The scale and challenges of the automotive remanufacturing industry

Although in the face of the automotive industry hotspots such as “autopilot”, “vehicle networking” and “new energy”, remanufacturing this niche market is somewhat lacking, but I have to admit that the development potential in this field cannot be underestimated, especially In the past two years, the development momentum of the remanufacturing industry in developed countries such as Europe and the United States can be described as “unexpectedly fast”, and even the late Chinese remanufacturing market has achieved a lot of growth. In response to this, Matherine Li (Li Chunyan), re-manufacturing industry analyst and head of remanufacturing business of APRA Asia-Pacific and Dusai (Shanghai) Enterprise Consulting Co., Ltd., was invited. The lectures are given to 360° analysis of the development status of the remanufacturing industry in all major regions of the world.

The scale and challenges of the automotive remanufacturing industry

What is remanufacturing?

In general, the definition of remanufacturing at home and abroad is similar, including the following key points:

First of all, remanufacturing is a process of specializing the restoration of used old parts. There are certain technical standards for the so-called specialized repair process. However, for domestic use, the electromechanical remanufacturing technology issued by the Ministry of Industry and Information Technology in 2012 The Equipment Catalogue has a certain introduction to the remanufacturing disassembly, cleaning technology and rework life testing. In addition, the Ministry of Industry and Information Technology's "Internal Combustion Engine Reproduction Industry Promotion Plan" also mentioned the key technologies for remanufacturing of internal combustion engines.

Secondly, remanufactured products must achieve the same quality and performance as the original new products, or even better. Many people may have doubts about this, because remanufacturing is a process of manufacturing old parts, and later through the understanding of the remanufacturing process, everyone will understand why the performance of remanufactured parts can be the same as new ones. Even more than new products.

Third, the price of remanufactured products is 20%-50% lower than the corresponding new parts, so its economy is very strong.

Finally, remanufactured products require quantitative production, so many remanufacturing companies need to have their own old parts recycling centers for picking, dismantling and other processes, and have their own strict production lines. For example, Daimler has already expected to build a remanufacturing center in Lingang, which is expected to become the world's largest remanufacturing production center, with three production lines for engines, gearboxes and electro-hydraulic control units.

The difference between remanufacturing and other "re-"

First of all, for overhaul and refurbishment, the final product is actually the same, but the refurbished product can be close to the original component, but the performance and quality may be difficult to match the original component, and overhaul and refurbishment is only one The maintenance process, the product can not enjoy the warranty of the new piece like the remanufactured product, which is one of the most unique places for remanufacturing products. In addition, from the price point of view, the current remanufactured products are relatively high compared to overhauled and refurbished products.

So, is the production of remanufactured products the same as other repair processes? In general, the initial process of remanufacturing must begin with the recycling of old parts, and there is no old piece to re-manufacture. However, not all recovered old parts can be used. These old parts must be inspected initially to confirm that the parts meet the remanufacturing standards and will be used only when they are qualified. Therefore, we need to have old parts recycling centers. It’s a cumbersome process to pick, clean, and then disassemble, inspect, sort, etc., so some companies may be discouraged when it comes to remanufacturing, because remanufacturing may be economical for the business. It is not very high, so the company that really does remanufacturing contributes a lot to the industry.

In this process, the staff actually uses the instrument for inspection and testing. After the processing of this technology, we will replace the parts that have been used, and then leave the test for inspection, and then assemble it after passing the test. . But in the end, it still has to be tested to make sure it can reach the original level, even better performance before it can be sold. When we talked to the head of the US General Remanufacturing Center, he mentioned GM's remanufactured engine in the US. Through testing and customer feedback, its performance is indeed 5%-10% better than the original. This is actually explainable, because after the remanufactured product is processed by reassembly or remanufacturing, it does not have to go through the same running-in period as the new part, but directly in an optimal state. Of course, the premise is that the quality of the old parts is very good, and the related remanufacturing technology is also excellent, and the final product can reach this level.

What are the automotive remanufacturing products?

According to the statistics of the American Auto Parts Suppliers Association, more than 50 types of cars and light, medium and heavy truck parts have been used for remanufacturing worldwide. Typical ones are: air conditioner compressors, generators, brake pads, vernier calipers, clutches, crankshafts, electronic control modules, pumps, etc.

So, what are the domestically recognized remanufactured products? According to the list of products currently announced, there are four main categories: engine, gearbox, starter and generator. These products are announced by the following policies: The products in the pilot list announced by the National Development and Reform Commission (1st) Batch), the list of mechanical and electrical products of the Ministry of Industry and Information Technology (the first batch, the fifth batch), the National Development and Reform Commission, and the Ministry of Industry and Information Technology to promote the products. Here, steering gears, remanufacturing equipment, oil pumps, air compressors, etc. are included in the business scope of other pilot units. Although these are not in the list of pilot products, they have actually been used for remanufacturing, but they are not in national policy. The list is listed in detail.

National remanufacturing policy environment

First look at North American remanufacturing policy: The United States is now affected by the Federal Motor Maintenance Cost Savings Act 2015. Remanufacturing is recognized and encouraged by legislation; affected by the United States, Canada does not do new and remanufactured parts. Any distinction is made, so it is a country that has no restrictions on remanufacturing at all, and remanufactured parts can be accessed and used in any form and manner.

In Europe, we mainly look at the EU and Russia: Russia has no direct legal restrictions on remanufactured products, but the complicated customs declaration process and application requirements make the cost of the old parts circulation very high. For the remanufacturing process, if the quality of the old parts is not high or the cost is very high, and the rear is to be remanufactured by very professional technology, the whole cost will be very high, so Russia is not very good at remanufacturing. Great progress; several mandatory legal directives issued by the European Commission have actually greatly promoted the development of the EU's remanufacturing in recent years. These directives include the Circular Economy Implementation Guidelines and Horizon 2020.

In Latin America, Mexico and Brazil have not made much progress in remanufacturing: Mexico implemented the “3R” principle (reduction, reuse and recycling) initiative in 2008 to promote sustainable development and reduce waste of industrial activities. However, there is no relevant law regulating the remanufacturing industry; Brazil has no official definition of remanufacturing, and does not distinguish between used and remanufactured products in the import classification, but restricts used capital imports, including used and remanufactured products.

There are more countries in the Asia-Pacific region: Singapore can now be said to be a relatively advanced country in the Asia-Pacific region, but due to cost issues, it is not a good choice for remanufacturing plants or production line locations. However, Singapore has an ARTC research institute that has established an industrial park in conjunction with the Singapore government. Currently, there are about 10 remanufacturing companies.

New Zealand is mainly influenced by Australia, because Australia does not have too many restrictions on remanufacturing, and there are many remanufacturing centers. For example, Cummins has more than one remanufacturing factory and center in Australia, so New Zealand is recognized and Promote remanufacturing, but similar to Singapore, labor costs will hinder the development of this business, so most of New Zealand is currently based on imports.

Malaysia is currently banned from the use of used old motor vehicle parts and is prohibited from recycling and remanufacturing domestic old parts. However, according to our communication with some official institutions in Malaysia, the government has cooperated with some enterprises and university research institutions to remanufacture. In the field of military industry. In addition, we also understand that the Malaysian government may be relaxing part of the policy at present. It is expected that Malaysia’s trade in import and export of old parts and even remanufactured parts will gradually be released around 2018 or 2020. This is worth looking forward to. .

For India, it has no official definition of remanufacturing, but allows domestic remanufacturing and restrictions on the trade of used and remanufactured products. Therefore, India’s domestic remanufacturing development is actually quite good, but we understand that This may be for some Indian companies. Overall, India's import and export licensing requirements are more ambiguous.

Earlier mentioned the United States Federal Motor Maintenance Cost Savings Act, US President Barack Obama signed the bill in October 2015, which means that remanufacturing in the United States formally passed legislation to make greater regulation of the remanufacturing industry, and The import and export of remanufactured products has also played a very important role in the TPP trade mentioned later.

Re-manufacturing is mentioned in the EU's Circular Economy Implementation Policy, which can be officially recognized and redefined and is considered to be an important direction for promoting the circular economy industry. Remanufacturing can indeed play a role in the circular economy. What kind of benefits will it bring to remanufacturing in the Circular Economy Implementation Guidelines? That is, remanufacturing will be supported by the relevant research fund plan after being mentioned.

Now let's take a look at the current hottest trans-Pacific partnership agreement, the TPP agreement, which claims to be the world's largest regional free trade agreement, and the 12 participating countries add up to 40% of the global economy and can eliminate 18,000. Tariffs for products manufactured in the United States. So, how does TPP affect remanufacturing? This is the only material mentioned in the FTA that is remanufactured, and the materials used for remanufacturing are identified as “TPP materials”, ie the terms of trade in the TPP Agreement. That is to say, when this agreement came into effect in 2018, all TPP member countries were free to import and export remanufactured old parts and products. Let's talk about Vietnam here, because we understand that there are many industry surveys that Vietnam can become the biggest beneficiary of TPP, because according to the survey, Vietnam may eventually export 28% more than the current TPP. And from a policy perspective, Vietnam is actually a very crucial part of the US Asia-Pacific policy.

In China, there are two types of remanufacturing policies from the end of 2015 to 2016. One is the pilot of remanufacturing of electromechanical products released in February 2016 (second batch); the other is released in November 2015. The fifth batch of the Manufacturing Catalogue. Therefore, in general, the current release of the policy is: the National Development and Reform Commission issued two batches of pilots, mainly on the pilot enterprises of automobile remanufacturing; the Ministry of Industry and Information Technology released a total of two batches of electromechanical products remanufacturing pilots, the first batch of 35, The second batch is 53, and the growth is very large. The two batches of pilots of the National Development and Reform Commission add up to a total of 42. In total, the total number of companies that have eliminated some duplicate certifications may probably reach six or seventy. The catalogue is There are five batches, and there are also subsequent re-commissioning pilots and remanufacturing plans for internal combustion engines.

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