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

Regional Analysis

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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.