EUROPE AUTOMOTIVE PARTS REMANUFACTURING MARKET ANALYSIS

Europe Automotive Parts Remanufacturing Market is estimated to be valued at US$ 25.88 Mn by 2030.

Automotive components undergo wear and tear and require replacement after a specific period of time. Consequently, there continues to be a high demand for automotive parts in the European aftermarket. This situation presents numerous growth opportunities for businesses involved in the automotive parts remanufacturing industry. Over time, the appealing cost savings and favorable profit margins associated with remanufacturing automobile parts have established a lucrative position for remanufacturers. Remanufactured parts are priced significantly lower, ranging from 50 to 75% less than the original products, while maintaining the same quality. This factor remains the primary driver influencing the growth of the market.

Europe Automotive Parts Remanufacturing Market: Country Insights

In 2022, Germany is expected to dominate the market share due to its abundance of automotive parts remanufacturing facilities. The Europe Automotive Parts Remanufacturing Market accounts for approximately 30% of the overall Europe Automotive Parts Remanufacturing Market.

Figure 1: Europe Automotive Parts Remanufacturing Market Share (%), By Country, 2022

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Europe Automotive Parts Remanufacturing Market - Impact of Coronavirus (Covid-19) Pandemic

The COVID-19 has a significant impact on the supply-side as well as the demand side of the Europe automotive parts remanufacturing market. The COVID-19 pandemic inevitably had an impact on car production along with automotive aftermarket companies. According to the Society of Motor Manufacturers and Traders (SMMT), the car production in the U.K. was 1,303,135 units in 2019 reaching 920,928 units in 2020 with a decline of -29.3%. Automotive companies are experiencing disruption in production due to lack of availability of automotive parts such as engines, suspension, semiconductors, and others. The shortage of components is turning out to be a major hurdle for the production of vehicle during the COVID-19 pandemic. For instance, in October 2020, Chevrolet, a division of General Motors, halted production of C8 Chevrolet Corvette due to shortage of parts due to the COVID-19 pandemic.

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 is majorly increasing in many countries of Europe such as the U.K. Engine and drive train components are  mainly replaced with automotive parts after manufacturing in the end-of-life vehicles, which is expected to boost the market growth of 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 automotive industry. For instance, in June 2020, the U.K. government invested US$ 91.3 Million in automotive industry to develop automotive technology. Furthermore, from this investment, a huge amount will also be invested in lightweight and advanced automotive component that has 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 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 age 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- Trends:

Engines Have Higher Value in Automotive Parts Remanufacturing Market

Automotive Parts have been gaining traction as a better approach to product recovery and uses as compared to recycling or landfilling recovery/disposal processes. At the Tier-1 level, many vehicle manufacturers are operating in automotive parts business on a large scale, either as part of their own business or through large contracted third parties.

Increase In Demand for Electric Vehicle Surge Automotive Parts Sales

Electric vehicles (EVs) are becoming more popular owing to its technological development, increased focus on renewable energy, and reduction of transportation's impact on climate change and other environmental issues. This rise in demand for electric vehicles (EVs) is expected to not only transform the future of the vehicles but also the automotive parts industry. Moreover, the government of the U.K. is planning to end the sale of new petrol and diesel cars by 2030, which will boost the demand for electric vehicles. The increasing adoption of electric vehicle is expected to boost the Europe automotive parts remanufacturing market.

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 the 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 hamper 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.

Figure 2: Europe Automotive Parts Remanufacturing Market Share (%), By Vehicle Type, 2022

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Europe Automotive Parts Remanufacturing Market- Segmentation:

Europe Automotive Parts Remanufacturing Market report is segmented into Vehicle Type, Component.

By Vehicle Type: Passenger Cars, LCV, HCV, Off-road Vehicle and All-Terrain Vehicle

By Components: Engine & Related Parts(Turbochargers, EGR Valves, And Carburetors), Transmission & Related Parts (Clutches and Bearings), Electrical & Electronics (Starters, Alternators, and Others), Wheels and Brakes Related Parts(Hub Assemblies, Master Cylinder, Brake Calipers,  and Bearings), A/C Compressors, Steering’s, Fuel Systems, and Others)

Europe Automotive Parts Remanufacturing Market: Key Developments

Major market players are focusing on product launches in order to enhance their product portfolio. For instance,

For instance, in June 2020, the U.K. government invested US$ 91.3 Million in automotive industry to develop automotive technology. Furthermore, from this investment, a huge amount will also be invested in lightweight and advanced automotive component that has a longer lifespan, which is expected to propel the demand for automotive components over the forecast period.

For instance, in February, 2023, European parliament had approved the law, wherein the sales of new petrol and diesel cars will be banned in 2035 to promote the usage of electric cars to achieve zero CO2 emissions from passenger vehicles

For instance, in November 2020, Renault announced that they will stop assembling the new cars in their old factory in Paris, as it will be converted into recycling and repair center by 2025

For instance, in September 2021, Xos Inc., a heavy commercial vehicle manufacturer, entered into a partnership with Cox Automotive Mobility, an automotive part manufacturing company. Through this initiative, the companies planned to focus on electric vehicle battery remanufacturing capabilities for battery solutions provided by Xos Inc. This is anticipated to help Xos Inc. in supporting its second-life battery offering for electric vehicles.

For instance, in November 2020, BORG Automotive, an Europe based OE remanufacturer of automotive parts, added new 113 parts in its portfolio for starters and alternators

Europe Automotive Parts Remanufacturing Market: Key Companies Insights

Major players operating in the Europe Automotive Parts Remanufacturing market include Borg Automotive A/S, Budweg Caliper A/S, Caterpillar Inc., LuK Unna GmbH & Co. KG, Valeo SA, Schouw & Co., ZF Friedrichshafen AG, Monark Automotive GmbH, Carwood Group, Robert Bosch GmbH, and Meritor, Inc.

*Definition: Automotive parts remanufacturing market refers to rebuilding of products, components, or an equipment of an automobile to its original shape, size and specifications by utilization of reused, repaired, and new components.