China to promote auto parts remanufacturing business
The National Development and Reform Commission (NDRC) recently launched a pilot project to recycle and rebuild auto parts in China following
the announcement of “ Administrative Methods on Auto Parts Re-manufacturing ” in early March, 2008.
After signing letters of commitment, 14 manufacturers including FAW and Shanghai- Volkswagen are required to try out the parts
remanufacturing program focusing at present on five products, namely, engines, transmissions, electric generators, starters and converters.
According to the new policy, the parts re-manufacturers are not allowed to purchase five types of power train products
from those firms engaged in the auto scrapping business. They are forbidden to recover or rebuild products from unauthorized firms, either.
In principle the recycling products should not be inferior to the original in quality, and they are banned to sell directly on the retail market.
With special treatment in washing, repairing and surfacing, auto parts remanufacturing technology enables the used parts to recover the performance
as if they were new. In fact, over 90 percent of the parts in vehicles can be recovered and recycled to reduce above
40 percent of the cost while ensuring quality performance. For example, a new engine may cost about ¥13,000 ($1,857),
but using a rebuilt engine of the same performance can save ¥5,000-¥6,000.
“Now China has over three million units of vehicles to scrap every year,” said Xie Zhenghua, NDRC’s deputy director.
“So apart from improving our technologies in parts manufacturing, we have to set up encouraging policies
and systems to ensure the quality of products in the remaking process.”
China is expected to have 65 million units of motor vehicles nationwide with an annual trash of over four million units by 2010.
Suppose the reused parts account for 5 percent of the market share, there would be an enormous parts market of ¥3.3 billion.
But the value of the rebuilding parts is just as small as ¥700 million in the country today.
Remanufacturing business has been matured for scores of years in western countries including the United States and Canada.
The parts recovery of motor vehicles in these countries reaches more than 80 percent on average, covering a wide range of products,
such as engines, conveys, clutches, steering gears, starters, carburetors, pumps, air conditioners, breaks, buffers, etc.
Remanufacturing saves energy, reduces environmental pollution and generates employment.








