Saturday, 3 May 2014
Transforming used parts industry
ON RECORD there are some 10.3 million vehicles owned by Malaysians, and out of which more than five million are more than ten years old.
It is reasonable to assume that the majority of this category of vehicles are owned by those that would prefer used parts and components in their vehicle maintenance plans.
Despite the uncertainty on the safety aspects of the used parts and components, for economic reasons and common believe that it is only logical to use used parts since the cars are old, the local used parts sales have mushroomed of late.
Regulating the usage of used parts is necessary for safety reason, and yet it is difficult to implement as both repairers and consumers are in favor to replace their failed vehicle parts with cheaper used parts.
Realizing the importance of the used parts industry, the National Automotive Policy (NAP) 2014 is determined to transform the sector to become the regional hub for used parts production through a more organised “remanufacturing” structure.
The recently introduced “remanufacturing road map” outlined detail criteria of remanufacturing as well as the standards and best practices that will be used by the local industry players in transforming Malaysia as the hub for automotive remanufacturing activities within its aftermarket ecosystem.
In addition, the road map also explains measures to optimize recyclability and recoverability levels of used components in order to support the NAP’s aspiration to “green” the supply value chain of the local automotive industry.
Remanufacturing, an emerging industry of strategic importance, is a process where used parts are disassembled, cleaned, repaired and reassembled to be used again on vehicles. In comparison to the manufacturing of new parts, remanufacturing is estimated to save energy by 60 per cent and raw materials cost by 70 per cent.
Remanufacturing ensures the same product quality, durability and performance comparable to those of new components. In addition, accessibility to “cheaper but like new” components will be the main benefit gained by users through remanufacturing implementation. A remanufactured part normally costs between 50 and 70 per cent that of a new one, and usually carries some warranty offers.
Components that are remanufactured within the global automotive industry include air-conditioning compressors, alternators, engines, fuel system components, rack and pinion steering, starter motors, steering system, transmission system, turbochargers and water pumps.
The remanufacturing road map will focus on resolving the need to regulate and standardize the remanufactured components by distinguishing them from those of the salvaged components from the scrap yards which are reused, refurbished or repaired without undergoing proper testing and quality assurance procedures. The remanufactured components will be fully tested in accordance with specified standards, fulfilling similar function with warranty offer as the original components.
Malaysia has the potential to build a strong remanufacturing industry with the existing manufacturing base with the availability of an established and sound parts recycle industry.
The NAP 2014 initiatives will support skills development for remanufacturing, establish a quality control framework within an official remanufacturing definition and quality seal for remanufactured products, clarify trade conditions for remanufactured goods, and promote the supply and demand for remanufactured products via environmental policies.
Enhancing the role of research institutions and companies in pushing forward remanufacturing technological innovations is key to successfully promoting the development of remanufacturing sector.
Remanufacturing requires support from other activities such as parts collectors, professional recyclers, disassemblers and cleaners to ensure consistency and sustainable business operation.
The demand will boost the development of more organised recycling activities within the aftermarket ecosystem.
Remanufacturing activities are closely linked to the End-of-Live of vehicles (ELV) as inputs. ELV is associated with two aspects of a vehicle lifespan. A “natural” ELV is one that has ended its road usefulness due to natural factors like wear and tear, while a “premature” ELV is due to accident that is beyond repair, either economically or mechanically.
ELVs can be the main inputs to the remanufacturing ventures, particularly those of the premature category. However, there are needs for the establishment of centres to efficiently extract reusable components. The centers will also be able to dismantle and assort those natural ELVs for remanufacturing purposes.
On this account, the development of automotive authorized treatment facilities (ATF) framework has been proposed under the NAP 2014 aftermarket enhancement initiatives.
The ATF framework will serve as a guideline to transform the automotive after-sales businesses in relation to efforts in developing a green and sustainable automotive industry within the sales, services, spare parts supply and repair sectors.