INDIA VEHICLE SCRAPPING MARKET Challenges and Opportunities

India vehicle scrapping market faces a major challenge due to the lack of infrastructure required to support large scale vehicle scrapping. While the government has now made it mandatory for commercial vehicles over 15 years and passenger vehicles over 20 years to undergo fitness tests to get renewed registrations, the country lacks adequate scrapping yards and dismantling centers to handle this volume of scrapped vehicles. With an estimated five million commercial vehicles and another one million passenger vehicles reaching their end of life annually, setting up proper scrapping centers across major cities and automotive hubs will require large investments. This could potentially hamper the smooth implementation of the scrapping policy in initial years as infrastructure is slowly developed.

Market Opportunity- Growing Demand for Recycled Automotive Components

One of the key opportunities for players in India vehicle scrapping market is the growing demand for recycled automotive components. As thousands of old vehicles get decommissioned and dismantled at authorized centers every year, there will be a sizable supply of reusable parts such as engines, transmission components, steel sheets, aluminum parts and electric vehicle batteries. Many of these components can be remanufactured and remarketed at lower costs compared to new parts. The automotive aftermarket which sees demand for replacement parts is increasingly embracing recycled components. Both independent garages and automotive workshops will source such parts for repairing older vehicles.