China's car scrappage rate to peak in 2015, says study report

Author: Paul Ploumis
14 Jan 2015 Last updated at 05:29:01 GMT
BEIJING (Scrap Monster): According to recent study, the Chinese end-of-life vehicles (ELVs) is likely to grow rapidly, mainly on the back of rising car ownership rates, lack of appropriate regulations to process ELVs and severe shortage of dismantling facilities within the country.

The study finds that the country's overall automobile scrap rate was 4% in 2013, comparatively lesser when compared with the rates ranging from 6% to 8% in developed countries. The automobile industry witnessed explosive growth since 2000. China's car ownership at 137 million in 2013 is only next to the US. Assuming average car life of 10 to 15 years, the country is set to face the first car scrappage peak in 2015.

The number of ELVs in China is projected to reach 9-12 million by 2015. The figure may touch 12-16 million by 2020. The value of recyclable materials such as scrap steel, scrap tire, waste plastics and scrap non-ferrous metal content in ELVs will amount to RMB177.8 billion (Euro 21 billion) in 2015.

The China End-of-Live Vehicle (ELV) & Dismantling Industry Report, 2014-2017 also states that the country lacks enough facilities to formally dismantle and process ELVs. However, ELV dismantling and recycling network are showing signs of growth. A total of 576 Chinese firms obtained auto dismantling and recycling qualification in 2013. The number of auto recycling outlets grew almost 1.39% year-on-year.

According to the study, the dismantling capacities of scrapping facilities continue to remain at lower levels. For instance, the largest auto dismantling company- Shanghai Xinzhuang Auto Dismantling Co., Ltd. has a processing capacity of just 25,000 vehicles per annum.