The generation of end-of-life vehicles (ELVs), an essential source of recycled parts products for recyclers, is witnessing a decline in Japan. The Japan Automobile Recycling Promotion Center (JARC: President, Eiji Hosoda) had projected that ELV generation would decline by 5.3% in the first half of 2023 when compared to the same period of the previous year, amounting to approximately 1.4 million units, according to a recent article by the Japan Automotive Recyclers Alliance (JARA).
The decline in ELVs can be attributed to supply delays of new cars caused by the COVID-19 pandemic. JARC analysis showed that vehicle production in the first half of 2023 dropped by nearly 20% compared to the same period of 2019 when it was not affected by COVID-19. However, the competition for ELVs at auto auctions is intensifying among recyclers. Akiyoshi Asano, Director of Rever Corporation (President, Naoto Matsuoka), remarked, “At auto auctions, foreign buyers often get ELVs at higher price.”
Amidst the challenging business environment, some recyclers are transitioning to reviewing their business management. Iwamaworks Co. (President, Suguru Iwama) emphasises how many used parts for resale can be taken from a single ELV. CRS Saitama’s President Kazuomi Kato said, “If the company pursues quantity, working staff will also go for quantity rather than quality.” The recycler places importance on the precise dismantling of vehicles.
However, the increased acceptance of mini-vehicle ELVs (under 660 cc) prompted these recyclers to undergo business transformation. “Minivehicle acceptance doubled compared to a decade ago,” according to Rever Corporation. CRS also acknowledged that the number of mini-vehicle ELV acceptances surpassed that of over 1,000 cc engine vehicles over the past several years.
Conversely, the price of steel scrap has been on the rise. For some recyclers, their export business of steel scraps has proven beneficial to the companies. However, sudden changes in exchange rates and various conditions can easily affect export business. “Our priority is the domestic sales of used parts. We will not change this policy,” said Suguru Iwama.
Source: JARA NEWS
