Disadvantages of the development of Petrol Car parts industry

1. Insufficient recycling volume restricts the sustainable development of remanufacturing enterprises. Policy restrictions also make the number of Petrol Car parts relatively small. According to the State Council's Order No. 307 "Regulations on the Recycling Management of Scrapped Hongqi Car" which is still in effect, the "five major assemblies" including engines, transmissions, front and rear axles must be sold to steel companies as production raw materials. But in fact, many of these assemblies are resources that can be remanufactured. This has caused the policy to cause insufficient recycling volume for remanufacturing companies.

2. The order of the remanufacturing industry is chaotic, and formal companies face unhealthy competition from "miscellaneous brands". For formal Petrol Car parts remanufacturing companies, the price of recycling scrapped companies is generally based on the market price of scrap iron. Taking a Jetta sedan facing scrapping as an example, the company pays the owner about 1,000 yuan. Some small workshops that lack qualifications rely on private sales of engines, transmissions and other assemblies to obtain huge profits.
Take a 10-ton scrapped truck as an example. Because the "five major assemblies" cannot be sold according to regulations, formal companies mainly rely on selling scrap steel to make profits after dismantling. Many sell for 20,000 yuan, and the purchase price cannot exceed 12,000 yuan, otherwise it will lose money after taking into account costs and taxes. However, underground dismantling plants can purchase at a price of 20,000 yuan or even more, because at least by illegally selling the "five major assemblies", they can make a lot of money. For example, the engine of a large truck can be sold for 7,000 yuan, and the rear axle can be sold for 8,000 yuan. In this way, it is not difficult to sell a car for 25,000 yuan or even more.