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There is a treasure in India’s car recycling venture

Ananya Sengupta
Ananya Sengupta
She is keen on research and analysis be it in the tech world or in the social world. She's interested in politics and political opinion and likes to express herself through music, penning down her thoughts and reading.

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With the tighter emissions standard in action, around 10 million cars are scrapped in the country by the government. A joint venture between an Indian and a Japanese company had unearthed a treasure trove in these scrapped cars.

Abhishek Group, an Indian company that manufactures airbags and other auto parts, has obtained a contract with Kaiho Industry, a leading Japanese auto recycling company in Kanazawa, Ishikawa Prefecture, to resell parts from scrapped cars.

The Abhishek K Kaiho recyclers venture, founded in 2019, had put an operating plant in action in the northern Indian state of Haryana in June, intending to build seven plants across the country within a time span of three years. Nitin Gadkari, the Raod Transport and Highways Minister, stated in his opening speech at the Abhishek-Kaiho plant ceremony in May that since the government is aiming to set up 2-3 recycling plants in each region to create jobs, the business of recycling cars shall see the face of growth in India.

In its attempt to regulate the industry and replace older, dirtier vehicles with newer ones, the Indian government announced guidelines for discarding vehicles in 2021. Commercial vehicles older than 15 and private cars older than 20 are inspected and scrapped if they do not meet emissions standards. U.S. consultancy A.T. Kearney estimates there are around 10 million so-called retired cars in India.

The Abhishek K Kaiho Recyclers company essentially tears down used vehicles after buying them from local dealers and sells usable parts to auto repair shops. Presently, the joint company plans to strip down 100 to 350 vehicles a month and aims for 100 million rupees ($1.28 million) in sales in its first year.

In 2016, Abhishek conducted an internet search that led to the venture. By emailing Kaiho, the company expressed a desire to work with the global auto recycler, which has operations around the world, to address environmental problems in India. Kaiho brings more than 50 years of experience dismantling used vehicles to the venture. It has been the company’s main business for the last 30 years.

Kaiho expanded into exporting auto parts after a Kuwaiti businessperson visited Japan and bought a large number of used auto parts from it at a high price. Kaiho then established its standards for assessing used parts and implemented an integrated system spanning everything from acquiring and dismantling used cars to selling parts. The company has expanded into 90 countries, including Thailand, Kenya, Nigeria, and Ghana.

Takayuki Kondo, the Kaiho president, stated that since the population of India is ten times more than that of Japan, the nation of India is full of energy and growth potential. A total of 3.65 million passenger cars were produced in India in fiscal 2021, up 19% from the previous year, according to the Society of Indian Automobile Manufacturers. As incomes rise, Indian middle-classes are more eager to purchase cars.

Despite the global shortage of semiconductors, Indian auto production has slowed. As the government plans to increase electric vehicle sales to 30% of all sales by 2030, the pile of used cars that need to be disposed of and the pile of treasure will grow.


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