Scrapped cars a gold mine for India-Japan recycling venture

NEW DELHI – A joint venture between an Indian and Japanese company has unveiled a treasure trove in India in the form of auto parts rescued from some of the country’s roughly 10 million cars scrapped as the government imposes stricter emission standards.

Abhishek Group, an Indian manufacturer of airbags and other auto parts, has begun demolishing used cars and recycling parts, such as headlights, taillights and hoods, for resale in its joint venture with Kaiho Industry, a leading Japanese car recycling company based in Kanazawa. , Ishikawa Prefecture.

Abhishek K Kaiho Recyclers was founded in 2019 and began operating a plant in the northern Indian state of Haryana in June, with the aim of building a total of seven plants across the country in three years.

The car recycling business has strong growth prospects in India, with the government aiming to set up two to three recycling plants in each region to create jobs, Road and Highways Minister Nitin Gadkari said at the plant’s inauguration ceremony. Abhishek-Kaiho in May. The plant began working with 20 employees earlier this month after a planned launch was delayed due to the COVID-19 pandemic.

In 2021, the Indian government announced guidelines for discarding vehicles in an attempt to regulate the industry and replace older, dirtier vehicles with newer ones. Commercial vehicles that have been in operation for 15 years or more and private cars over 20 years of age are inspected and scrapped if they do not meet emission standards.

The American consulting company AT Kearney estimates that there are about 10 million so-called retired cars in India. The country’s Supreme Court has ruled in 2018 banning cars from driving on public roads in the New Delhi capital unless they comply with clean air regulations, prompting US governments to draft detailed rules themselves. The car disposal market is expected to expand with the introduction of electric and other environmentally friendly vehicles.

Abhishek K Kaiho Recyclers demolishes used vehicles, buying them from local dealers and selling usable parts to garages. It also sells steel, aluminum and other materials obtained from scrapped vehicles, which can then be used to create construction materials. So far, the joint venture plans to unload 100 to 350 vehicles a month and is aiming for sales of 100 million rupees ($ 1.28 million) in its first year.

Abhishek K Kaiho Recyclers destroys used vehicles purchased from local dealers and sells lamps, hoods, bumpers and other parts to garages. (Photo by Moyuru Baba)

The initiative began with an Internet search by Abhishek in 2016. The Indian company sent an email to Kaiho, expressing a desire to address environmental problems in India by working with the Japanese car recycling company, which has operations around the world.

Kaiho has more than 50 years of experience in dismantling used vehicles. Until about 30 years ago, this was his main activity. Since then, Kaiho has expanded into auto parts exports after a Kuwaiti businessman visited Japan and bought a large number of used auto parts from Japan at high prices.

Kaiho then introduced its own standards for assessing the condition of used parts and created an integrated system covering everything from buying and dismantling used cars to selling parts. It has expanded to 90 countries, including Thailand, Kenya, Nigeria and Ghana.

“With a population 10 times or more than Japan, India is full of energy and growth potential,” said Takayuki Kondo, president of Kaiho. “I think we can contribute to the world at large by tackling the environmental problems of India’s populous nation.

Kaiho will negotiate with Indian governments and build factories where car scrapping policies are adopted, Kondo said.

Maruti Suzuki India, the country’s largest carmaker, and others also recycle auto parts. Last year, Swedish air quality specialist IQAir identified New Delhi as the most polluted capital in the world. It is therefore essential to reduce air pollution in the city, which comes mainly from vehicle exhaust.

In fiscal 2021, India produced 3.65 million cars, up 19% from the previous year, according to the Indian Automobile Manufacturers Association. Middle-class Indians are increasingly hungry for cars as their incomes increase.

Although car production has slowed in India due to the global shortage of semiconductors, demand remains strong. As the government seeks to increase the share of electric vehicles to 30% of total sales by 2030, the pile of used cars requiring disposal – and the pile of treasures – will only grow.