Denmark’s crash repair sector is under increasing pressure to adopt green parts as sustainability regulations tighten across the EU. Yet, despite political momentum and environmental urgency, reused parts remain underutilized. Kenneth L. Hjorth-Hansen, Senior Adviser at DI Bilbranchen, explains the challenges facing Danish workshops, from poor business incentives to system inefficiencies, and why urgent industry-wide collaboration is needed to make green parts a viable part of the circular economy.
Growing Pressure, Lagging Practice: Why Green Parts Are Still a Struggle in Danish Crash Repairs
The use of green parts in Denmark’s crash repair sector is evolving with a growing emphasis on sustainability and economic viability. Historically, though, Denmark has lagged behind our neighbors in Norway and Sweden, where, especially the latter, has a longer tradition with a sustainable value chain for the use of reused spare parts in crash repairs.
As I imagine, the same situation in other EU countries, the urgency in Denmark around reused spare parts is increasing due to sustainability pressures. Particularly, the demands for larger companies in the Corporate Sustainability Reporting Directive (CSRD) compel, for example, insurance companies to adopt greener policies. This creates pressure downstream for insurance companies to engage in more sustainable projects. Notably, the area of repairing damaged cars has shown that the crash repair sector can immediately demonstrate strong sustainability results, for example, more repairs and the reuse of parts.
While workshops (bodyshops) may find business potential in green parts for crash repairs challenging, there is a promising future in the broader reuse of materials. As the coming End-of-Life-Vehicles (ELV) regulation will tighten circularity requirements, workshops are likely to play a critical role in the future circular value chain, making it sensible to integrate reused parts into their core business now to prepare for a more circular economy in the future automotive industry.
Having highlighted the large potential for both insurance companies and workshops, all stakeholders in the car crash repair process must acknowledge that today, the business case for Danish workshops in repairing with reused parts is not viable. Administrative costs are too burdensome, the quality of the delivered parts varies too much, and both revenue and the subsequent margin on the reused parts are too low for Danish workshops to truly embrace reused parts as an integral part of the core business, like they are used to with new parts.
The consequence of all the above is that many workshops offer larger discounts on new parts to match the lower prices of reused parts, as the latter are too burdensome to handle. Thus, the use of reused parts merely becomes one big cost-saving exercise rather than the green initiative that the insurance industry promoted from the beginning. That is why we are now sounding the alarm to the insurance companies’ association (F&P) to discuss both a financially and sustainably viable future for the Danish workshops.
Autotaks and Autoflex: A Well-Intended System Creating Real-World Barriers
Denmark’s centralized insurance estimation system, Autotaks (developed by Audatex/Solera, owned by Forsikring & Pension (F&P), the Danish insurance companies’ association), has significantly influenced the adoption of reused parts in crash repairs in Denmark. The introduction of the reused parts module, named Autoflex, in the Autotaks system aimed to enhance the availability, accessibility, and management of reused parts by integrating them directly into the insurance estimation process. Despite initial benefits like improving accessibility, workshops have experienced a long range of difficulties, including, for example, revenue drops and increased administrative burdens.
A critical point to all of this is that the business model, which is built around Autoflex, within which workshops should be able to profit from the use of reused parts, has not been thought through. The model looked like a good solution when F&P initially integrated the Autoflex module. However, the market did not correspond well with the solution that they chose. Therefore, we have invited F&P and other industry associations to discuss other business models for the industry.
Barriers in the Bay: Why Reused Parts Remain a Tough Sell for Danish Workshops
Recently, we raised the issues behind the use of reused parts in a national expert council for workshops facilitated by F&P. We explained how many workshops are positive towards reused parts in their crash repairs; however, workshops generally experience a wide range of major problems with handling the reused parts. These include:
- The workshop loses a lot of revenue with reused parts compared to new parts,
- The workshop struggles to calculate its profit margins on used parts, primarily because it lacks an understanding of Autoflex’s business model and the auto recycler’s selling price to the workshop.
- The workshop often receives used parts that do not meet the quality standards set by the suppliers in Autoflex.
- The workshop experiences used parts that do not have quality codes listed in Autoflex.
- The workshop often spends too much time adapting the parts for use either for direct mounting or for painting.
- The workshop often discusses with the appraisers the challenges of using used parts to keep the business running.
- The reused parts supplier’s complaints process is too complicated.
- The shipping time is too long compared to new spare parts.
- The invoice collection from the suppliers often adds shipping on top of the part prices that appear in Autoflex.
- The insurance companies’ robots are designed to automatically reject estimating reports that do not meet the company’s requirements for used parts. However, the workshop has made a professionally correct decision not to use reused parts in certain cases (e.g., if this interferes with OEM requirements).
Unfortunately, all this together makes it unsuitable for an agile and solid business of a modern workshop in Denmark to use reused parts. Therefore, we have suggested that F&P resume dialogue with the automotive industry associations so that the processes around reused parts can be reconsidered.
Caught in the Middle: OEM Sales Targets vs. Circular Economy Demands
Like other markets, the importer contracts regulate the businesses of OEM dealers and their workshops. Most of these contracts contain obligations for OEM workshops to sell a certain amount of new OEM parts.
Obviously, the market needs to deal with the contradictory trends with importer sales goals of new OEM parts on one side, and a push for more reused parts from the insurance companies on the other. This is a predicament that needs to be dealt with when discussing importer agreements as well as insurance agreements.
What will probably help the workshops in this predicament are the coming tightening of the ELV Regulation (today’s ‘ELV Directive’), which will create a larger focus on circularity in the entire value chain, and thus hopefully balance the tensions between new parts and reused parts.
Trust Issues: Why Certification, Quality, and Logistics Matter for Green Parts
Naturally, workshops need to trust that the reused parts they order live up to the certification and quality that are promoted by their suppliers’ web shops. Today, this is not always the case, which creates distrust at the workshops towards the reused parts processes. Hence, certification, quality, and logistics play crucial roles in the future success of using more reused spare parts.
About DI Bilbranchen
DI Bilbranchen is an industry association under the Confederation of Danish Industry (DI), which represents over 700 Danish automotive companies – including authorized dealers of passenger cars, commercial vehicles (vans) and trucks as well as associated workshops. The association works both as an employer organization and as a political representative of its members.
DI Bilbranchen thus advises daily on legislation, personnel and industry legal matters, and works to promote the development and political interests of its members. They offer networks, member tools, analyses, and best practices to automotive companies. Among their focus areas are:
- Policy and regulation: Influence framework conditions through dialogue with decision-makers.
- Service and advice: Offer legal and professional advice to members.
- Networks: Create valuable networks such as DI Bilbranchen’s network for body repairers and the network for executive directors to inform and inspire about new and coming trends.
Strategic development: Work with a strategic framework, which is revisited annually at seminars to ensure agility and relevance in relation to the industry’s development.
