JARA NEWSfrom
Japan Automotive Recyclers Alliancewww.jara.co.jp

March 2018, No. 121

Published by JARA Corporation
Tokyo Head Office: Shinawa Bldg. 1-2-2-7F,
Nihonbashi, Chuo-ku, Tokyo JAPAN 103-0027
Phone: +81 3 3548 3010 / Fax: +81 3 3231 4690
the vehicle is exported. The ELV, which ourrecycler must accept first, goes abroad. I feel weare in a crisis.” Yukio Sato, Chairman of the NGPGroup warned, “…distribution of recycled parts is
now in a bad condition. Selling price of such parts
go down as we dismantle much more vehicles.”Horiyasu Koyama of Japan Parts Association
pointed out by saying “…users are increasingly
getting recycled parts directly from the Internet
such as Yahoo! Auctions, not through recyclers.
This might become the mainstream of distribution.”

Meeting of the representatives ofgovernment, industrial and acedemia

Active discussion to revitalize therecycling industry

Current status and issues in
the automotive recycllingmarket (1)According to the Automobile Recycling
Promotion Center, in 2017, the unit volume of endof-life-vehicles (ELVs) accepted by the designatedcollecting operators increased by 7.7 percentcompared to the previous year to 3,277,142 units.
It marked yearly gain for the first time in three years.
However, concerns in the recycling businesses
remain. JAERA’s Sakai noted, “It is a fact that thegeneration of ELVs would decline in the longterm. The scrap steel market is also largely
affected by external factors. Therefore, theuncertainty about the future would remain.” Sosho
Kitajima, President of Japan Automotive Recyclers
Alliance Corporation (JARA), also pointed out
severe conditions and said, “Although thetransaction volume and sales inside our system areincreasing, the performance of total all JARA
group members might be less than the previousyear. Future of the market is severe.”
The truck recycling industry has also felt theuncertainty. Maki Miyamoto, Chairman of theJapan Truck Refine Parts Association said, “…newvehicle market for heavy- and middle-duty trucks inJapan ran on below the previous year’s level sincelast autumn. Used vehicle sales might also show
similar performance in the near future. This might
put a negative impact on the vehicle repair business(which is a customer of the recycling business).”–– The first report from the AutomotiveRecycle Summit ––The Daily Automotive News hosted its “4thAutomotive Recycle Summit” on February 2, 2018 ata hotel in Tokyo. Recycling industry leaders,g o v e r n m e n t ’s a d m i n i s t r a t i v e o f f i c e r s , a n d
intellecturals persons participated in the event. The
attendees shared information on the current status ofand issues in the automotive recycling market, andparticipated in an active discussion. This is the firstreport on the event.

Higher scrap steel price helps the recyclingindustry
In 2017, the recycling industry witnessed a
drastically change when compared to the previousyear. Hiroyuki Kurihara, Chairman of the Japan
Automotive Parts Recyclers Association said, “Ourindustry, as a whole, is helped by the scrap steelmarket remaining at a high price.” Yasuo Sakai,
C h a i r m a n o f t h e J a p a n E LV R e c y c l e r ’s
Association (JAERA) also noted, “The scrap steelmarket has been recovered compared to two yearsago.” Apparently, the surge in prices in the scrap
steel market, which began in the latter half of thelast year, has been supporting the recyclingbusinesses.
On the other hand, Tsuyoshi Ishigami, Total
Car Recycle Group warned about the future, bysaying “I agree we are witnessing a good time, but
we should take the situation lightly. The businessis bipolar in our industry.” Tiyoshi Tsubo,
Chairman of the East Japan Automobile
Dismantlers Association, pointed out, “As for
scrap steel business, it is not a very good time
because the purchasing cost is high.”
ELV generation increases for the first timein three years

Increased export of old vehicles, a factor ofhigh cost of recycler’s purchase
The most common problem that automotive
recyclers face is the ncreased cost of used vehicle
from which they source their parts. Atsushi
Hattori, President of a major recycler group, BigWave, said “there is a keen competition to source
parts from used vehicles. At auto auctions, ourrecyclers are forced to get high-priced vehicles
because buyers (exporters) of such vehicles also
aggressively place bids. Masayuki Harigaya,President of Auto Recycling & Reuse Management
Center Inc. said, “…purchasing cost is becoming
high due to increased exports of vehicles.”The flow of ELVs to overseas has been a longstanding problem since the Automotive Recycling
Law came into effect in 2005. “Under the law,
exporters receive a refund of recycling fees when

Players join forces to improve the pricescenario
Meanwhile, many attendees pointed out thecost hike in parts transport. NGP’s Sato said, “…
the transport cost is becoming higher than that ofparts. That blocks the proper flow of parts
distribution.” Kaoru Okuma, President of SSG,
showed an evidence in the following words, “thetransport of a 15,000-yen door panel from
Hokkaido to a Japan Sea side location costs morethan 30,000 yen.” He appealed to beyond fence
action in the following words, “We are thinking of
how to improve this. But this problem must besolved beyond the boundary of each group. We
want to go forward with the support of others.”
Norihiko Kondo, Chairman of RUM Alliance,
said, “We don not think of the automotive
recycling industry, society, and environment as
separate entities. We need to think about how
these relate to each other to transform our businessmodel and set up a sustainable company.”
Keeping Japan from becoming an exporterof industrial waste
Kenichi Togawa, Professor of Kumamoto
University, said, “So far, Japan’s vein industry
including recycling, relied on China. Where
should we go from here? Should we opt fordomestic resource recycling or international
resource recycling? Both might be crucial in termsof economic development. Nevertheless,initiatives must be taken to keep Japan frombecoming an industrial waste exporter.” He furtheradded, “…a turning point in the industry will
come in 2017 and 2018 when the business witnesschange following the implementation of a strict
policy to regulate industrial waste export fromChina.” (Daily Automotive News, Feb 8 issue)

Transport cost hike casts a shadow overthe parts distribution

JARA NEWS No. 121 March 2018 Page 2

Mogee's business focuses on efficient
operations

Mogee, a JARA member,develops used car businesscentering on recycling
Mogee is a recycler and used car sales company
in Watari-cho, Miyagi Prefecture. The company iscultivating a new demand for the reuse parts not
sold by others for the exterior and interior, throughthe Internet. As a working environment, thecompany offers its unique working shift in whichfemale employees can work comfortably as wellas efficiently. Through its unique approaches, thecompany is seeking a new business model.
Mogee was established in July 2011 after
the Great East Japan Earthquake hit. Company
president Hiroshi Mogi recalled, “Numerousvehicles were damaged by Tsunami disaster atthat time. I was asked from my acquaintance totake part in dismantling such damaged vehicles.”He quit his office job and along with his partner,
set up a company to be involved in recycling
damaged vehicles toward the reconstruction fromthe disaster. One year later, his company joined theMiyagi Prefecture Used Vehicle Dismantling andReuse Parts Wholesale Association (MTK). “Wehave learned a lot from the MKT members,” saidMogi. He accumulated the know-how of proper
recycling process and parts sales.
Women activation-oriented work place

JAERA and JAPRA to finalize
merger talks
General Assembly to take placein June
The Japan ELV Recyclers Association(JAERA) and the Japan Automotive Parts
Recyclers Association (JAPRA) unveiled thatthey have agreed to finalize their talks for amerger. The two associations plan to include
JAPRA executives to JAERA board and aim
to obtain approval from JAERA’s General
Assembly to be held in June this year.
JAERA will receive 13 directors fromJAPRA. JAERA seems to firmly establish
its policy. “One has to sink one’s differences
for the sake of common good,” JAERA
Chairman Yasuo Sakai said. In the wake of theMogee's headquarters factory operates
ELV purchasing and recycling, as well as
recycled parts production

Female employees work with registrations
and packaging

One of Mogee’s features is the lineup ofreuse parts category. It includes caps of gasoline
tanks, and fuel filler openings and glove box(compartment) that are not sold by othercompanies. These are on sale mainly through theInternet. “There is a gap between demand for, andsupply of, parts. We always seek for the one thatsells well,” said Mogi. With a view toward thefuture business development, he conducts a study
meeting every week.
Many female employees are active in thecompany. In addition to the front desk staff,
female employees are engaged in the production
and packaging work. “Working hours and days
are flexible to fit their family circumstances,” saidMogi.
Two years ago, he started used vehicles’ sales
and purchasing business. In the newly constructed“Natori Shop,” there is a wide lineup from under
660cc minivehicles (K-cars), minivans, to SUVs.
In the showroom, used tires, used wheels, andelectronic toll collection (ETC) devices areavailable. Customers often ask the shop for vehicle
maintenance, as well as seek the reuse parts for
dress-up, audio, and car navigation systems. These
efforts contribute to the improved awareness about
the reuse parts in the society.

poverty-support solutions, and three Japanesecompanies, it will enter the Social Business.
President Mogi visited Bangladesh, jointly withthe partner company Sun Power Co.’s president
Takuya Kawamura, and witnessed the local
situation with his own eyes. He decided to invest
on the joint venture: according to him, “we canhelp people struggling with poverty.” The joint
venture is expected to have a combined facility for
automobile repair and dismantling. President Mogi
has taken up the responsibility of hiring students
and educating them with the vehicle repair anddismantling technologies.
Mogi focuses on a unique combination of thebusiness development namely, providing femaleoriented workplace, used vehicle sales, and social
business. He has a strong passion toward raising
the awareness about his company and automotive
recycling business. He also aims to hire senior
generation staff. Six and a half years from thestart of the operations, Mogee is stepping forward
to a sustainable business development. (Daily
Automotive News, Feb 25 issue)

Active to social contribution
The company will commence a new businessthis year. Through a joint venture with a
Bangladesh-based Grameen Group, which pursues
approval in June, the two associations will
form a new board member. They will thenappoint dedicated executives to prepare theorganizational merger. Nobuo Shimizu will beinvited to be a member of the executive team in
addition to six members from each association.
It has been more than a year since the twoassociations began to move toward the merger.
Although they held periodic meetings duringthis time, the fact remains that oppositions
arose in a particular matter.
Nevertheless, in a drastically changing
environment of automotive recycling, an earlymerger is inevitable as it will help obtain theindustry’s job certification and make industrywide efforts toward the review work of theAutomotive Recycling Law.
In fact, talks for the merger have simply
reached the final step. This is just thebeginning.

Natori Shop handles used car sales andpurchasing, as well as reuse parts sales

CO2 Reduction Effect(based on JARA System)

The use of Reuse Parts saved

2,392 tons of CO2 emissions
in January 2018
The reference figure represents the difference of carbon
dioxide (CO2) emissions at the vehicle repair usinggenuine (new) parts and recycled parts.**: Based on "Green Point System", which was jointly
developed by the Japan Automotive Parts Recyclers
Association and Waseda University Environmental
Research Institute using a life cycle assessment (LCA)technique.

JARA NEWS No. 121 March 2018 Page 3

Dismantling process flow chart
How the Car Dismantling machine works
1. Receiving andevaluating cars
Incomingvehicles testedon dynamometerto check engine
condition

3. Parts collection

4. Collecting
undercarriage
parts and engines

Efficiently collectreusable parts

The car is turned to safely
collect engine, exhaustsystem and suspension parts

Remove fluids such as fuel, various types ofoil and chlorofluorocarbon gas

13Cu

Al

CopperAluminium

63.546

Tyres

Batteries

Doors

Seats

Bonnets

ExhaustEngine Suspension

After treating, the scrap cars
are cut up and crushed orpressed into materials thatmeet industry needs

After pre-processing,
the car is sorted into raw
components such asferrous, non-ferrous andplastics
29

2. Collecting fuel, fluids andchlorofluorocarbon gas

6.Volume
reduction
processes

5. Car dismantlingprocessHarnesses

MotorsRadiator

26.982Blocks of material can then be
distributed to smelting plants
for recycling

5. Processes
after removing
parts
Once thoroughly
cleaned, the parts
become good quality
recycled parts

The Evolution of car dismantling industry by Kobelco
Four times* the vehicle dismantlingcapability compared with hand dismantling.

EngineCatalytic
AgentsBody SteelSeats

Improved recovery
rate of rare earth metals
Windows261329

78

46

FeAl

CuPt

Pd

Iron

Aluminium

CopperPlatinum

Palladium55.933*In one day (Kobelco test figures)

15 vehicles >Wheels/Tyres

26.98263.546

195.08106.42

Separation of these valuable
materials is quicker and easierand can be performed with one
Kobelco machine.

Sus pension

One operative
working by hand.
Radiator

60 vehicles >One operativein a Kobelco
Car Dismantlingmachine.

BrakesFront & Rear
Bumperswww.kobelco-kenki.co.jp/

www.samjung-kenki.co.kr/

KOBELCO CONSTRUCTION MACHINERY AUSTRALIA PTY LTD
www.kobelco.com.au/

FAIR FRIEND ENTERPRISE CO.,LTD.
www.ffg-tw.com/

The machine’s special attachment
is designed to strip materials from
End-of-Life Vehicles (ELV)safely and thoroughly
Transmission

For Japan

For Korea

For Australia

For Taiwan

DoorsHarnesses

www.kobelco-jianji.com/

www.kobelco-usa.com/

www.kobelco-europe.com/

For China

For North America

For Europe