SA NEEDS a SCRAPPAGE scheme
Morocco’ s automotive industry continues to innovate, challenging South Africa as Africa’ s automotive hub.
Stellantis has invested € 1.6 million to create its third global dismantling centre in Casablanca, enabling downstream value recapture at a time when global automotive supply chains are under pressure.
This new Casablanca facility becomes the third Stellantis global dismantling centre, adding capacity to the facilities already established in Turin and São Paulo. With a capacity to dismantle 10,000 vehicles per year, Stellantis will source vehicles for the Casablanca facility from insurance companies, auctions, and End-of- Life Vehicle( ELV) channels for dismantling.
UPCYCLING MATERIALS AND PARTS
In a global automotive supply chain where copper and other metal prices are high, the opportunities presented by a dismantling centre make sense.
Remanufactured parts can generate revenue, take pressure off the supply chain, and help manufacturers improve their sustainability scores. Engine, drivetrain, and safety components are increasingly a significant build expense and salvaging those parts for remanufacturing is clever manufacturing economics.
But why has Stellantis chosen Morocco as its location of choice for dismantling centres in Africa, when South Africa has deeper automotive expertise? The potential for targeted dismantling in South Africa, with its vast legacy car parc and ageing vehicle fleet, is significant.
Crash-damaged vehicles are a primary source of feedstock for dismantling centres. South Africa has an extensive downstream industry of independent vehicle breakage and scrap parts recycling yards. This is where most of the South African fleet that has aged out or is crash-damaged goes for dismantling and parts recycling.
SCRAPPAGE SCHEMES MATTER
A major barrier to developing the South African dismantling industry is the absence of localised scrappage schemes. These scrappage schemes are a powerful end-of-life-cycle environmental intervention by governments in North America and Europe.
Scrappage schemes create a cash incentive for private vehicle owners to scrap aged-out vehicles rather than repair them. Using the scrappage payment toward a newer, better-equipped used vehicle.
What could a localised scrappage scheme do? It would create a valuable market, improve road safety by removing agedout vehicles from South African roads, and empower South Africa’ s industrial activity by creating feedstock for the local remanufacturing industry.
The other issue with an OEM investment in vehicle dismantling in the South African market is sourcing crash-damaged insurance vehicles. Code 3 vehicles that have suffered significant structural damage are often repaired and illegally reclassified as used vehicle stock for sale as Code 2.
Crash-damaged vehicles that should become feedstock for dismantling and remanufacturing are being intercepted and recycled as used-vehicle stock. This unregulated market has entrenched interests and has proven difficult to counter. A comprehensive scrapping incentive for old vehicles and the creation of a regulated dismantling industry would be much more beneficial to the South African economy.
WORDS IN ACTION 36 MAY 2026