Vehicle recycling associations from around the world took part in the third international vehicle recyclers forum hosted by FORS (Polish association), to provide updates on their country’s current situation which inevitably covered COVID-19 as well as recent activity within each country’s vehicle recycling industry.
The meeting was hosted by Lucas Cioch, and those countries’ representatives in attendance included Canada, the US, the UK, Poland, Japan, Finland, Nigeria and Italy. Updates were provided by the host for France, Spain and Brussels.
Haydn Davies, Editor of ATF Professional and Auto Recycling World representing the UK was first to highlight recent changes within the association. He said one of the main things coming from the VRA is the certification scheme between the VRA and eBay. So far, it has seen 165 recyclers sign up and it is hoped that by September, ten companies will have been audited, with the view to more companies joining them.
There is also the Auto Recall programme, which has had a big uptake and which has coincided with the certification programme. As for COVID, the industry is getting back on its feet, it is estimated that around 75% of its workforce is back. Although a city in the UK is in lockdown, and the threat of a second wave is possible, there is a lot of positivity from recyclers.
Steve Fletcher, MD at the ARC, said Canada is going into phase three of reopening across the country. All auto recyclers are open again. Business is grinding back to normal, and they estimate they are back to 80-85% capacity regarding labour. Some companies have done well by their online retail presence, though, members who didn’t choose this route are struggling to get that retail back.
There’s been more activity on scrapping vehicles where volumes have doubled in the past few months and the reason for this is that people don’t need a second or third car as they will continue to work from home after COVID. There’s been an uptake on the scrap side but total loss has decreased as fewer vehicles have been on the roads due to lockdown. Competition at salvage auctions has increased as prices haven’t dropped much.
ARC has some big projects, one being the electrification of the fleet with the implications for auto recyclers; focusing on parts, storage and export opportunities. There’s an emergence of a scrap initiative in Canada, with incentives to get people to boost the manufacturing market. Overall the outlook is positive.
ARA Executive Director, Sandy Blalock said the US has seen a rise in COVID in southern and western states. 37 States are starting to shut down. Auto Recyclers throughout the US, are seeing a huge increase in their business, with a number of recyclers having record days and weeks. The biggest complaint is how the price of salvage has increased due to the decrease in vehicles available at auction. But business is good for recyclers because manufacturers had been shut down for several months, therefore the availability of new parts may have been restricted for a period of time.
They have a similar outlook to Canada when looking at EVs, inevitably more and more EVs will be entering the vehicle recycling market in the future so it is key to be prepared for this eventuality.
In Finland, Kai Lindell, General Secretary of the Finnish Vehicle Dismantlers Association said that COVID- 19 is practically non-existent in the country at the moment, apart from a few new minor cases so hopefully, a second wave will be avoided.
Lockdown has been lifted and travel is allowed between Nordic countries except for Sweden and Baltic countries and the Russian border remains closed. Dismantlers have been doing well, most have been doing better than previously as there has been a demand for secondhand/reused parts. 60 members have shut down for three weeks as it is Finland’s holiday season.
In Nigeria, Kenneth Okafor spoke of positives and negatives. On the upside, COVID numbers are quite low and restrictions have been eased. But currency and oil price is high which affects everyone but they believe the economy will come back but for now, it is a waiting game.
Mirco Di Francesco from Pollini, an Italian ATF, said the country is gradually coming back to a ‘new normal’. With the threat of a second wave predicted for the Autumn, there is a concern, but for now, they take things day by day, and with car dealers reopening, this means more business for vehicle recyclers.
Professor Togawa Kenichi from Kumamoto University, Japan said that business decreased by 20% compared to this time last year. There has been an increase in waste collection since the virus and transport costs have also gone up. They believe they are currently in the second wave especially since the country has seen an increase in the number of infections.
Adam Małyszko, President of the board of the Association of Car Recycling (FORS) in Poland gave an update of the economic situation concerning COVID-19. He said vehicle recyclers are in a positive situation now especially member companies who have learned from other country’s processes.
He said that May and June have been the best months ever for the industry, with the decrease in sales of new cars, this has resulted in more repairs for secondhand cars, which he predicts will continue until car sales increase.
Looking back, legislative changes in 2018 had more of an impact in Poland compared to the COVID situation. The outlook post-COVID is optimistic.
In France, the situation regarding COVID is improving. Though the economic situation is a concern, companies will have to start paying off debts from September.
The situation of COVID- 19 has changed thanks to the confinement and arrival of summer in Spain. Infections have pretty much stopped and business has resumed to the ‘new normal’ in the recycling sector. The Andalucian Association of Dismantlers is currently putting together a draft to their Government to promote vehicle recyclers and try to regulate all important aspects in the dismantling industry.
Artemis Hatzi-Hull from the European Commission in Brussels was not in attendance but relayed the message that they are in the finalisation of the evaluation of the preparations of the launch of the new impact assessment for the new ELV directive.
The updates turned to scrappage schemes and it seems that from a recycler’s point of view, they are more in favour of a long term scheme such as the one offered in Japan that lasted for ten years and offered incentives of 2000 euros to replace older vehicles with more environmentally friendly cars. Whereas in the UK, the last scrappage scheme in 2008/09 saw a huge increase in vehicles at ATFs which meant vehicles were processed too quickly just so they could make room for the more vehicles.
In the US, they had a similar scheme, which lasted for two months with incentives of $5000. This cash for clunkers programme was solely an economic stimulus for the automakers. 700,000 vehicles went through that programme. It was poorly thought out because it was based purely on economics and nothing else. At the time the ARA tried to work with the government to put restrictions in place but it wasn’t successful and 200,000 of those vehicles were unaccounted for.
The restrictions on auto recyclers and the amount of time they could keep the vehicles limited to 6 months after which time they would need to be crushed. The engines had to be frozen, chemicals were poured into the engines to lock making it harder to dismantle. There has been talk of another such scheme but the ARA hopes to be more involved. They also hope there will not be such a programme.
In comparison, ten years ago Canada’s scrappage scheme ran for about 2 and a half years and was run for emissions reduction as opposed to building the economy. The incentive was just $300 targeting 1995 vehicles and older. As far as scrappage schemes go, a lower incentive seems to be a better option so that fewer vehicles are sent to ATFs in a short space of time which makes processing more efficient for vehicle recyclers.
It seems that countries around the world are resuming to some form of normality and although each country mentions some changes to prices since lockdowns lifted, the general consensus is that business is steadily growing for the vehicle recycling sector.
The next meeting is set for September 2020. We will keep you posted.
