Where have all old cars gone?: Roles of the informal sector in treating the end-of-life vehicles in Thailand

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Abstract:

Despite Thailand is the largest automobile production base in Southeast Asia and now at the crossroad to promote electric vehicle, there is no clear policy towards end-of-life vehicles. This research tries to examine how the end-of-life vehicles were treated and how many economic entities involved in the last stage of vehicles. This research started with tracing the data of registered cars in Thailand from 2007 from Department of Land and Transport (DLT). The scope of this research is on passenger cars and one-ton pickup trucks. The stock of cars older than 10 years in Thailand keeps growing from 0.7 to 2.98 million units in the past decade. In addition, it is surprising to the researcher that data on the number of old cars registered have been disappeared from the system. DLT does not require all registered cars to de-register if the owner no longer use their vehicles. After three years of no renewal of the road tax, DLT will automatically delete that particular car from the registration system. Thus, where have all old cars gone is an easy question to ask yet hard to answer.
This researcher then conducted field survey to several players in the supply chain to identify their roles in collecting, dismantling, and recycling stages. Then, the next step was to conduct questionnaire survey on the perception of consumers in Thailand. Based on field and questionnaire survey, this research found that informal sector has played important roles in reuse, recover and recycle old cars. Improper management, lack of technology and equipment, treatments of end-of- life vehicles endangers environment and social costs in Thailand. However, almost all players in this supply chain ignore these costs. Our field survey can illustrate the supply chain of ELV in Thailand and point out the activities imposing social costs.

From the consumer’s point of view, Thai customers tend to use their cars more than ten years because cost of ownership of old cars is not progressive and players in the ELV supply chain can recover and supply old car parts to the repair shop, extending the life of old cars in Thailand. Respondents consider that their cars have market value, so they might turn their broken cars to some buyers and get money. This is because price mechanism and market-driven entrepreneurs in the ELV supply chain can make profit. However, consumers are aware of the pollutions from old cars and will follow if there is a clear legislation on ELV in Thailand.

Recently, increasing number of ELVs and negative impacts of old cars have led to an initiative to develop a framework for establishing end-of-life vehicle management system in Thailand. Pollution Control Department (PCD), under Ministry of Natural Resources and Environment, has forming up a steering committee to tackle the ELV issue in Thailand. This committee consists of private sector, public sector and university to promote the best practice ELV processor in Thailand, suggest some policy recommendation to the Thai government to promote licensing system for dismantling company, deregistration system, and technology transfer to local firms in the ELV supply chain. This research will report the ongoing process of this initiative and the status of the EVL management in Thailand. Lessons from Thailand may benefit other developing countries in managing the waste and to mitigating social problem from old vehicles.