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The good and the bad of 2013

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The auto recycler has seen a few ups and downs over the past year but as long as there are cars we shall find a way to process them profitably.
The last year has seen plenty of changes and as it’s the start of a new year, we thought we would take a look at the good and the bad for auto recyclers during 2013.

The year has had its fair share of issues and none have been bigger than insurance salvage classifications. The problems caused to auto recyclers by this topic have been raised again and again throughout the year. Whether it’s insurers changing classifications for short term gains or that cat B’s are going back on the road, it is the dismantler who gets penalised by unrealistic prices for vehicles that can’t be processed profitably.

We know MVDA have put a lot of effort into this problem and their Secretary, Chas Ambrose told atfPro that the pressure on insurers was starting to have an impact. Hopefully we shall see serious improvements by the insurers in the coming year.

Added value was also a big theme in 2013. After all, you have the vehicles so why not maximise the return from each. Over the year we took a look at a number of ways to increase profitability. Machines such as Overton’s Auto Dismantling System and more recently, Powerhand’s Vehicle Recycling System allows the operator to remove and sort much of the material’s content left in the hulk into particular grades, thereby increasing the return from the materials element of each ELV. Added value doesn’t stop there. There’s also areas such as in house CAT de-canning and cable granulation that were both looked at.

Adding value through increased sales was also a hot topic with many now making use of on-line sales and local trade sales to bolster profits. We looked at operations such as Partspeed in Wales who have turned their vehicle dismantling business on its head. We also visited a bodyshop to find out what was wrong with green parts. This area has great potential but unless the bodyshop can be sure of what it’s getting, and that means standards, then they’re not interested. The next few years will hopefully see big changes (and big growth) in this area.

Airbags, an item that the manufacturers don’t want to be re-used was the subject of an independent survey by MVDA which found no evidence to suggest that a used airbag was any less safe than a new one. The summary did say that some SRS components should never be reused, such as any from water and fire damaged vehicles, or the key ‘controlling’ parts that cannot currently be tested (e.g. the central control units). Critically, not only has the company that produced the report put forward procedures for handling and testing the parts, but it has also developed a testing tool.

DVLA is another thorny issue for the industry. There are about 1.2 million Certificates of Destruction (CODs) issued each year in the UK but its widely believed that there’s 2 million vehicles being taken off the road. That leaves a staggering 800,000 ELVs unaccounted for. Any vehicle taken off the road to be repaired or stored has to be SORN’d and as the figures are publicly available we know they aren’t disappearing that way. We tried to find out what was happening using the freedom of information act but it clearly doesn’t apply to DVLA so this is an ongoing mystery.

Towards the end of the year we had the next layer of legislation fall on us - the scrap metal dealers act and the ban on cash. We wait to see what government can come up with next year in their constant fight to drive the industry into extinction!

On a company front, one that stood out in 2013 as forward thinking was FAB Recycling. Early on in the year they announced that they had secured contracts for the police force to supply parts for repairs. This in itself was major breakthrough but then later in the year they brought us FAB Bundle where you can buy the removed parts in bulk rather than a complete vehicle. The site only went live last month but we plan to follow it’s development as this idea not only creates a genuine wholesale market place but also ensures that those vehicles can’t go back on the road.

Business insurance has been a big problem for many over the last couple of years with both big players, Royal Sun alliance and Aviva pulling out. Luckily our insurance specialist, Anita Jones from Bollingtons has kept us on the straight an narrow, showing us what we need to do to be attractive to the market. No doubt this is an area we shall be revisiting in the new year.

There was lots, lots more as well and you can check out all of the stories by looking through last years newsletters (link in the right hand column). In the meantime, We would like to wish all our readers a prosperous New year and hopefully some new ideas on how to improve that bottom line....

January 2014

Latest stories

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It seems that there are some questions surrounding the purchasing of vehicles by other European countries, in particular Cat B vehicles. One of our readers asked us the following:
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