.

Key Insights

The report will cover the following key insights:

• Key Industry Developments – Mergers, Acquisitions, and Partnerships


• Porter's Five Forces Analysis


• Technological Developments


• Impact of COVID-19 on the Vehicle Scrapping  Market

Analysis by Material

The market is segmented by material into steel, aluminum, copper, and others. As a material, steel is predicted to hold a larger market share. Steel is the most prevalent material extracted from vehicle scrapping. The body and structure of a car are predominantly made of steel, which is highly recyclable and in demand for various manufacturing processes. The increasing recognition of environmental challenges, encompassing the imperative to diminish carbon emissions and safeguard finite resources, has heightened the focus on adopting sustainability and circular economy principles. This has boosted the demand for recycled materials, including steel recovered from vehicle scrap.

Analysis by Vehicle Type

The market is segmented by vehicle type into passenger and commercial vehicles. The passenger vehicle segment will hold the maximum share in the scrappage over the coming years. Passenger vehicles typically have higher ownership numbers compared to commercial vehicles. As a result, the sheer volume of passenger vehicles reaching the end of their lifecycle is more significant, leading to a larger pool of vehicles eligible for scrapping. Additionally, passenger vehicles are more affordable than many commercial vehicles; hence owners might be more inclined to replace them with newer models rather than invest in costly repairs.

Regional Analysis

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In the upcoming years, the vehicle scrapping market is projected to be spearheaded by Asia Pacific. This region, encompassing nations such as China and India, has undergone rapid urbanization and notable economic growth. As individuals experience an uptick in income levels, there is an increased inclination toward vehicle ownership. The expanding middle class and enhanced living standards in the area have led to a considerable vehicle fleet expansion. As these vehicles age, a natural progression will occur, resulting in a higher number of vehicles nearing their operational lifespan and necessitating scrapping.

The region boasts the world's largest automotive manufacturers and markets. This robust presence within the automotive industry contributes to a substantial reservoir of vehicles, including older ones that eventually require scrapping. Numerous nations within the region have implemented governmental incentives and strategies aimed at encouraging vehicle owners to retire older automobiles and transition to vehicles that are more environmentally mindful. These initiatives are poised to invigorate the vehicle scrapping market in the future.

Key Players Covered

The report includes the profiles of key players such as ASM Auto Recycling Ltd., Copart Inc., Eco-bat Technologies, INDRA, Keiaisha Co. Ltd, Hensel Recycling Group, LKQ Corporation, Schnitzer Steel Industries, Scholz Recycling GmbH, and Sims Metal Management Ltd

Segmentation

Key Industry Developments

• July 2023 - Tata Motors opened a registered Vehicle scrapping facility in Bhubaneswar: The state-of-the-art facility uses environmentally friendly processes and can disassemble 10000 end-of-life vehicles safely and sustainably each year.


• April 2023 - From scrap to raw material: state-supported Car2Car project develops technologies to improve the recycling of end-of-life vehicles.


• January 2019 - Starting April 2023, all government-owned vehicles in India that are over 15 years old will be subjected to scrapping. This rule applies to vehicles owned by central or state governments, Union Territories, public sector undertakings, municipal bodies, as well as any entities owned or governed by the government.