Friday, 22 March 2013

Automotive recyclers and OARA

I was a guest this year at the Ontario Automotive Recyclers Association (OARA) Annual Convention and Trade Show this week in Toronto. Much thanks to the Association and its members.
This is an industry in change:

  • Information technology has provided new tools for tracking product and reaching customers.
  • Trade has broadened horizons, from a what was largely a localized business to regional markets that reach into Quebec and the USA, and overseas. Chinese brokers are now resident in the province as ready buyers of high value components like catalytic converters containing precious metals. 
  • The industry is consolidating as bigger operators have come in buying up key locations.
  • There is continued power alignment in the "auto parts triangle" of actors: 
    • recyclers buy scrap and end-of-life vehicles to dismantle
    • body shops purchase used parts, as a lower price "alternative" to new OE parts
    • insurance companies, who are more and more at the top of the pyramid, enforce standards in cost, quality and delivery time necessary to serve (and retain) their end-customers.
  • Slowly creeping up on recyclers is the reality of the modern car:
    • full of electronic gadgets, motorized components and new complex materials -- all with unclear  value and re-use market demand, and  
    • then there are the hybrid and plug-in electric vehicles coming next.

One interesting observation was the promulgation of on management systems (electronic and otherwise) and the propagation of  certifications of assurance of responsibility, quality and environmental practices.