Enhancing values of reused parts via remanufacturing
Despite the uncertainty on their safety aspects, the "reused" or commonly known as "reconditioned" parts and components are popular amongst local motorists for their vehicles maintenance practices.
Sales of these reused parts have since mushroomed and are attributed to economic reason being one, while the other being a common believe that it is only logical and economical to use reused parts and components if the cars are old.
Demand for these reused parts and component will continue to be on the rise as the current average "end-of-life" age of local passenger vehicles is 20 years.
Reused parts and components trading has started in the local scene some 20 years ago and has developed to become the import and re-export hub for the region.
Quality used parts are brought in from established remanufacturers such those from New Zealand, Australia, China, Korea, Germany, the UK and the largest are from Japan which made up 80% of the total imports. While majority buyers for the parts are from the Middle East and the African Nations.
Currently it is estimated that Malaysia imports some total of USD200 million worth of reused parts and component annually.
While some 30% are for local consumption, the balance 70% are re-export without much value added activities carried out on the parts and components prior to exportation.
Realising the importance of the used parts industry with its promising business potential, NAP 2014 is resolute to transform the sector to become the regional hub for reused parts and components production in the region. This can be achieved through a more organised "remanufacturing" industry structure.
Malaysia has the potential to build a strong remanufacturing industry with its existing manufacturing base, and the current availability of an established and sound reused parts industry.
Transforming the existing reused parts importers and re-exporters to incorporate more value added activities through remanufacturing of the imported parts will enhance the export values of those parts. The agenda may contribute a further RM3.2 billion to the total automotive export 2020 target as envisaged by the NAP 2014.
However for the remanufacturing industry to flourish, the following initiatives and measures are essential; Skills development for remanufacturing, establishment of a quality control framework around an official remanufacturing definition and quality seal for remanufactured products, clarification on trade conditions for remanufactured goods and promotion of the supply and demand for remanufactured products through environmental policies.
Strengthening supports for pilot companies in automotive parts and components remanufacturing and promotion of qualified remanufactured products will further help to boost remanufacturing development in the country which will bring economic benefit in the longer term.
In addition development of peripheral industries in support of the remanufacturing activities, such as; parts and components collectors, professional recyclers, disassembling and cleaning operators are equally important to help in enhancing the efficient operation of the remanufacturers.
In this respect establishment of "Authorized Treatment Facilities (ATF)", with an appropriate framework, are essential to assist in providing the parts and components input to the remanufacturing activities.
However, public understanding of remanufactured parts and components and their terms and conditions for use is equally important.
Clear definition of the term "remanufactured" and its relative differences to reused, refurbished or repaired part must be made well understood.
European Association of Automotive Suppliers (CLEPA) defines a remanufactured part as a part that fulfil a similar function to the original part, remanufactured using a standardised industrial processes in line with specific technical specifications. The processes incorporate defined core management standards and remanufactured part is warranted as a new part.