EUROPE AUTOMOTIVE PARTS REMANUFACTURING MARKET ANALYSIS

Market Challenges And Opportunities

Europe Automotive Parts Remanufacturing Market- Drivers:

Developing New Business Propositions

A few original equipment manufacturers (OEMs) are providing automotive parts as service-based propositions. With these extra value-added services, OEMs can enhance product design, save capital expenditures, and increase the availability of automotive components by incorporating them into their business model. Using automotive parts will also contribute to the longevity of automotive vehicles.

In addition, many automotive manufacturers are implementing scrappage schemes, under which automotive manufacturers are offering attractive discounts for the exchange of old vehicles, which is expected to boost the export of automotive parts as well as remanufactured parts over the forecast period. For instance, Toyota Ireland is offering scrappage benefits up to US$ 4,270 on buying a new car.

Increasing Sales of Used Cars in Europe

The sales of used cars are majorly increasing in many countries in Europe such as the U.K. Engine and drivetrain components are mainly replaced with automotive parts after manufacturing in the end-of-life vehicles, which is expected to boost the market growth of the Europe automotive parts remanufacturing market. For instance, according to Coherent Market Insights’ analysis, the sales of used cars increased by more than 10% in June 2021 in 13 European countries than they were prior to the COVID-19 pandemic in January and February 2020.

Europe Automotive Parts Remanufacturing Market- Opportunities:

Increasing Implementation of New Strategies

The U.K. is one of the major automotive manufacturers in Europe, and it is investing significantly in research and development in the automotive industry. For instance, in June 2020, the U.K. government invested US$ 91.3 Million in the automotive industry to develop automotive technology. Furthermore, from this investment, a huge amount will also be invested in lightweight and advanced automotive components that have a longer lifespan, which is expected to propel the demand for automotive components over the forecast period.

During the COVID-19 pandemic, many automotive manufacturers have shut down their manufacturing facilities and showrooms in the U.K., owing to this there was an increase in the sales of second-hand cars, which will create demand for automotive parts in the U.K. Moreover, many European countries have the oldest vehicle fleet that can be an opportunity for U.K.-based automotive parts providers. For instance, according to ACEA (European Automobile Manufacturers Association), Lithuania, Romania, and Estonia have the oldest fleet age in Europe, with vehicle ages older than 16 years.

Government Regulatory Initiatives & Vehicle Longitivity:

Government regulatory programs are focused on gradually increasing resource efficiency and eventually implementing environmental pricing measures. An example of such efforts is the Waste Directive 2008/98/EC by the European Council and Parliament, which established a legislative framework for waste management in European countries. This directive introduced key definitions, concepts, and principles such as the waste hierarchy and the polluter-pays principle. In the near future, Europe is expected to implement more stringent environmental regulations for products and explore innovative approaches to pricing ecosystem services and resources. These factors are projected to accelerate the growth of automotive part remanufacturing and drive market expansion in the foreseeable future.

Europe Automotive Parts Remanufacturing Market- Restraints:

Increasing Price of Raw Materials

The prices of automotive cars are increasing in many European countries, which is mainly due to the increase in the price of raw materials required for car manufacturing. Moreover, the increasing prices of raw materials also hamper the price of automotive parts remanufacturing, which is expected to restrain market growth. Moreover, the U.K. is one of the major automotive manufacturers in Europe, but the number of automotive vehicles manufactured in the U.K. is decreasing year on year, which also hampers the growth of the automotive parts remanufacturing market.

The Impact of Government Support and Customer Awareness

The market's growth prospects may face limitations due to a lack of awareness surrounding remanufactured auto parts. Despite being comparable to new parts in terms of quality, the potential of the remanufactured parts industry is frequently underestimated. This is primarily attributed to insufficient efforts by the government to promote and embrace remanufactured products. In underdeveloped and developing economies, customers' lack of awareness regarding the economic and environmental advantages offered by remanufactured products could impede market expansion throughout the forecast period.