China End-of-Life Vehicle (ELV) and Dismantling Industry Report, 2019-2025
Automobile ownership showed a CAGR of 14.7% in China between 2010 and 2018, and it will continue to rise in the upcoming years, up to 379.2 million units as expected in 2025, despite a decline in both production and sales over the past two years due to the burgeoning car share and ride-hailing software markets.
In such a huge automotive market, Chinese end-of-life vehicle (ELV) and dismantling market springs up. As estimated, there were a total of 8 million end-of-life vehicles in China in 2018, with a scrap rate of 3.5%; but a mere 30% of them were recycled, far lower than virtually 80% in the developed countries. In the first eleven months of 2019, 1.739 million ELVs were recycled in China, a like-for-like spurt of 18.4%, and with the full-year recycling rate expectedly hitting 21%.
Among 731 Chinese car dismantling firms announced by the Ministry of Commerce of China on June 21, 2019, most are small sized with low annual recycling rate of ELVs and scattered resources, though a national ELV dismantling network has already taken shape. Nowadays, competitive Chinese players are Shenzhen GEM High-Tech, Jiangsu Huahong Technology, Miracle Automation, Henan Yuguang Gold & Lead, Tus-Sound Environmental Resources and Beijing Capital.
China’s scrap rate remains much lower than 6% to 8% in the developed countries, and a mere 0.5%-1% vehicles out of automobile ownership are recycled compared with a staggering 5%-7% in developed nations. That’s largely because ELV subsidies are directly given to vehicle owners but in small amount, and professional dismantling firms buy ELVs at a low price due to meager profit, which leads to an influx of scrapped cars to the black market which offers a higher price.
On April 22, 2019, the State Council announced the Measures for the Management of End-of-Life Vehicle Recycling, a policy allowing the recycling and remanufacturing of “five assemblies” (engine assembly, steering assembly, transmission assembly, front and rear axles, and frame) which can be sold to enterprises with remanufacturing capabilities in the light of relevant national regulations.
Thanks to the above policy, ELV recycling and dismantling companies will be lucrative enough to compete with the black market. In the future, Chinese ELV and dismantling market will develop in an orderly manner, and the market size will be on a steady rise. The ELV and dismantling industry is hopefully to boom, with output value reporting RMB50 billion, scrap rate at 4.9% and recycling rate at 26.2% in 2025.
China End-of-Life Vehicle (ELV) and Dismantling Industry Report, 2019-2025 highlights the following:
Global ELV and dismantling industry (overview, development in main countries, and typical companies);
China renewable resource industry (policy, status quo, import & export, product segments, and forecast);
China ELV and dismantling industry (policy, upstream sectors, overview, market size, competitive pattern, summary and forecast);
14 Chinese ELV and dismantling enterprises (operation, gross margin, ELV business and development strategy).
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