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A joint venture between an Indian and a Japanese company has
uncovered a treasure trove in India in the form of auto parts
salvaged from some of the roughly 10 million cars scrapped in the
country as the government puts tighter emissions standards in
place, Trend
reports citing Nikkei.
Abhishek Group, an Indian maker of air bags and other auto
parts, has begun tearing down used cars and recycling parts, such
as headlights, taillights and hoods, for resale in its joint
venture with Kaiho Industry, a leading Japanese auto recycling
company based in Kanazawa, Ishikawa Prefecture.
The venture, Abhishek K Kaiho Recyclers, was founded in 2019 and
began operating a plant in the northern Indian state of Haryana in
June, with an eye toward building a total of seven plants across
the country within three years.
The business of recycling cars has strong growth prospects in
India, with government aiming to set up two to three recycling
plants in each region to create jobs, said Road Transport and
Highways Minister Nitin Gadkari at the opening ceremony of the
Abhishek-Kaiho plant in May. The plant began operating with a
workforce of 20 earlier this month after the planned launch was
delayed by the COVID-19 pandemic.
In 2021, the Indian government announced guidelines for
disposing of vehicles in an effort to regulate the industry and
replace older, dirtier vehicles with newer ones. Commercial
vehicles that have been in service for 15 years or more and private
cars over 20 years old are inspected and scrapped if they fail to
meet emissions standards.
U.S. consultancy A.T. Kearney estimates there are around 10
million so-called retired cars in India. The country’s Supreme
Court announced a ruling in 2018 banning cars from operating on
public roads in the capital, New Delhi, unless they meet clean air
regulations, prompting state governments to work out detailed rules
on their own. The market for disposal of cars is expected to expand
as electric and other environment-friendly vehicles catch on.
Abhishek K Kaiho Recyclers tears down used vehicles, buying them
from local dealers, and sells usable parts to auto repair shops. It
also sells steel, aluminum and other materials obtained from the
scrapped vehicles, which can then be used to create building
materials. For the present, the joint company plans to strip down
100 to 350 vehicles a month and aims for 100 million rupees ($1.28
million) in sales in its first year.
Abhishek K Kaiho Recyclers began operating a new plant in
northern India in June, hoping to build seven plants across the
country within three years. (Photo by Moyuru Baba)
MOYURU BABA, Nikkei staff writerJune 23, 2022 14:49 JST
NEW DELHI — A joint venture between an Indian and a Japanese
company has uncovered a treasure trove in India in the form of auto
parts salvaged from some of the roughly 10 million cars scrapped in
the country as the government puts tighter emissions standards in
place.
Abhishek Group, an Indian maker of air bags and other auto
parts, has begun tearing down used cars and recycling parts, such
as headlights, taillights and hoods, for resale in its joint
venture with Kaiho Industry, a leading Japanese auto recycling
company based in Kanazawa, Ishikawa Prefecture.
The venture, Abhishek K Kaiho Recyclers, was founded in 2019 and
began operating a plant in the northern Indian state of Haryana in
June, with an eye toward building a total of seven plants across
the country within three years.
The business of recycling cars has strong growth prospects in
India, with government aiming to set up two to three recycling
plants in each region to create jobs, said Road Transport and
Highways Minister Nitin Gadkari at the opening ceremony of the
Abhishek-Kaiho plant in May. The plant began operating with a
workforce of 20 earlier this month after the planned launch was
delayed by the COVID-19 pandemic.
In 2021, the Indian government announced guidelines for
disposing of vehicles in an effort to regulate the industry and
replace older, dirtier vehicles with newer ones. Commercial
vehicles that have been in service for 15 years or more and private
cars over 20 years old are inspected and scrapped if they fail to
meet emissions standards.
U.S. consultancy A.T. Kearney estimates there are around 10
million so-called retired cars in India. The country’s Supreme
Court announced a ruling in 2018 banning cars from operating on
public roads in the capital, New Delhi, unless they meet clean air
regulations, prompting state governments to work out detailed rules
on their own. The market for disposal of cars is expected to expand
as electric and other environment-friendly vehicles catch on.
Abhishek K Kaiho Recyclers tears down used vehicles, buying them
from local dealers, and sells usable parts to auto repair shops. It
also sells steel, aluminum and other materials obtained from the
scrapped vehicles, which can then be used to create building
materials. For the present, the joint company plans to strip down
100 to 350 vehicles a month and aims for 100 million rupees ($1.28
million) in sales in its first year.
Abhishek K Kaiho Recyclers tears down used vehicles purchased
from local dealers, and sells off lamps, hoods, bumpers and other
parts to auto repair shops. (Photo by Moyuru Baba)
The venture traces its roots to 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 auto recycler, which has operations around the
world.
Kaiho brings to the venture more than 50 years’ experience in
dismantling used vehicles. Until around 30 years ago, this was its
main business. Since then, Kaiho has expanded into exports of auto
parts, after a Kuwaiti businessperson visited Japan and bought a
large number of used auto parts from it at high prices.
Kaiho then introduced its own standards for assessing the
condition of used parts and established an integrated system
spanning everything from procuring and dismantling of used cars to
the sale of parts. It has expanded into 90 countries, including
Thailand, Kenya, Nigeria and Ghana.
“With a population 10 times or more than Japan’s, India is full
of energy and growth potential,” said Takayuki Kondo, Kaiho’s
president. “I think we can contribute to the world as a whole by
dealing with environmental problems in the populous nation of
India.”
Kaiho will negotiate with the governments of Indian states and
build plants where car scrapping policies are adopted, Kondo
said.
Maruti Suzuki India, the country’s biggest automaker, and others
are also recycling auto parts. Last year, Swedish air quality
research specialist IQAir rated New Delhi the world’s most polluted
capital. It is thus essential to curb the city’s air pollution,
which comes mostly from vehicle exhaust.
In fiscal 2021, 3.65 million passenger cars were produced in
India, up 19% from the previous year, according to the Society of
Indian Automobile Manufacturers. Middle-class Indians are
increasingly hungry for cars as their incomes rise.
Although auto production has slowed in India due to the global
shortage of semiconductors, demand remains strong. With the
government aiming to raise the share of electric vehicles to 30% of
total sales by 2030, the pile of used cars requiring disposal —
and the pile of treasure — will only grow.
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