The global Automotive Parts Remanufacturing Market is estimated to be valued at US$ 2541.81 Bn in 2023 and is expected to exhibit a CAGR of 8.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Automotive parts remanufacturing involves rebuilding automotive components to restore their function and performance. it allows rebuilding worn out or old parts and bringing them back to an like-new condition by disassembling and repairing used parts. Common automotive parts that are remanufactured include engine parts, transmissions, starters, alternators, and other components. Remanufactured automotive parts provide significant cost savings at around 30–50% lower than new parts while offering similar quality, warranty and life expectancy of new parts.
Market Dynamics:
The growth of the automotive parts remanufacturing market is majorly driven by the significant cost savings it offers to both automotive repair shops and individual customers. Remanufactured parts reduce the overall maintenance cost of vehicles which is increasing their demand. Furthermore, rising vehicle age and mileage is leading to higher repairs and replacements, thereby boosting the market growth. Moreover, remanufactured parts have minimal environmental footprint as the process reuses previously used components instead of extracting new raw materials, providing an eco-friendly alternative. However, lack of standardized regulations and quality issues associated with some remanufactured parts hinders the market growth to some extent.
SWOT Analysis
Strength: The automotive parts remanufacturing reduces waste and conserves natural resources by recovering used automotive parts and restoring them. Remanufactured parts are more economical than new parts while maintaining similar quality. Remanufacturing extends the useful life of core components and supports the circular economy.
Weakness: Remanufactured parts may face challenges in gaining customer acceptance and trust compared to new parts. The remanufacturing process involves disassembly, inspection, cleaning and repairing of used components which increases costs and labor requirements compared to manufacturing new parts.
Opportunity: Stringent government regulations on waste management and circular economy present new business opportunities. Growth in miles driven and average age of vehicles increases demand for affordable replacement parts. Partnerships with automakers can help gain wider customer acceptance.
Threats: Stricter emissions norms accelerate shift towards electric vehicles posing risks to parts relying on internal combustion engines. Low crude oil prices reduce incentives for higher mileage vehicles and parts remanufacturing. Competition from low-cost new parts from Asia impacts market share.
Key Takeaways
The Global Automotive Parts Remanufacturing Market Size is expected to witness high growth, exhibiting CAGR of 8.7% over the forecast period, due to increasing vehicle parc and average age. Stringent emission regulations and rising demand for sustainable solutions further support the market growth.
Regional analysis: North America dominated the market in 2023 accounting for over 30% of global revenue led by U.S., owing to large fleet of aging vehicles and established remanufacturing industry. Asia Pacific is projected to grow at fastest pace during the forecast period with China and India emerging as major markets.
Key players: Key players operating in the automotive parts remanufacturing market are Valeo SA, ZF TRW, Carwood Group, Robert Bosch GmbH, Meritor Inc., Monark Automotive GmbH, Budweg Caliper A/S, Genuine Parts Company, ATC Drivetrain Inc., Maval Manufacturing Inc., Teamec BVBA, Motorcar Parts of America, Inc., and Jasper Engines and Transmissions. Players focus on expanding service network and partnerships with automakers to gain wider customer access.
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