PROJECT DESCRIPTION
BACKGROUND
Achmea succeeded in realising the large-scale re-use of second hand car components. This led to a win-win situation, with significant environmental and economic benefits. Damaged cars and end-of-life cars result in a build-up of enormous amounts of used materials, like Ferro- en non-Ferro metals, plastics, rubber and glass. Approximately 25% of this waste (the so-called shredder residue) is hazardous waste and is currently stored in large landfills. Before the start of the project there was no organisation in the Netherlands that professionally repaired substantial parts of damaged cars with the use of used parts. All vehicles of insurance and car lease companies were repaired with new parts. There was no structure or system available for the management of the flow of used parts. Achmea was the first organisation to introduce the concept of repairs using used parts and faced an enormous challenge in doing so.
OBJECTIVES
The main goal of the RESPECT project was to demonstrate the large scale re-use of used car parts, by means of a coherent partnership between Achmea Parts Service and key parts of the automotive chain (car dismantlers, body shops, owners of car fleets and insurance companies). The specific goals of the RESPECT project were and still are: - To demonstrate that the re-use of used car parts on a large scale is economically, ecologically and technically feasible and viable for all those involved; - To demonstrate that 80% of all car damage (of cars older than 2 years) can be repaired with used car parts without compromising quality standards; - To demonstrate an intelligent logistics system (co-ordinated by Achmea Parts Service), that takes care of all the handling and availability of used car parts and quality assurance systems, and establishes clear communication lines between all involved parties.
RESULTS
The projects has produced some excellent results. Green policies have become a success for all parties involved, including the end users. In early 2002 some 75 000 green policies were sold and 6 000 repairs were done with used parts. The beneficiary and the other parties involved in the project put a major effort into the project’s implementation. They demonstrated the viability of the concept of green repairing, created the required procedures and quality assurances, and worked hard at improving the professionalism of the dismantling industry. They also undertook massive dissemination activities. The green car insurance policy is basically a very simple concept: clients with a green policy have their car repaired with used parts. Implementation of this concept is not as simple as it may seem at first glance however. The insurance company must be able to guarantee the overall result. This requires: - the installation of a system for matching the supply and demand of used parts; - the selection, certification and education of car dismantlers; - the organisation of efficient logistics; - guaranteeing the quality of the used parts; - guaranteeing the quality of the repair job; - developing a revised business model for body shops (as the profit margin on new parts is larger; consequently the insurance company must raise the labour rate in order to compensate for the loss of margin on parts). In the 2-year project Achmea has proven that the large-scale re-use of used car parts is possible. The IT-system developed for the project made effective and efficient communication possible between all the parties in the chain, sector organisations (Focwa, RAI, Stiba, Bovag), body repair shops, certification institute KEMA and car dismantling companies. While cost savings are not yet completely in line with expectations, they are sufficient to make the profits and returns on green policies very acceptable and within insurance standards. The re-use of used car parts has also lead to significant environmental savings, including: - A reduction of emissions from painting: reduction of paint usage and thus of the related emissions is estimated at 50%. Used parts mostly require less paint layers and sometimes even no layers when they are directly available in the right colour; - Material savings: in 2001 1,642 cars were repaired with used parts, containing generally 60% Ferro- and non-Ferro materials, 25% plastics and 15% other components. As the average weight per repair is 30 kg, 60 tonnes of material was saved in 2001. Experience shows that for newer vehicles, particularly vehicles that are less than 2 years old, very few used parts are available. This is mainly due to the fact that such vehicles are rarely completely decommissioned, and when they are, very few parts are re-usable. On the other hand, there are more than enough parts for cars older than 3 years. This has led to the fact that the insurance companies mainly offer the green policy to customers with cars older than 3 years. It also means that hardly any fleet owner or leasing company is being serviced with green parts, since they mainly use newer cars. Achmea acknowledges that there is still a lot of work to do, especially as regards the availability of used parts. The lack of parts is becoming even more problematic as the number of green repairs is increasing significantly. However, Achmea is putting a major effort in getting the supply of parts organised in such a way that it can cope with demand. . In a follow-up questionnaire completed by the beneficiary in March 2005, Achmea / Centraal Beheer reported it is still selling the green car insurance polices and still has the system for repair with used parts in place. As far as it is aware, the system remains unique world-wide. Recent activities have been mainly focused on intensifying the commercial activities for the sale of the green policies. The system, called ‘Groene service’, is open for cars older than 4 years. Achmea has managed to maintain a portfolio of 75,000 policies (and has thus been able to attract new users for those who bought new cars or cars younger than 4 years and so had to leave the system). Whereas at project closure (early 2002), it had carried out some 6,000 repairs with used parts in the project period, this figure has now jumped to 7,000 repairs in 2003 and a further 6,200 in 2004. Finally, the revenue/cost ratio at the end of 2004 showed the lower price of a green policy, compared with a traditional policy was justified.For more information, see: www.centraalbeheer.nl (under ‘groene service’).
