Banner Vehicles July 2019

How has COVID-19 affected Auto Dismantling?

DismantlingThe Automotive dismantling and recycling industry was in reasonable heart prior to the COVID outbreak and because the industry was finally considered essential by the Government, dismantlers continued working in part or in some cases throughout the pandemic and continue to do so currently.

The difficulties to arise at the start of the pandemic was a sharp downturn of suitable or available vehicles for dismantling, followed quickly by the New Zealand’s government requirement to alter the working environment to assure the health and safety of workers, suppliers, freight contractors and customers.

Some dismantlers chose to close for a short period of time, others continued to stay open. Some noticed a downturn while others experienced a small increase in business activity, everyone was affected differently.

Auto PartsThe lack of suitable vehicles to purchase at the time was due to a couple of factors. The uncertainty of COVID saw vehicle owners not wanting to quit their cars and simply chose to keep them in the garage or driveway.

Then with LEVEL-4 lockdowns, no one was driving, so insurance claim auctions reduced to a minimum, reducing available vehicles to purchase for dismantling.

Also, we saw the shutdowns affect the economic activity in New Zealand with new and used automotive sales dropping to record lows.

An unseen outcome of this unprecedented time was that vehicle owners were unsure whether they would have a job or income or what government restrictions would be introduced in the future.

At the same time, new vehicle part manufacturers throughout the world started slowing down or completely shut down, so new parts were harder to buy. With freight delays and the supply-chain problems proving to be a barrier, the older used vehicles started to hold more value.

Auto Supply ChainWhile the pandemic certainly has altered the dismantling and vehicle industry in the short term, new car sales have continued to be down or flat, resulting in an increased demand for used cars and used parts and subsequently, an ongoing increased value of older used cars overall.

Checkout any news site, the COVID-19 pandemic is having a major impact throughout the world, and on how workers are doing their jobs and people are living their lives. Things like wearing masks, social distancing, isolation, living in bubbles, contactless delivery, wearing gloves, to cordoning off workspaces.

Today’s businesses are doing whatever it takes to get back to doing business as usual while keeping everyone safe. That is true for the automotive dismantling and recycling industry as well, as business owners and their workers tackle changes in the structure of their dismantling and inventorying processes, their parts handling, and their interaction with customers and delivery systems.

In fact, many businesses including dismantlers have been forced to rethink their business models and how they might work in a contactless environment. In addition, they have had to react quickly to the pandemic. They have had to modify stores with COVID-related signage, barriers and navigate new rules for engaging with customers.

An e-commerce focus, especially in the light of the pandemic has helped with many forms of Online business systems like online and Trademe store sales. Consumers are embracing online purchasing like never-before and that includes the automotive industry.

Notably, the advances in technology and the increased use of the internet to sell and buy used vehicles and parts has helped the dismantling industry, especially during the COVID-19 pandemic.

November 2021


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Automotive Recyclers Association


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