June 18, 2024

Automotive Parts Remanufacturing Market to Gain Traction driven by Increasing Demand for Green Technologies

The process involves dismantling previously used automotive parts to rebuild them to an original quality level which helps reduce manufacturing waste and raw material consumption. Key components which are commonly remanufactured include engine, transmission, gearboxes, turbochargers, injection systems and ECUs among others. The global remanufacturing of these parts restores productivity while adhering to stringent emission standards laid down by various governments worldwide.

The global automotive parts remanufacturing market is estimated to be valued at US$ 2928.17 Bn in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2024 to 2030.

Growing emphasis on reducing vehicular emissions and raw material costs has augmented the need for sustainable automotive component rebuilding solutions globally.

Key Takeaways
Key players operating in the automotive parts remanufacturing market are Aerostar International, Inc., Raytheon Company, ILC Dover LP, Worldwide Aeros Corporation, Israel Aerospace Industries Ltd., TCOM L.P., Lindstrand Technologies, Ltd., RT Aerostat Systems, Inc., Lockheed Martin Corporation, and RosAeroSystems, International Ltd. These players collectively account for a significant share of the global market.

The growing demand for lowering operating costs and the steadily increasing vehicle parc represents a huge opportunity for companies in the aftermarket. Focus on newer technologies, development of advanced remanufacturing techniques and collaborating with OEMs is expected to drive future growth.

North America and Europe dominate the global automotive parts remanufacturing industry owing to stringent emission norms. However, Asia Pacific is witnessing rapid growth led by China and India on account of rising automobile production and sales. Industry players are expanding their operations in emerging markets to capitalize on the anticipated growth.

Market drivers
The increasing demand for environment-friendly technologies across industries is a major factor contributing to the growth of the automotive parts remanufacturing market. Remanufacturing helps reduce emission of greenhouse gases as it requires lower energy consumption compared to new component manufacturing. It supports decarbonization efforts of organizations globally and provides an affordable and sustainable solution.

PEST Analysis
Political: Regulations related to automobile emissions and fuel economy standards across regions drive demand for remanufactured parts that are comparable to new parts in quality and performance but offer better value. Additionally, trade policies impact cross-border trade of remanufactured components.
Economic: Volatility in key macroeconomic factors like GDP growth, vehicle sales, consumer spending influence the market. However, lower costs of remanufactured parts provide an affordable option and boost demand during economic downturns.
Social: Factors like average vehicle age, consumer acceptance and preference for recycled products, and initiatives promoting a circular economy create a conducive environment for the automotive parts remanufacturing industry.
Technological: Advancements in diagnostics, 3D printing, and automation enable superior quality control and precision required for remanufacturing complex automotive components. Digital tools help trace part history and manage inventories efficiently.

The Automotive Parts Remanufacturing Market Size is concentrated in regions with large vehicle parc and established automotive industries. North America leads in terms of value, supported by high vehicle usage and a well-developed aftermarket ecosystem. Europe is another major revenue generator with stringent emission norms driving demand. Asia Pacific is growing at a rapid pace due to increasing vehicle sales, availability of quality low-cost components, and efforts by regional governments to promote green initiatives. Parts from end-of-life vehicles are also sourced and remanufactured within the region to address the large serviceable obtained vehicle population.

In terms of value growth, the automotive parts remanufacturing market is expanding the fastest in Asia Pacific. This can be attributed to factors like rising motorization in developing nations, low penetration of remanufactured parts currently offering vast untapped potential, and ‘China+1’ procurement strategies followed by global part manufacturers actively setting up facilities in Asia. Other high potential markets include Central and Eastern Europe, Middle East, and Africa with their growing vehicle parcs and cost-conscious consumers receptive to quality refurbished components.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it