India End-of-Life Vehicle (ELV) and Dismantling Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

India End-of-Life Vehicle and Dismantling Market Analysis

The Indian ELV and dismantling market was valued at USD 5,979.7 million in 2023, which is expected to grow at a CAGR of 17.6% during the forecast period (2024–2030). The key drivers for the market are the rapid closure of unregulated scrap yards, recent laws related to vehicle life, and supportive government policies.

In the wake of growing air pollution in major cities of India, the Supreme Court of India and the National Green Tribunal (NGT) had given deciding and milestone judgments, by reducing the life of vehicles to 10 years and 15 years for diesel and petrol vehicles, respectively, for Delhi-NCR.

This had created suasion on the government to legally identify the age of vehicles across the country. In this regard, 20 years is regarded as the age of all commercial vehicles in India, following which they would be unregistered from the records. This will provide a much-needed boost to the industry’s morale.

Although the action of regulatory bodies on illegally operated scrap yards in different parts of the country will lead to the loss of employment and business in the short term, like any crisis situation, it is bound to boost regulatory practices, which will propel the organized market growth and motivate more OEMs and entrepreneurs to join the technology-driven business.

India End-of-Life Vehicle and Dismantling Market Trends & Drivers

Advancing Dismantling Techniques with Single Window Clearance

• Currently, the market is dominated by the unorganized sector, where scrap dealers buy ELVs from end users or through auctions. They have limited capacity for capital expenditure.
• The trend has been set for major OEMs, such as Mahindra & Mahindra Ltd., Maruti Suzuki India Limited, and Toyota Kirloskar Motor, to invest in technologies for dismantling processes of ELVs for sustainable materials extraction in an environmentally safe way.
• Processes, such as deregistration of ELVs, IT support, de-pollution, and shredding, are being centralized and done from a single facility. The certificate of deregistration of a vehicle is issued to the owner instantly, which makes the vehicle unfit to operate on the road and assures him/her of safe disposal of the vehicle.
• All the processes of recycling, such as de-pollution, dismantling, shredding, and treatment of shredded residue, are done at a single location, making it environmentally sustainable and economical in operations.

Government Policies Are Driving the Market

• Various Ministries of the Government of India, such as the Ministry of Road Transport and Highways (MoRTH), the Ministry of Steel, and the Ministry of Heavy Industries & Public Enterprise, and many state governments have come up with guidelines for setting up and operating vehicles scrapping centers to create a viable ecosystem for scrapping of old vehicles for transition to environment-friendly new vehicles.
• The guidelines also reflect the endeavour and seriousness to embrace global best practices by adopting state-of-the-art, environment-friendly technologies.
• Ferrous scrap being the primary raw material for EAF-/IF-based steel production, the government policies envisage a framework to facilitate and promote the establishment of metal scrapping centers in India.
• This will ensure the scientific processing and recycling of ferrous scrap generated from various sources and a variety of products.
• The framework shall also provide standard guidelines for collection, dismantling, and shredding activities in an organized, safe, and environmentally sound manner.

Land Scarcity and Cost Barriers

• The Indian end-of-life vehicle and dismantling market requires a good amount of area for its operations. This becomes a challenge in the country, as per capita land availability is limited and prices of the land sometimes are too exorbitant.
• This problem becomes more consequential if the land requirement is near urban settlements, which are usually the choices of dismantlers, due to a large number of vehicles in operation.
• The major restraint in the Indian end-of-life and dismantling market is the requirement of high capital expenditure (CAPEX) and operational expenditure (OPEX).
• Market participants from both the unorganized and organized sectors need to have a high purchasing capacity to buy ELVs.
• Technologies, which will have a great role in the market operations during the forecast period, will further increase the setup cost.

In-Depth Segmentation Analysis

Fuel Insights

• Diesel is a larger category, with a market share of around 70% in 2023, as well as it is the faster-growing category in the market. This is due to the substantial reliance on diesel as fuel by four-wheeled passenger and commercial vehicles and heavy-duty vehicles.
• Moreover, diesel engines are usually preferred due to their fuel efficiency and reasonable cost, particularly in areas where vehicles work on long routes.

Further, fuel has two categories:

• Petrol
• Diesel (Larger and Faster-Growing Category)

Sector Insights

• The unorganized sector held a larger market share, of around 75%, in 2023. This is associated with the lack of regulatory policies, which have helped unorganized players prosper.
• Vehicle dismantling in India is majorly handled by thousands of small local players, as the market is still in its primitive stage.
• On the other hand, the organized sector is expected to witness a higher CAGR, of 17.8%, from 2024 to 2030 in the market. This growth is due to the growing awareness about environmental issues.
• This sector is well-situated for implementing ecological practices and fulfils the demands of environmentally conscious consumers.

During the study, we analyzed two sectors:

• Unorganized (Larger Category)
• Organized (Faster-Growing Category)

Component Insights

• The ferrous metal category dominated the market with a share of around 25% in 2023. This is owing to the large usage of steel in vehicles.
• In the automotive sector, there are several components of vehicles that are manufactured from ferrous metals. This includes engine blocks, chassis, and different structural components. Consequently, a significant amount of ferrous scrap is produced from the dismantling process.
• Additionally, ferrous metals can be separated easily from non-ferrous materials during the dismantling process, which makes the recovery and recycling more efficient of ferrous metals.
• Whereas, the electrical and electronic equipment category is projected to grow at the highest CAGR of 18.3% from 2024 to 2030 in the market. This is owing to the increasing autonomy features in vehicles and growing usage of shared mobility, like cab and taxi services, which require a large number of electrical and electronic equipment.

Further, components are divided into:

• Ferrous Metal (Largest Category)
• Non-Ferrous Metal
• Plastic
• Electrical and Electronic Equipment (Fastest-Growing Category)
• Textile
• Tire
• Battery
• Glass
• Others

Vehicle Insights

• The two-wheelers category dominates the market, with a revenue share of around 45% in 2023. This is because India has a large number of two-wheelers on its roads.
• Two-wheelers have gained so much popularity in urban commuting due to their fuel efficiency and flexibility.
• The demand for two-wheelers is also increasing in heavily populated urban areas, which results in a large number of retired vehicles.
• Whereas, the four-wheelers category is projected to witness the highest CAGR, of 17.9%, during 2024–2030.
• This can be because of the increasing ownership patterns of four-wheelers, both in passenger and commercial domains, due to favorable economic growth and rising disposable income in the country.
• The introduction of ride-hailing services in India is also expected to boost the growth of the market in this category during the forecast period.

During the study, vehicles are categorized into:

• Two-Wheelers (Largest Category)
• Three-Wheelers
• Four-Wheelers (Fastest-Growing Category)
• Passenger
• Commercial

Maharashtra is Largest and Delhi is Fastest Growing State

• Maharashtra is the largest state market in India, with a revenue share of around 30% in 2023. This is because the state has led the rally with the highest market number since it has the highest gross state domestic product (GSDP) in India, thus residents have higher purchasing power than other parts of the country.
• The NCT of Delhi is the fastest-growing state market, advancing at a CAGR of 18.4% from 2024 to 2030. This growth is because of stricter norms for vehicles due to high air pollution.
• The NCT of Delhi has been facing air quality issues for a very long time, due to which strong environmental regulations are made.
• These regulations play a crucial role in the more active approach to ELV dismantling and recycling, which further supports the focus of the city on sustainability and a green environment.

Further, these states were analyzed for this report:

• Maharashtra (Largest State Market)
• Tamil Nadu
• Uttar Pradesh
• Gujarat
• Karnataka
• Rajasthan
• Madhya Pradesh
• Kerala
• Delhi (Fastest-Growing State Market)
• Other States

Market Nature - Consolidated

The market is being driven by government policies and guidelines, environmental concerns, and growing awareness of sustainable practices in the automotive sector. Various key players like Mahindra MSTC Recycling Pvt. Ltd., Tata Motors Limited, and Maruti Suzuki Toyotsu India Private Limited are investing huge money in advanced technologies to improve the efficiency of the dismantling processes, which helps them to stay ahead of the competition.

Additionally, to take advantage of the vast growth potential of the Indian end-of-life vehicle and dismantling market, several organized companies are constructing recycling facilities.

Indian End-of-Life Vehicle and Dismantling Industry News

• In November 2022, Honda Cars India Limited signed an agreement with Maruti Suzuki Toyotsu India Private Limited to provide its consumers with a solution for scrapping their end-of-life vehicles (ELVs).
• In November 2021, Maruti and Toyota combinedly started a vehicle scrapping and recycling unit.