VEHICLE SCRAPPING MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Vehicle Scrapping Market Size and Trends

Global Vehicle Scrapping Market is estimated to be valued at USD 74.91 Bn in 2024 and is expected to reach USD 139.31 Bn by 2031, growing at a compound annual growth rate (CAGR) of 9.3% from 2024 to 2031.

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Strict government regulations regarding vehicular emissions and rising environmental concerns are driving more vehicles for scrapping. With an increasing fleet age of cars across countries, especially in developed markets, the need for scrapping old and unused vehicles is growing tremendously. The market is expected to grow steadily over the forecast period due to stringent government norms for vehicle recycling and disposal. Additionally, financial incentives and subsidies provided by governments for scrapping old vehicles will further encourage more consumers to discard their old vehicles via scrapping. This will subsequently increase the supply of scrap which is a key raw material for the automotive industry and other sectors, thus forming a circular economy.

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Insights, By Material, Steel Dominates Due to its High Recyclability and Reusability

By material, steel is expected to contribute 50.5% market share owing to its excellent recyclability and reusability. Steel is the primary material used in automotive manufacturing for its strength, workability and cost-effectiveness. On average, nearly 70% of a vehicle's weight consists of various grades of steel across diverse components like the body shell, engine block, drive shafts, suspension parts and more.

Insights, Vehicle Type, Passenger Vehicles Dominate Due to Higher Volumes

By vehicle type, passenger vehicles account for 53.2% market share in 2024 owing to their significantly higher production and sales volumes compared to commercial vehicles. Motorization rates have been steadily rising across both developed and developing countries. However, the growth has been more pronounced for personal mobility needs with rising disposable incomes.

Insights, By Application, New Products Lead Due to Strong Demand for Recycled Materials

By application, the new products segment is expected to account for 55.2% market share in 2024, driven by strong demand for recycled materials. Various industries rely majorly on recycled materials obtained from ELVs to manufacture new parts and components. The automotive sector holds a dominant share in recycled goods to produce new vehicles. Steel continues to remain the backbone of automotive manufacturing and with depleting global steel reserves, recycled steel from scrapped vehicles is critical to meet production needs. 

Regional Insights

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Dominating Region: North America

North America is expected to account for 41.2% market share that can be attributed to the presence of stringent emission norms and increasing average age of vehicles in countries like the US. Government incentives for scrapping old vehicles and deploying newer ones have encouraged more end-of-life vehicles to enter the scrap chain. Major players like Copart and IAA have extensive networks to efficiently handle vehicle dismantling and recycling in the region.

Fastest-growing Region: Asia Pacific

The Asia Pacific region exhibits the fastest growth and is expected to account for 31.3% market share in 2024 driven by the growing middle class, urbanization and rising vehicle ownership in India and China. These countries are now imposing green policies to reduce pollution and optimize resource recovery from scrap. Companies such as LKQ Corporation and Schnitzer Steel have expanded into the Asia Pacific to tap the opportunities arising from a growing influx of ELVs.

Vehicle Scrapping Market Outlook for Key Countries

Tax Exemptions on New Vehicle Purchases in the U.S.

The US vehicle scrapping market continues to be one of the largest contributors, helped by tax exemptions on newer vehicle purchases against scrapping old ones offered by several states. Companies like Copart utilize tech-enabled platforms to maximize value from salvaged parts and materials. As the average age of the U.S. vehicle fleet continues rising, this is naturally leading to a shift in flows within the vehicle scrapping market. With more vehicles operating deeper into their usable lifecycles, the volume of vehicles reaching the end of their lives and getting scrapped on an annual basis has declined somewhat from peaks in the late 1990s and early 2000s.

Recycling Initiatives and Infrastructural Developments

China's market is gaining momentum with the implementation of recycling standards and infrastructure upgradation to scientifically dismantle and recover resources from increasing scrap volumes. Major local players have advanced shredding facilities. Over the past few years, there has been a notable trend of increasing vehicle ownership in China coupled with an aging vehicle fleet on the roads. As vehicles become older and less fuel efficient, the Chinese government has been strongly promoting the development of a formal vehicle scrapping/decommissioning industry to help green the transport sector as well as stimulate sales of newer vehicles.

Public-private Government Initiatives Boosts Scrappage Policies

The recent announcement of a vehicle scrappage policy is expected to galvanize India's market by incentivizing people to phase out older vehicles. Industry experts anticipate it to boost turnover for authorized dismantlers and recyclers across the country. Established automakers are also spotting an opportunity in this developing market space. For instance, Maruti Suzuki, a leading car manufacturer in India, has partnered with Gujarat state government to set up a large scrapping and recycling unit in Ahmedabad. Spread across 16 acres of land, this newly setup unit will have a capacity to scrap and recycle over 24,000 ELVs (End of Life Vehicles) annually.

Stringent Regulations to Catalyze Recycling Policies

Germany's market remains robust underpinned by stringent recycling quotas. Top companies like the BE Group have sophisticated facilities to efficiently process scrap and comply with tight regulations. While an aging vehicle fleet was initially slowing growth in the scrappage sector, stricter environmental regulations are offsetting this effect by bringing forward the retirement of older, more polluting vehicles. This dual impact of changing driver behavior aligned with government policies is reshaping scrappage patterns in the country. 

Market Concentration and Competitive Landscape

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Top Strategies Followed by Global Vehicle Scrapping Market Players

• Established Players – Leading companies like Schnitzer and LKQ Corporation invest heavily in research and development to create innovative solutions for vehicle dismantling and material recovery. Advanced technologies allow for more efficient and environmentally friendly processing of scrapped vehicles. Large players frequently form strategic alliances with automakers to strengthen long-term partnerships. Collaborating with OEMs ensures access to late-model vehicles and positioning as an approved treatment facility. Top companies like Copart and IAA have expanded worldwide through acquisitions to gain new facilities, customers, and geographical markets. International distribution networks increase access to global vehicle fleets and aftermarkets.
• Mid-level Players - Regional dismantlers focus on affordability to attract price-sensitive insurance and self-pay customers. Economical operations are achieved through optimized processes and reusable/remanufactured parts. Mid-sized companies partner to enhance capabilities like finance, logistics, technology and green initiatives. Joint ventures aid business growth through sharing talent, infrastructure and new revenue streams.
• Small-scale Players - Localized dismantlers often specialize in importing/exporting hard-to-find parts or restoring classic/custom vehicles. Niche focus helps gain loyal customer following and competitive advantage. By leveraging analytics, AI and IoT, smaller businesses keep operations streamlined and inventory optimized against tight budgets. Technology offsets lack of scale versus larger competitors. Forming local partnerships with body shops and repair facilities offers mutual customer/vendor relationships and marketing support within communities.

Emerging Startups in the Global Vehicle Scrapping Market

• Innovative Technologies - Startups like KARSOS develop AI-powered inventory management and predictive maintenance tools for dismantlers. IoT solutions from CarboTrack monitor asset utilization in real-time.
• Sustainable Solutions - Companies like Dash Eco create eco-friendly fluids from shredded end-of-life components. Reclaimer focuses on reusing/recycling a higher percentage of scrapped vehicles.
• Niche Markets: Startups address the growing classic/custom restoration, mining, and agriculture industries through innovative dismantling techniques.

Key Takeaways from Analyst

• The mandatory vehicle scrappage policy being introduced in various countries will be a key driver as it will increase the number of ELVs being scrapped every year. Moreover, the rising vehicle population combined with aging fleet will boost the volume of ELVs requiring proper disposal. Stricter emissions norms making old polluting vehicles obsolete will further propel the market.
• However, lack of organized and formal scrapping infrastructure in many developing nations may pose a challenge for market growth. High costs associated with setting up organized automated dismantling and shredding facilities can also deter investment. On the regulatory front, the absence of clear guidelines regarding the scrappage process in some regions remains a concern.
• The Asia Pacific region, led by China and India, is expected to dominate the global vehicle scrapping market owing to the presence of sizeable vehicle parc and implementation of vehicle scrappage policies. North America and Europe will also present lucrative opportunities due to stringent emissions regulations. Meanwhile, growing vehicle ownership in Middle Eastern and African countries is likely to drive future demand.
• With the implementation of mandatory vehicle scrappage policies and tighter emissions norms, proper vehicle dismantling, material recovery, and recycling are poised to evolve into a regulated industry worldwide.

Market Report Scope

Market Dynamics

Market Driver - Supportive Government Policies and Incentives for Scrappage

Many governments around the world have now identified the need to reduce greenhouse gas emissions and limit pollution caused due to old vehicle usages. Older vehicles are often less fuel efficient and emit more harmful pollutants into the environment. Numerous governments are now offering various incentives and policy schemes which are encouraging people to scrap their old cars in exchange of subsidy or discount on new vehicles. These supportive scrappage policies have proven to boost the vehicle scrapping volumes in several countries. For instance, in India the government implemented a vehicle scrappage policy in 2016 which offered a 25% discount or subsidy for purchasing a new vehicle if owners voluntarily scrap a privately-owned car older than 15 years.

Market Challenge - Lack of Infrastructure for Vehicle Dismantling and Shredding

The global vehicle scrapping market faces significant challenge due to lack of adequate infrastructure for vehicle dismantling and shredding activities. Most parts of the world lack proper facilities where end-of-life vehicles can be systematically dismantled to retrieve reusable spare parts. Similarly, infrastructure for responsible vehicle shredding is also missing in many regions.

Without appropriate dismantling infrastructure, it is difficult to retrieve reusable components from scrapped vehicles in an environment-friendly manner. This often leads to improper and unsafe handling of scrap vehicles. It also limits the potential of creating a circular economy around vehicle recycling. Setting up large-scale, mechanized dismantling and shredding facilities requires massive investments which many countries and local authorities are not able to afford. This infrastructure gap needs to be filled on priority for establishing an organized scrapping industry worldwide.

Market Opportunity- Growth in Organized Dismantling and Recycling Industry

One of the key opportunities for the global vehicle scrapping market is the predicted growth in organized dismantling and recycling industry. With growing policy emphasis on extending vehicle life and promoting recycling, several companies have started offering dismantling and shredding services professionally.

The ecosystem around vehicle recycling is also evolving with organized players collecting, dismantling and shredding End-of-Life vehicles. They ensure vital components and materials are extracted efficiently before responsible shredding. This helps promote a circular economy. As infrastructure and regulatory framework strengthens globally, the market share of organized dismantling players is forecast to increase substantially. Advanced decentralized shredding facilities and greater co-operation between dismantlers and recyclers can optimize resource recovery from scrapped vehicles.

Market Segmentation

• Material Insights (Revenue, USD Bn, 2019 - 2031)
• • Steel
  • Aluminum
  • Copper
  • Others
• Vehicle Type Insights (Revenue, USD Bn, 2019 - 2031)
• • Passenger Vehicles
  • Commercial Vehicles
• Application Insights (Revenue, USD Bn, 2019 - 2031)
• • New Products
  • Reusable Parts
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • LKQ Corporation
  • Schnitzer Steel Industries
  • Copart Inc.
  • Eco-bat Technologies
  • ASM Auto Recycling Ltd.
  • Scholz Recycling GmbH
  • Sims Metal Management Ltd.
  • Keiaisha Co. Ltd.
  • Hensel Recycling Group
  • INDRA