ScrapMyCar has set itself apart in India’s emerging car scrapping industry by building a foundation on trust and sustainability. Co-founded by Joshi Sikha, Anwesh Singh and Nelson Jean-Gaasch, ScrapMyCar focuses on providing scrap car owners with the best experience when scrapping their ELVs.
Their journey started when the founders set up their first scrapyard in May 2017 in Gurgaon, Haryana. They were amongst the earliest companies in India to scrap cars in an environmentally-friendly manner. Their yard adhered to European recycling standards as India did not have a recycling policy yet. Back then, they were the only scrapper that provided the extra service of RC cancellation from the RTO.
Their commitment to sustainable recycling standards, transparency and eco-friendly practices ensured environmental responsibility and aimed to reshape an industry traditionally marked by pollution and informality.
During COVID-19, the founders pivoted to an online-only model, which became India’s first online platform for car scrapping. They partnered exclusively with RVSFs (Registered Vehicle Scrapping Facilities) to ensure their service would always be legally compliant, thus giving customers complete peace of mind.
In this article, Joshi Sikha highlights ScrapMyCar’s role in pioneering trust, sustainability, and innovation in India’s vehicle recycling industry.
Building Trust and Setting Environmental Standards
Building trust with customers and ensuring sustainability were two of our founding principles. They were the very reasons my partner and I got into this business. We saw how the car scrapping sector lacked credibility, and car owners dreaded getting their cars scrapped. Furthermore, the methods of scrapping in Mayapuri, Delhi, were extremely polluting, to the point that five people died as they were exposed to poisonous gasses.
To build customer trust, we offered to get their car’s RC (Registration Certificate) cancelled from the RTO (Road Transport office). We were the only scrap car operators offering this service at the time. This was a big undertaking as we had to send someone to the RTO and file an application, as none of it was online back then. But customers trusted us because we guaranteed full legal compliance.
Our yard was set up according to European recycling standards to ensure sustainability, as India did not yet have a recycling policy. The floor of our yard was non-penetrable cement; our staff were given proper tools, and the work conditions were vastly better than any other yard at that time.
When we pivoted to our current online-only model, we still focused on building trust and ensuring sustainability. We do this by obsessing over customer education and awareness. Our staff are well trained to explain the complete legal process to customers, but many still need clarification as this is a new policy in India. To ensure our service is sustainable, we work exclusively with government Registered Vehicle Scrapping Facilities (RVSF). By working exclusively with RVSFs, we can guarantee that the car is recycled in an environmentally friendly manner, as RVSFs must comply with strict pollution standards.
ScrapMyCar’s Early Challenges in India’s Car Scrapping Industry
Starting a business in India is always challenging, but it was tougher for us as we were in an industry without any formal legal recognition. The following were some of the issues we faced when we started:
- No Government Policy – This was probably the biggest problem we faced. No government policy means no standards or procedures, which caused confusion among car owners and scrap recycling operators. We adhered to European standards for car recycling but still faced issues as our costs were higher than those of scrap recycling operators who did not care about sustainability.
- Lack of knowledge – Car owners and scrappers alike needed to gain more knowledge about the industry. As there were no formal channels, car owners had no choice but to give it to black market dealers with no assurance that their cars would get scrapped and not just sold in other states. The prevailing notion was that scrap recycling operators resell cars outside the city, and thus, car owners were nervous about getting their cars scrapped.
- Lack of Trust – A lack of knowledge leads to a lack of trust. One of our biggest struggles was convincing customers that we are genuine and will recycle their cars rather than resell them.
- No loyalty/ethics in used car parts buyers (mechanics) – The majority of used car parts buyers are mechanics and do not care about loyalty or ethics. They want the part at the lowest possible price and often refused to pay.
- Environment-friendliness had no appeal – While we wanted to recycle cars cleanly, no one – customers, partners or industry stakeholders – seemed to value sustainability.
- No standard pricing for used car parts – Profit in car scrapping is in used car part sales. However, since there was no market pricing for used car parts, we lost a lot of profit as we sold parts at much cheaper costs.
- No organised sales/distribution channels for used car parts – There was no market/network through which we could sell our used car parts.
How ScrapMyCar Aligns for a Sustainable Future
As in other industries, government policy significantly influences the car recycling sector in India. Previously, owners of ELVs would typically only scrap their cars once they were mechanically unusable. Due to the low cost of car maintenance in India, with affordable mechanic services, people often kept their vehicles running for as long as possible. This practice meant that cars were rarely in optimal condition, but as long as they could operate, owners would avoid scrapping them. When a car became too worn out, owners would often resell it to unsuspecting buyers. Now, with new policies in place, owners are more aware that their cars have a defined life cycle and there is a legal framework for proper disposal.
Government policy has also helped shape the car recycling service provider. Before the policy, car scrapping was done in an extremely haphazard and polluting manner with no regard for safety and the environment. The policy dictates clean scrapping procedures and has thus made car scrapping in India clean and sustainable.
ScrapMyCar aligned its entire business model around the government’s scrappage policy. We intentionally chose not to work with non-licensed scrap car recycling operators even though we could have made higher profits with them. By choosing to work exclusively with RVSFs, we firmly established our mission of providing car owners with a legal and sustainable medium through which to scrap their cars.
Expanding Horizons
We welcome interest from international companies that want to enter the auto recycling sector in India. This sector is in the early stages and has a lot of potential. Currently, we have not actively pursued any international partnerships. However, one of our partner RVSFs is a joint venture with a Japanese company, and they have expressed interest in working more in-depth with us.
We are also speaking with two European investor groups that are interested in our company. Since our model can be expanded globally with few changes, investors have expressed interest, as the potential for growth and expansion is substantial.
Key Growth Areas for ScrapMyCar
ScrapMyCar is looking at three main growth areas:
- Pickup operations – We will start picking cars on behalf of the scrap car recycling operators. We are getting our own cranes and will begin offering pickup services to scrap car recycling operators.
- Branded Used Car Parts – We are working on launching our own brand of tested used car parts. The parts will be procured from RVSFs and thus can be checked to a higher quality standard. This would also help increase profitability in the organised scrap car recycling sector.
- Scrap materials trading platform— We have access to raw materials (scrap metals, rubber, plastics, batteries, etc.) via our RVSF network and connections with large scrap material buyers. Therefore, the next organic step is to create a platform where buyers and sellers can trade their material.
By implementing these three initiatives, ScrapMyCar will create a robust and sustainable ecosystem for car scrapping in India.
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