The Indian vehicle scrapping market comprises recycling of end-of-life vehicles through authorized scrapping centers. Vehicles which complete 15-20 years of usage undergo recycling at these centers. The key components recovered from the scrapped vehicles include ferrous and non-ferrous metals, plastics, rubber, etc. which are further processed and supplied to raw material manufacturers. The growing automotive sales and ageing vehicle fleet in the country has fueled the need for an organized vehicle dismantling and recycling infrastructure.

India Vehicle Scrapping Market is estimated to be valued at USD 8.9 Mn in 2024 and is expected to reach USD 38.4 Mn by 2031, growing at a compound annual growth rate (CAGR) of 23.2% from 2024 to 2031.

Key Takeaways

Key players operating in the Indian vehicle scrapping market are Maruti Suzuki Toyotsu India (MSTI), CERO Recycling, Tata Motors Re.Wi.Re, Kaiho Sangyo Co. Ltd, Mjunction Services Ltd, Go Green ELV Handlers, Goodvalue Auto Scrap Pvt Ltd, Goenka Motors Pvt Ltd, KD Ecosystem, Mahindra MSTC Recycling Pvt Ltd, SRI NEELAYUM PRECOATED STEEL. These players are focusing on expanding their authorized vehicle scrapping centers across major cities in the country.

The growing fleet of end-of-life commercial vehicles such as trucks, buses, etc. and mandatory scrapping policy by the Indian government presents significant opportunities for organized players in the market.

The India Vehicle Scrapping Market Growth players are focusing on global expansion through partnerships with overseas shredding and recycling technology providers to cater to global exports of recycled materials.

Market drivers

The mandatory scrapping policy by the Government of India Vehicle Scrapping Market Size and Trends older than 15-20 years is a major driver for the market. This policy aims to reduce vehicular pollution and emissions from older vehicles plying on roads. It is also expected to boost demand for raw materials from scrapped vehicles for recycled steel and auto parts manufacturers.

PEST Analysis

Political: The government is promoting vehicle scrapping as a part of its Auto Policy to reduce vehicular pollution. New regulations mandating fitness tests for commercial vehicles older than 15 years and private vehicles older than 20 years will increase the volume of scrapyards.

Economic: Setting up authorized vehicle scrapyards will generate new jobs and business opportunities in dismantling, discarding and recycling. It will provide a cheaper source of components for the automotive aftermarket. Reusing scrap metal will reduce imports of raw materials for the steel industry.

Social: Younger people are more aware of environmental protection and recycling. They prefer buying recycled components which have low carbon footprint. However, public transport needs to be strengthened as an alternative to personal vehicles to control urban congestion and pollution.

Technological: Sophisticated material separation, shredding and retrieval systems ensure maximum reuse of components and materials. Advancements like computer-controlled dismantling and 3D mapping help efficiently recover various scrap parts. Technologies like blockchain can bring transparency in documentation and funding of authorized scrappage facilities.

The market in terms of value is concentrated majorly in the northern region of India comprising Delhi, Uttar Pradesh, Haryana, Punjab and Rajasthan. This is because the commercial vehicle fleet is largest in this region owing to a high density of industries, warehouses and logistics hubs. Moreover, scrapyards located in the surrounding areas of major cities have good infrastructure connectivity and access to spare part dealers as well as metal industries.

The southern states of Tamil Nadu, Karnataka, Andhra Pradesh and Telangana are emerging as the fastest growing regions for the vehicle scrapping market. This is attributed to rapid urbanization, rising disposable incomes, expansion of shared mobility fleets and stricter emission norms mandated by local Pollution Control Boards which are driving up scrappage volumes. The availability of developed industrial zones and special economic regions catering to automobile and auto components sectors provides a conducive environment for setting up organized vehicle dismantling facilities in South India.                    

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