“By improving professionalism and updating general business practice among dismantlers, the potential increase in the sale of used vehicle parts is more likely to be realised,” it says. The report is designed to measure how the parts market can contribute to the European Commission's recycling targets set under the End of Life Vehicles (ELV) directive.
ELV states that 85 per cent of a car's weight must be recyclable by 2006 - compared to 73 per cent now - with 15 per cent going to landfill. By 2015, the proportions are 95 per cent recyclable to five per cent landfill. Carmakers are expected to look at recycling or reconditioning core items in-house to ensure uniform levels of quality. It would also help them to reduce waste and meet their obligations under ELV.
However, profits from selling new parts, for carmakers and dealers, would fall as recycled items attract a smaller margin. Body repairers would also suffer from lower margins - they have historically shied away from using recycled parts due to fears over safety and fitment. ERM recognises most repair parts are new. Surveys show 23 per cent of parts bought were used, with engines and gearboxes the most popular.
The parts reuse rate is between six to nine per cent of vehicle weight, but reliability and quality of used parts is stifling demand. Guaranteeing parts or introducing an industry code of conduct for dismantlers will help to improve standards, says the report.
“Encouraging customers to purchase used over new can increase demand for some parts,” adds ERM. “A potential solution is to encourage the insurance industry to purchase more used parts - this approach appears to have been successful in other countries.”