Remanufacturing boosts the aftermarket in the US

The United States is the world's leading manufacturer, consumer, and exporter of remanufactured goods. At least 180,000 employments are supported by the significant and expanding industry of remanufacturing in the United States. Remanufacturing is an industrial process that returns outdated products to usable condition.

Remanufacturing boosts the aftermarket in the US 
Remanufacturing, often known as the industrial process of returning obsolete goods to usable condition, is a significant and expanding part of the American manufacturing industry. Remanufactured items not only work "like new," but also enable businesses to significantly reduce capital production costs while providing consumers with like-new products at cheaper costs than new products. Remanufacturing also has less of an impact on the environment than manufacturing new products because it uses less resources and energy. Remanufacturing happens in a variety of US industries and business types, including big original equipment manufacturers (OEMs), independent suppliers, and small and medium-sized businesses (SMEs). 

With an estimated two-thirds of all remanufacturing activities performed globally, the motor vehicle components remanufacturing industry is said to be the largest remanufacturing sector in the world. In the motor vehicle industry, engines and transmissions, starting motors and alternators, steering racks, and clutches are the main remanufactured items. Remanufactured auto parts typically cost 20 to 50 percent less than most brand-new parts.

Many of the world's top remanufacturers of auto components have their headquarters in the United States, along with numerous other smaller remanufacturers. The extent of the remanufacturing activities included in the estimation is one factor that greatly affects industry size estimates. There are reportedly thousands of smaller companies (with fewer than 20 employees per firm) that carry out some steps of the remanufacturing process on a variety of motor vehicle parts. However, only about 300 US remanufacturers of motor vehicle parts employ more than 20 workers each.

While the Automotive Components Remanufacturers Association (APRA) lists more than 15,000 US companies as remanufacturers of motor vehicle parts, the Rochester Institute of Technology (RIT) estimates that 3,800 US companies make motor vehicle parts. Original equipment manufacturers (OEMs, or in this example, the vehicle manufacturers) and independent remanufacturing companies are both remanufacturers of motor vehicle parts.

OEMs create brand-new auto parts in addition to contracting out the remanufacturing of their goods for resale. Remanufactured goods are often sold by OEMs via dealer networks. Independent remanufacturers create a design and set internal standards for their products that may or may not be identical to those of the original equipment components but nevertheless adhere to the requirements for form, fit, and function. Foreign automakers' rising market share in the United States has also attracted investment from their network of component producers, who make both new and remanufactured products. For instance, sales of front-wheel drive axles remanufactured in the United States have reportedly decreased as a result of imports of new axles from China, Korea, and Vietnam.

US 2009 – 2011 market 
Remanufactured goods manufacturing in the United States increased by 15% from 2009 to 2011 to at least $43 billion, sustaining 180,000 full-time jobs. In several remanufacturing industries, American production, employment, and exports are rising, although they are still insignificant when compared to overall US manufacturing operations. Remanufactured goods exports from the United States reached $11.7 billion in 2011, an increase of 50% from 2009. Important markets for American exports of remanufactured goods are Canada, the EU, and Mexico. US exports of remanufactured products to free trade partners accounted for around 40% of total exports.

The availability and relative cost of cores (the used goods to be remanufactured), transportation and labour costs, the cost of new versus remanufactured goods, the availability of new alternatives at lower prices, and customer perceptions of price and quality are important factors affecting the competitiveness of US remanufacturers in all sectors and markets. There is little remanufacturing and trading in remanufactured goods and associated supplies in international markets. Trade in remanufactured items in the United States and around the world is significantly hampered by foreign regulatory restrictions.

US 2020 – 2027 market 
The global market for automotive parts remanufacturing, estimated at US$53.8 billion in 2020 but anticipated to reach US$96.4 billion by 2027, is expected to rise at a CAGR of 8.7% from 2020 to 2027. By the end of 2027, the market for engines and related parts is expected to grow at a 9.3% CAGR and reach US$28.6 billion. After an early study of the pandemic's commercial repercussions and the economic crisis it caused, the Transmission segment's growth is readjusted to a revised 8.2% CAGR over the following seven years. While China is anticipated to grow at a CAGR of 12.5%, the US market is estimated to be worth $14.7 billion.

Rematec webinar | 21 February 2023 | 17:00 - 18:00 CET
Eyes on the US | The evolving landscape of remanufacturing in the US
Over the last couple of years, the remanufacturing industry in the US has changed and developed fast. As we learned, the key trends are in marketing, workforce development, technology, and sustainability. With this webinar, we are here to get you ready for Rematec 2023 and talk to you about all the latest trends and developments in the US remanufacturing industry. Register your free attendance here: www.rematec.com/webinar/#nextwebinar