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Technical advances in vehicles and globalisation increase risk of fraud and sub-standard repair

global market
With the market for salvage now global and vehicle repair requiring specialist techniques, the system is wide open for abuse.
Motor vehicle engineer, Andy Latham takes a hard look at the problems that have been created for the industry when you combine the effects of market globalisation and high tech developments in vehicle design and production. In this first part, Andy looks at the cross border movement of vehicles.

Recycling of motor vehicles is not new, the environmental benefits of the industry has been recognised over many years, in some countries since the introduction of the horseless carriage in the late 1800’s. The vast majority of these recycling businesses have been set up and run to high standards, but as is the case with all business, there are a few individuals who are slightly less than honest in their business dealings. Many countries recognise this and have steps in place to limit the potential for fraudulent activity, but these actions fail to recognise the global nature of motor salvage and the effect of vehicles moving across international borders.

Over the last 10 years the salvage marketplace has changed greatly, from being an industry that operated very locally, motor salvage went national and is now a global industry generating cash in the billions annually.

Andy Latham
The writer of the this article is Andy Latham, Compliance Manager for Bluecycle, one of the UK’s leading online car salvage auction sites and online auction technology specialists. They have been trading for over 10 years and specialise in car salvage, end of fleet, motorcycle, plant, equipment and commercial salvage, selling hundreds of vehicles each week to customers throughout the UK and Europe. Andy is a motor vehicle engineer with over 30 years experience in automotive retail, motor insurance and vehicle salvage markets, he is married with 2 teenage children and supports Southampton Football Club.
The flow of motor salvage around the world has significantly increased following the opening up of the EU, and, more importantly, the move into the internet age. You can now buy motor salvage 24/7 from on-line auctions around the world, vehicle parts are available on a mail order basis on 24 hour delivery, and cheap labour and skills are now being utilised from Africa, to India to Eastern Europe. Many of the salvage codes and guidelines written over the past 15 years have focused on the unique circumstances in each individual country. Unfortunately some of these codes fail to reflect the global nature of motor salvage, so what could be outlawed in one country is allowed in another, and the motor salvage industry moves motor salvage across borders to the best advantage of their business.

As an example, motor vehicle salvage is allowed to travel from Western Europe to former Soviet states like Lithuania, Poland etc. When these vehicles get there they can be used to repair other vehicles, or could get repaired themselves. UK sourced vehicles (RHD) are sometimes repaired and brought back to the UK, but many will be repaired, changed to LHD, registered locally and then sold on. One of the biggest markets is Russia.

The Association of British Insurers Code of Practice for Motor Salvage in the UK requests that the vehicle documentation for some salvage is destroyed. On export the Driver and Vehicle Licensing Agency in Swansea (DVLA) will issue an export document which can be used to register a vehicle in another country.

As re-registration requires original paperwork from the country of origin these documents are important – or are they? When a vehicle is presented to a registration office in Eastern Europe do they check with the registration agency in the donor country that the paperwork they have received is genuine? DVLA in Swansea have reported the theft of blank V5 vehicle logbooks over the past few years, where has this paperwork gone, and are these feeding a black market of repaired vehicles?

Many European countries also fail to control vehicle documentation for motor salvage, and in some cases large sums of money are believed to be changing hands for extensively damaged vehicles that come with ownership documents. This can only fuel the theft and ringing or cloning of same model and specification vehicles.

I am sure you agree, the market currently appears to be wide open to abuse. Next month we shall continue this article, taking a look at solutions to these issues.

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