Automotive parts remanufacturing involves disassembling, inspecting, cleaning, repairing and replacing worn components of vehicles and engines to restore them to original equipment specifications. Some key remanufactured automotive components include engines, starters, alternators, transmissions and turbochargers. The process allows to reduce production costs and extend the usable life of vehicles by 2-3 times while being more environment friendly as compared to manufacturing new parts from scratch. With the rising environmental awareness and increasing costs of new automotive parts, more consumers and fleet owners are preferring remanufactured components.
The Europe automotive parts remanufacturing market is estimated to be valued at US$ 15.34 Mn in 2023 and is expected to exhibit a CAGR of 38% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Growth in the number of aged vehicles: The average vehicle age in European countries has consistently increased over the last decade which has led to a rise in demand for replacement of worn-out parts. As per International Organization of Motor Vehicle Manufacturers, average age of light commercial vehicles on road in Europe increased from 10.6 years in 2015 to 11.4 years in 2020. This growth in number of aged vehicles is a major driver of the automotive remanufactured parts market.
Increasing demand for cost-effective components: Original equipment automotive components prices have witnessed a significant increase over the years. Remanufactured parts provide a cost-effective solution as they are priced 30-50% lower than new parts while offering similar performance and warranty. This value proposition is attractive especially for commercial fleet owners, thereby driving market growth.
Segment Analysis
The Europe automotive parts remanufacturing market is dominated by the powertrain sub-segment which accounts for over 30% market share. Engine and transmission components constitute a major portion of automotive parts that are remanufactured as they experience high wear and tear during regular vehicle operation. The powertrain also represents one of the most expensive systems of a vehicle, making it cost-effective for customers to opt for remanufactured engine and transmission components rather than completely new ones.
PEST Analysis
Political: Stringent vehicle emission norms enforced by regulatory bodies are encouraging the adoption of remanufactured components which perform at par with new ones while being more affordable.
Economic: The automotive aftermarket in Europe is driven by the need to control ownership costs through lower maintenance and repair expenses. Remanufactured parts fulfill this need through significant price savings compared to original new parts.
Social: Growing environmental consciousness among customers is increasing demand for sustainable alternatives like remanufactured parts that extend the life of existing components through refurbishment.
Technological: Advanced remanufacturing techniques help restore components to like-new conditions through precision engineering processes, ensuring high quality and reliability.
Key Takeaways
The Europe Automotive Parts Remanufacturing Market Share was valued at US$ 15.34 Bn in 2023 and is anticipated to reach US$ 21.12 Bn by 2030 expanding at a CAGR of 38%. The UK dominates remanufacturing activity in Europe accounting for over 25% market share in 2023. Strong automotive aftermarket and emphasis on reducing vehicle repair costs are driving demand in the country.
Regional analysis
The UK leads the European market for automotive parts remanufacturing with over 25% share due to a large and well-established automotive aftermarket sector. Germany ranks second with over 20% share mainly attributable to stringent automotive emission norms that incentivize the adoption of green alternatives like remanufactured parts.
Key players
Key players operating in the Europe automotive parts remanufacturing market are AnaSpec, Incoatec GmbH, Remy Power Products, LLC., Cardone Industries, A1 Cardone, Jasper Engines and Transmissions, Caterpillar, and Delta International Plant.