The Chinese car industry is currently booming, but the industry of recycling cars has yet to be developed.
By the end of 2008, experts predict that China will have 2 million scrapped vehicles, or end of life vehicles. This is in contrast to the 55 million cars that will be on Chinese roads by the end of 2008. Obviously there will be a massive increase of end of life vehicles in the next 5 to 10 years.
Currently only 10% of end of life vehicles are recycled, leaving a huge defecit in vehicles. Sometimes end of life vehicles are fixed, their bodywork repaired and then they are resold in other areas or counties to unsuspecting buyers.
Guangzhou Honda has reportedly begun to recycle end of life vehicles, as they believe that they can recycle almost 90% of the cars they receive. Other car companies, such as Chery, JAC, FAW, and Jianghui have also initiated plans to introduce automobile recycling into their businesses. The rising prices of base raw materials may force many more Chinese automobile makers to look more closely at automobile recyling in the coming months and years.
The new guidelines on automobile recyling are expected to be announced later this year and are expected to shake up the recycling industry.
“……end of life vehicles are fixed, their bodywork repaired and then they are resold in other areas or counties to unsuspecting buyers.”
This sounds like the respectable and profitable business of used car sales. I think of “End of life vehicles” as those that are completely beyond fixing in terms of age and condition.
In order to keep a good public image these new carmakers need to show that they care about the the final resting place of their products. They contain gallons of hazardous fluids among other hazardous wastes. To do any less would antagonize the environmentally-minded folk. Nowadays that’s bad for business.
Oh, and while we’re on the topic, there are probably some meticulous folks out there who are lovingly garaging their early Chery, or Brilliance, model. No doubt these will bring top dollar 30 years from now.
Dragin,
China has an odd law, after 20 years your car is not road worthy.
Obviously the cost of keeping a 20 year old car in storage is a lot for some folk especially in the city so they get scrapped - or rather retitled and sold on in the suburbs. This happened recently with taxis in various cities that had reached the end of their mandatory 8 year life cycle, but they were sold on from 2000rmb to 15,000rmb depending on the state.
Search CCT for the visit to the 2nd hand car market article, there were a few trashed taxis for sale in that article!
Hi Ash,
Thanks for that clarification. I didn’t know about it. Collectors, when they eventually grow in numbers, will undoubtedly beef about it.
How mature is the scrap yard industry in China?
The do-it-yourself scrapyards here in the US do quite well by allowing customers to bring tools into the yard and pull used parts off for use on their own vehicles.
Sean