India is one of the largest automobile markets in the world, with sales increasing every year. With this, even the number of vehicles to have reached their end of life is rising, which is leading to a wide volume of metallic, rubber, and plastic waste just strewn everywhere. Additionally, for want of money and lack of stringent regulations, many people continue to operate their vehicles beyond the recommended period, which leads to heavy emissions of greenhouse gases (GHGs) from an engine that has witnessed extensive wear and tear.
P&S Intelligence says that all these factors will propel the Indian end-of-life vehicle (ELV) and dismantling market from $3,474.0 million in 2019 at a 17.2% CAGR between 2020 and 2030 (forecast period). However, the biggest hurdle in the industry growth presently is the alleged monopoly of unorganized garages and scrapyards. For instance, the automobile scrapyard in Mayapuri, Delhi, which is the largest in Asia (it has an annual turnover of around GBP 600 million, as per The Telegraph), has 4,000 small-scale units working day and night, throwing all safety caution to the wind.
Since the order on the closure of such scrapping units, the influence of organized companies in the Indian end-of-life vehicle and the dismantling market is increasing. For instance, in November 2019, various subsidiaries of Indian auto major Mahindra and Mahindra jointly inaugurated an ELV dismantling plant in Greater Noida, Uttar Pradesh. This is to be followed by the setting up of 25 more such units across the country by 2022. That month, Toyota Motor Corp. and Suzuki Motor Corp. also entered a partnership to establish an ELV dismantling and recycling venture in the country.
The market is divided on the basis of fuel into petrol, diesel, and others, among which the diesel category held the largest value share in 2019. Diesel vehicles are shorter lasting than those using petrol and other fuels, thus account for the highest dismantling rate after their end of life. Moreover, a large number of passenger vehicles and almost all commercial vehicles run on diesel, which is cleaner, cheaper, and more powerful. This means that more diesel automobiles reach the end of their life than those using other fuels.
Thus, as more unorganized scrapyards are shut down and more ELVs are available, established companies are expected to carry out dismantling and recycling activities in the country, following globally accepted safety standards.
Source: P&S Intelligence