Toronto, Ontario — With the coronavirus slowly putting a damper on business operations worldwide, industry analysts are suggesting the automotive sector could grasp this time of turbulence as an opportunity to up the global auto recycling game.
With pending parts shortages likely coming to North America in the coming weeks, car recycling companies are being advised by global industry analysts to prepare for a surge of demand for secondhand parts.
With as much as 15 percent of southwestern Ontario’s Tier 1 automotive supply already affected by global shutdowns, it is possible the province—and Canada as a whole—could see an increase in demand for quality recycled original equipment (ROE) parts.
The automotive industry is expected to take a nasty blow from the effects of the coronavirus crisis. Factories in China and Italy have been shut down in recent weeks, and the closures are beginning to spread to Canada. GM’s CAMI plant in Ingersoll, Ont. will be commencing a two-week layoff on Mar. 23, while FCA’s minivan plant in Windsor, Ont. was shut for 24 hours last week amid COVID-19 concerns.
Tier 1 suppliers are experiencing issues when it comes to securing parts Canada’s automotive supply chain—and Tier 2 suppliers may not be far behind, according to Mike Bilton, president of the Canadian Association of Mold Makers.
“A lot of parts or subcomponents that are needing to be put onto the larger assemblies are either not available or delayed,” said Bilton. “It’s forcing a lot of the tier ones to go out and take measures to find a different supplier, which is a cost in time and resources.”