Partkart’s Approach to Auto Recycling in India’s Booming Market

In India’s dynamic automotive sector, Jeet Goswami, founder of Partkart, offers insights into the industry’s landscape and the context in which the company operates. The Indian government’s Vehicle Scrapping Policy has ushered in a new era for auto recycling, driving the transition towards a circular economy. This policy aims not only to decrease vehicular pollution but also to promote the reuse of auto parts, fundamentally reshaping the industry.

Exploring the Auto Recycling Landscape in India: Opportunities and Innovations

Before delving into Partkart’s innovative approach to auto recycling, it is essential to understand the current landscape of the sector in India. The government’s Vehicle Scrapping Policy has begun to reshape this landscape, creating both challenges and opportunities as the country moves toward a more circular economy with a focus on utilizing reused parts.

Challenges:

Infrastructure: The existing infrastructure for vehicle dismantling in India is unsystematic and mainly controlled by local garages/scrapyards – fragmented markets—Mayapuri, Delhi, Shivajinagar in Bangalore, etc. The scrapyard market is the oldest one in India, and in total, there are around 13 of that size in India. The people working therein have great potential and know how the maximum value can be created out of ELVs. However, a lack of resources has led to disorganization, leaving them as the main but unstructured sources of used parts in India.
Mindset: Unlike advanced countries, where automobile recycling systems evolved alongside industry growth, India’s push has just started towards organized vehicle recycling to be in line with the Global Green vision.
Air Pollution and Contamination: Abandoned vehicles, rusting or left in remote areas, contribute to air pollution and environmental degradation.

Opportunities:

Government Initiatives: The recent “Vehicle Scrappage Policy 2021” by the Indian government is a positive step. It aims to identify and dispose of three main categories of vehicles: physically old, technologically outdated, and unworthy due to accidents or non-utilization. This aims to reduce vehicular air pollution by phasing out old and unfit vehicles in an environment-friendly manner. It will indeed have an impact on the automotive sector and promotes the following circular economy practices:

Emissions Reduction by contributing to cleaner air and improved public health.
Catalyst for Vehicle Sales: Scrapping an old vehicle will provide a certificate that can be used as a discount towards the purchase of a new vehicle.
Savings on Imported Raw Materials: Reusing parts from scrapped vehicles reduces the need for new manufacturing and imported materials, thereby enhancing resource efficiency. Studies suggest that up to 70% of end-of-life vehicle parts can be recycled and reused reliably.
Expansion of Automotive Ecosystem: The scrappage policy encourages the creation of fitness centers, scrapping facilities and automation, expanding the overall automotive ecosystem.

Partkart’s Journey: From Inception to Innovation in Auto Recycling

Partkart has a strong team with decades of experience as Loss Assessors (Surveyors) and in the aftermarket sector. They understand the potential for an efficient way of handling ELVs and TLVs.

Partkart has been in the auto recycling business for the past six years. What sets us apart is our comprehensive approach, from sourcing vehicles to delivering quality-assured recycled parts to customers’ doorsteps, complete with a warranty.

We list each and every quality-assured part on partkart.com, which is an e-commerce platform from where complete part fitment details, cross compatibility and donor vehicle details can be identified to have an informed buying experience, giving confidence to its customers.

As the scrappage policy has been put in place and ELV dismantling is going to be efficient at RVSFs, a huge quality-assured auto parts inventory has begun to emerge. However, RVSFs are not in a position to disclose their inventory to customers, and customers can not reach them in remote places. We have moved ourselves to be an auto tech company, wherein our past experience and first-mover advantage are giving us the edge.

Partkart has the technology in place to dismantle the entire ELV through a virtual cataloguing system, which may be followed by physical dismantling later, as and when required. This will allow RVSFs and other existing players to be more efficient.

Overcoming Challenges: Establishing Partkart in India’s Vast Market

Demand for recycled parts is not an issue in India; it is substantial. Our Instagram page has nearly 250K active followers without any paid marketing, and we receive numerous daily inquiries. Our challenge lies in meeting this demand due to limited inventory. With over 350 models, more than 2,500 variants in India, and 600+ unique parts totaling nearly 1.5 million SKUs, no single player or chain of RVSFs can maintain a complete inventory. Ultimately, what matters is fulfilling demand through any competitive vendor and ensuring the marketplace is sustainable. So far, recycled parts in India have been a fragmented business, and adapting to a marketplace model has faced some reservations. However, RVSFs will eventually embrace this inclusive business approach.

Integrating Informal Players in India’s Auto Recycling Sector: Potential for Transformation

While Indian auto recycling is mainly dominated by fragmented recyclers, there are some notable RVSF players that have emerged in India:

CERO Recycling JV of Mahindra
Maruti Suzuki
Tata

The Recycled auto parts market is a worldwide business. Vehicle variations are common all over the world; there is huge potential for RVSFs’ bulk parts business due to their capacity to dismantle vehicles in huge volumes. Encouraging mandatory End-of-Life Vehicle (ELV) dismantling after a specified age will enable RVSFs to expand their dismantling capacity, thereby balancing their investments and returns.

Making vehicle recycling economically viable is essential. Companies need to balance costs, revenue, and environmental impact.

India’s auto recycling sector has significant growth potential, driven by two decades of rapid automobile sales resulting in an increasing number of End-of-Life Vehicles (ELVs). Establishing an ecosystem around RVSFs’ auto parts supply could be transformative. Despite being perceived as unorganized competition, longstanding fragmented players possess extensive networks capable of meeting market demands down to the last mile. India’s dynamic auto parts economy could benefit immensely from collaboration between these players, supported by technological solutions, potentially reshaping the industry landscape.

Building the Bridge: PartKart’s Future Objectives and Anticipated Roadblocks

Demand is abundant, and both the potential of RVSFs and existing players is evident. However, what is currently missing is a seamless bridge between them. PartKart aims to fill this gap, positioning itself as the crucial link. Leveraging smart technology to provide an end-to-end solution, we aspire to enable seamless interaction between demand and supply. This vision drives our team as we look toward the future.

Staying current with the latest technology updates is essential for us, especially with the rapid introduction of new car models every month. Additionally, advising on price revisions within the auto industry presents ongoing challenges that demand continuous effort and resource allocation. Expanding our team and resources is crucial to effectively managing these demands.

The potential of the Indian market requires a larger, more experienced team at Partkart that is aligned with our vision for future growth and system enhancement.