The automotive parts remanufacturing process involves dismantling previously used parts and bringing them back to original quality specifications for reuse. Remanufactured automotive components mainly include engines, transmissions, steering gears, air-conditioning compressors, alternators, starter motors, and turbo chargers. Remanufacturing of core components helps in reducing waste, conserving raw materials, and lowering costs to both vehicle manufacturers and retail customers. Remanufactured parts are sourced from take-back programs, core brokers, dismantlers, and salvage yards. The repair, cleaning, inspection, disassembly, and replacement of worn parts are some of the key steps involved in the remanufacturing process.
The global Automotive Parts Remanufacturing Market is estimated to be valued at US$ 2541.81 Bn in 2023 and is expected to exhibit a CAGR of 14.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The growing demand for affordable vehicle maintenance is expected to drive the automotive parts remanufacturing market over the forecast period. Remanufactured parts can be sold at prices 30-50% lower than new parts, thus offering significant savings to vehicle owners. Moreover, with increasing vehicle age, there is a growing need to replace worn-out components which is fueling the demand for remanufactured alternatives. Another key factor propelling the market growth is the flourishing aftermarket for used vehicle components. Various parts retrieval programs launched by vehicle OEMs to retrieve cores from end-of-life vehicles also ensure steady supply of raw materials for the remanufacturing industry. However, availability of low-cost counterfeit parts and perceived lower quality and performance of remanufactured components pose challenges to market players. OEM certification of remanufactured parts has helped address quality issues and boost customer confidence over the years.
Segment Analysis
The automotive parts remanufacturing market is dominated by the engine and related parts segment. This segment accounts for over 30% of the total market share as engine and transmission components such as starters, alternators, engine components have the highest remanufacturing rates. These components experience high wear and tear during regular vehicle usage and require frequent replacements. Thus, they present lucrative opportunities for parts recovery and remanufacturing.
PEST Analysis
Political: Governments across regions are promoting green initiatives to increase reuse and recycling of resources. Favorable regulations support the growth of remanufacturing industry by incentivizing core collection programs.
Economic: Remanufacturing helps reduce the overall cost of vehicle ownership and maintenance. It provides high-quality substitutes at nearly half the price of new parts. This improves affordability and boosts the sales prospects of auto components.
Social: Consumers are increasingly conscious about minimizing environmental footprint. Remanufactured parts address sustainability goals by reusing existing resources. Their competitive pricing also influences purchase decisions.
Technological: Advanced diagnostics tools, 3D printing, robotics and AI enable precise disassembly and reconditioning of old components. They help enhance quality control and consistency in remanufacturing processes.
Key Takeaways
The global automotive parts remanufacturing market share is expected to witness high growth. Regional analysis indicates that Asia Pacific holds the major share currently due to strong vehicle parc and established core collection infrastructure in major countries like India and China. North America and Europe are other large markets spurred by initiatives to develop circular economy models.
Regional analysis related content comprises: Asia Pacific dominates the market with over 35% share as the region is home to key vehicle manufacturing hubs and has robust aftermarket channels. China, in particular, has emerged as a lucrative market owing to initiatives promoting automotive component rebuilding and domestic remanufacturing industry.
Key players operating in the automotive parts remanufacturing market are Robert Bosch GmbH, Valeo SA, ZF Friedrichshafen AG, Industrial Reprocessing & Salvage Inc., UCI International Inc., Athena Core, ATC Drivetrain Inc, Caterpillar Inc., Carwood Group, and LuK Uniformparts.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
