Salvage Wire

Salvage Wire
Helping Automotive recyclers become leaders in their industry

Saturday 16 January 2010

2020 and all that!

As we start a new decade, what can the motor salvage market expect over the next 10 years, and how different will the marketplace be in 2020?

In the short term, I do not expect too many changes, vehicles will remain fairly conventional and the need for ‘green’ parts will increase as more companies see the need to reduce their carbon footprint and increase their use of recycled parts in vehicle repair and maintenance.

2015 will be a critical point in the decade for a number of reasons.
Firstly, EU ELV legislation means that 95% of each car scrapped in the EU will have to be recycled, an increase over the current 85%. By then, many other countries will have followed the lead set by the EU and have similar legislation.
By 2015 there will have been significant increases in the production of hybrid, electric and alternative fuelled vehicles, including Fuel Cell and Bio-Fuel. The conventional fossil fuel vehicle will be less popular and values of these will decrease with more coming to salvage, and with less demand more of each vehicle will have to be scrapped and the waste recovered, rather than parts being sold to meet recycling targets – and this problem will grow for a few years as the global vehicle market changes to fit the new - low carbon - world order!

So what opportunities can we see for the salvage market during the decade?
China and India are the fastest growing car markets in the world, with an incredible demand in both countries for cars – there could be many opportunities for switched on businesses able to gain a foothold in either country for the supply of vehicles, or the supply of parts. With the incredible growth of vehicle ownership in both countries there will be the inevitable incidents and accidents that occur with new drivers, and with an infrastructure that is unable to grow as fast as vehicle ownership – supply of parts for vehicle repair in these countries may be a very profitable option.

The global credit crisis may also have helped the motor salvage industry; many of the motor manufacturers are investigating or developing ‘global’ models, so they sell the same vehicle in all countries of the world – so the parts coming off a car in the USA could be fitted to a vehicle in China, and parts from China could be used in India – and so-on.. This opens up the whole world to the supply of parts from motor salvage.

Another opportunity could be to specialise in the new technology, become a salvage specialist for hybrid, or fuel cell vehicles. It sometimes takes a few years to develop an idea, and build a reputation in a new area, why not start now and be ahead of the rest of the market?

I think that by 2020 the global salvage market will be looking a very different place, much more regulation and recycling targets will be in place, but with some fantastic opportunities for those that have been prepared to take a risk and develop new markets and build their reputation as a global operator.
Salvage wire could assist you in developing your business to take advantage of the opportunities that this decade will bring, see our web site for more details of how we can help you.

Thursday 7 January 2010

10 new years resolutions for 2010

10 New Year resolutions for the motor salvage industry:

10 suggested improvements that the majority of motor salvage operators need to look at in 2010 – for some all of these will be applicable, for others you could select one or two of them and see what a difference they make.

These are not in any particular order, as all 10 are important.

1. Licences and Registrations: I know ‘red tape’ is time consuming and laborious, but it is here to stay, so if you cannot deal with it, employ someone who can.

2. Computer Skills: we now live and work in an internet society, from purchasing of vehicles, applying for licences, through parts and vehicle sales, to scrapping and certificates of destruction – too many are still ‘employing’ their children to keep this important part of the operation up to date - learn how to use a computer and recognise the benefits this can bring to your business; increased exposure, more enquiries, more sales, efficiencies in purchasing, licence renewals etc.

3. Stock Control and Inventory: Knowing what is in the yard and the condition of the parts will become increasingly important over the coming year – you cannot afford to lose a sale because you have to check what is in the yard; give a swift answer to any enquiry and there is less chance of the customer going elsewhere.

4. Compliance to Standards: There are many standards and contracts in force, from sellers terms and conditions, to codes of practice and salvage association standards – learn them and comply, they are there for the protection of individual businesses and to increase the professionalism of the industry.

5. Customer Service: The difference between getting and not getting a sale is sometimes very small, and not always related to the price charged as many think. If you give great customer service then the customer will come back and may recommend a friend or relative – if you give poor service that customer will probably not come back and may tell many more people about the experience. Learn how to exceed your customers expectations it will benefit you and your company.

6. Environmental Awareness: We work in a highly regulated industry, and all environmental offices have a difficult job at times, let’s make life as easy as possible for them by ensuring that all of our operations work to the highest of standards at all times – then those officers can shift their focus to the businesses that are not compliant or licensed.

7. Image: We know that our industry is very environmentally friendly, recycling 85% of each vehicle, ensuring that hazardous materials are dealt with correctly and so on. What is the perspective of the general public? Many have images of vehicles stacked 5 high, dripping oil and water – we need to change this by projecting a clean, smart, professional image. This can be through the appearance of the yard, paperwork, web site, and staff work wear – for example, make sure that all delivery notes/invoices attached to parts are clean and do not have dirty fingerprints on them. Look at the clothing worn by staff on site, where they meet customers do they portray a good image to the customer, or are they just plain grubby?

8. Join a Trade Association: Yes, I know it costs money, but making a good choice of trade association could pay dividends in coming years. The stronger your trade association the more benefits they can give you - This could include a voice at Government level, support in your dealings with local authorities, regular liaison with environmental agencies, and much more. The only way these associations can have this influence is if more salvage businesses join them.

9. Training: Too many businesses neglect training their staff, and many will only provide the bare minimum. The danger for some is the risk of investing in the employee to find that they then leave to join a competitor. Well trained staff bring many benefits to any business, and the investment in training could be a reason for them to stay with that business because the staff can see that they are valued.

10. Ideas: Do not dismiss ideas and suggestions from your staff (or family), sometimes they can see problems and solutions better than you can. In fact, encourage ideas and improvements as this is a good way of retaining and developing employees, and this could improve your business as well as increasing staff loyalty as they then ‘own’ that part of the operation.