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.