The coronavirus is slowly putting a damper on business prospects worldwide. ‘For the automotive industry, however, it could be an opportunity to up the recycling game,’ says Chris Daglis of Australian firm PARTnered Solutions.
Many factories in China have been shut down in recent weeks, including those manufacturing anything from smart phones to automotive parts. As a result, leading carmakers such as BMW, Audi and Volkswagen find themselves increasingly cut off from the supply of new parts.
In Australia, there are over 1.5 million motor vehicle insurance claims each year and parts make up around half of the repair cost. ‘Millions more are going to mechanics for routine repairs every year,’ Daglis says, pointing out that a longer repair cycle increases the cost.
‘The automotive industry is expected to be one of the largest affected by the outbreak,’ Daglis adds. He believes that repairing and servicing the global vehicle fleet will become ‘significantly more expensive’ and it will prove ‘virtually impossible’ to cater to this massive market solely with new parts.
‘At this rate, the time a vehicle is off the road is set to increase significantly,’ he predicts, arguing the looming health crisis is likely to increase the demand for and use of quality ‘recycled original equipment’ parts.
Car recycling companies are advised to be ready for a surge in demand for second-hand parts. ‘I am already speaking with repairers and insurers who are experiencing delays. Those that are looking ahead are certainly expecting this to get worse before it gets better,’ Daglis says. ‘You cannot complete a repair unless you have every part required for that repair. So only one unavailable part out of the hundreds that can be used in a repair will affect the total product and claims cycle.’
He believes this is a great time to build stronger links between the suppliers of new and recycled parts.
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