Chris Wright, Managing Director at cap hpi, provider of vehicle values & technical data in the UK automotive sector, discusses how supply issues of new vehicle parts has created a demand for more green parts.
The supply of car parts took several hits during 2020 and 2021, with fewer new parts reaching the UK than at any point since 2012. COVID-19, Brexit, European driver shortages in the UK, and the slow predicted reboot for the automotive industry have all meant that body shops and vehicle repairers are routinely struggling to source parts quickly and reliably.
Supply issues have become global, with the UK, Europe, and the US markets all affected. The whole industry has been disrupted by a semiconductor shortage, which has severely delayed the production of new cars and put increasing pressure on the used market, which, in turn, means a greater demand for parts. It has become a vicious cycle. According to GIPA UK, 65% of franchised dealers said they had experienced ‘unusual parts supply issues’ in the first quarter of 2021.
In the world of vehicle repairs, parts availability is vital for closing deals. Customers rely on their cars, and nothing drives them to a competitor faster than the idea that they will have to wait days or even weeks for their car part. As a result, in the past decade, both manufacturers and independent motor factors have put huge emphasis on achieving as close to next-day supply as possible.
To that end, industry players are having to find alternative ways to meet this new demand for parts for repairs and best serve their customers faster and through more sustainable means.
Dispelling Green Part Myths
With an intelligent green parts system that connects body and repair shops with suppliers in the original equipment manufacturer (OEM) and recycled parts marketplace, a solution is presented. Once repairers are directly connected with a certified supplier, repair shops are able to buy the second-hand part with full documentation and an estimated arrival time.
However, there have been many narratives circulated around the industry that have previously put a halt to vehicle repairers using green parts. For example, that green parts lie outside the traditional supply chain, and customers want new parts and query around quality assurance. The green parts market has actually progressed exponentially with state-of-the-art solutions now in place to combat all of these misconceptions, such as comprehensive catalogues that find green parts just as fast as sourcing any other part.
It is also presumed that customers want new parts, but evidence suggests that customers want their vehicles fixed as fast as possible, and 94% of those surveyed said they understood the environmental benefits of green parts. Interestingly, since the 2003 End of Life Vehicles regulations, manufacturers and salvage operations have been on a recycling journey and re-use in the automotive world. New cars already contain a lot of recycled material, for example, 20% of all plastic parts on Toyotas are recycled. Most consumers are eager to embrace the circular economy that encourages reusability, buying green, refurbishing and avoiding waste.
Finally, there have been hesitations towards green parts about ensuring quality assurance. Suppliers have listened and are now vocal about how they go about making sure green parts are up to scratch. For example, eBay independently certifies its sellers to ensure regulatory compliance and works closely with the VRA’s new standard for green parts sales. Synetiq and Trents are also VRA members and aware of the importance of quality assurance. Furthermore, the parts bought will be under warranty as described during the sale.
Cost Savings Via Recycled & Green Parts
Recycled or green parts are hugely cost-effective. eBay, which is a prime distribution route for salvage and refurbishment outlets, says that green parts can cost considerably less on its website than the sticker price of a new equivalent. For example, according to the Vehicle Recyclers Association, electric mirrors for a typical small car would be 81% cheaper.
Through smart solutions, such as the award-winning Audatex Green Parts Connector, which connect repair shops with the suppliers of green parts, technicians or claims executives can find and book a green car part in less than a second as part of a standard claim or estimate process. They will have the suppliers’ details, full price information and product codes. And, because these products are all already in stock, there are no delays in shipping.
Green car parts typically reach the workshop in no more than three days, but it’s often much faster. eBay estimates that 90% of its parts are available for next day delivery. So it’s faster to find, faster to buy and faster to complete the job.
Decarbonising the Transport Industry
Transport urgently needs to decarbonise, and this includes how we maintain and repair vehicles. The 2003 End of Life Vehicles regulations means that 95% of vehicles must be recovered and 85% recycled by weight. Reusing, refurbishing or remanufacturing original parts is a crucial part of this. This means green OEM parts are readily available.
The carbon footprint of a recycled or green part is far lower than that of a new import. It gives more benefit for its to-date ‘carbon cost’. It lowers the demand for new materials such as steel, rubber or minerals. A local green part also has a lower carbon footprint than a new import because its transport is minimised.
It’s clear that consumers actively want greener options. A recent pan-European IPSOS Mori survey found that 40% of consumers will buy or lease an electric vehicle next time they are in the market. This means that green car parts are a very powerful sales narrative. What’s more, the use of green parts gives a CO2 saving of almost 2,000 tonnes per vehicle. If all insurance claims were filled using green vehicle parts, it would save 47,000 tonnes of CO2.
Market Maturation in 2022
The use of green parts meets the commercial and operational needs of repairers, fulfils the requirement from vehicle owners and positively contributes to environmental protection. Green parts adoption is on the rise, and it’s clear that repairers and consumers alike are ready for this shift to recycled components as we head into 2022. The green parts market is slowly maturing and becoming more structured and service-oriented, with established standards.
Finding sustainable and greener solutions is not only common sense today, but it may well be mandatory tomorrow. The future of business must be commercially, operationally, and environmentally sustainable. The green parts notion will help insurers and vehicle repairers achieve just that.