Techno World Automotive-Parts-Remanufacturing-Market | Page 2

In March 2018, the European Commission finalized its Circular Economy Package (COP) proposal
that was originally proposed in 2015, for the introduction of set of directives and laws designed
for the resource-efficient future of the European economies. The proposal details automotive
parts remanufacturing market as an integral part for the reduction of emissions and wastes
generated through end of life cycle of an automotive. Furthermore, with an estimated global
vehicle parc over 1.2 billion, an expected increase of demand at around 3% year-on-year over
the forecast period will present considerable requirement of raw materials for the manufacturing
processes. Inadvertently, lack of raw material resources and the growing costs of mining metals,
high carbon footprint on the environment due to high energy consumption, and water
requirement for the new equipment manufacturing will increase the demand for remanufactured
automotive parts over the coming years, thereby fueling growth of global automotive parts
remanufacturing market.
Trends expected to provide high traction to the industry growth include extended life of
components, advent of predictive maintenance, and IoT connectivity that increasingly
complement the repeated processing of vehicle components and engines. Growing concerns for
environment responsibility, potential opportunities in component costs reduction, reduced
resource security challenges, reduced lead time, secure spare parts supply, and increasing
consumer confidence are some of the major factors that enhance the profitability of the
participants. These factors are expected to provide strong growth opportunities for the global
automotive parts remanufacturing (reman) market.
Lack of adequate recognition by consumers and unfavorable regulatory policies in the
Asia Pacific economies are expected to hamper the overall industry growth
High competition from the vendors supplying recycled and repaired automobile body parts,
shrinking price differences between these portfolio and the original products, and extended
warranty of components are few factors restraining growth of the market. Moreover, lack of
consumer recognition of the differences between used and reman products, as the connotation
of the terminology is misconstrued, is another factor hindering growth of automotive parts
remanufacturing market. Availability of the product at 60% of the original equipment also makes
it difficult for vendors to overcome the consumer misconceptions regarding the product quality,
specifically in emerging economies. In conjunction with these parameters, many Asian
economies including India, have banned the import of cores, which forms the basic requirement
for a remanufacturer. These parameters are expected to cause significant roadblock to the
industry
growth.
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parts-remanufacturing-market-1498
Europe accounted for the second largest share of global automotive parts remanufacturing
market and is expected to hold its position over the forecast period. Industry participants have
established strong foothold in the region, owing to increasing support from legislative authorities
and the original equipment manufacturers.