An overview on Dismantling in New Zealand

A recent trip to the North Island of New Zealand gave me the opportunity to have a quick look at how things are done there and to see the ways in which conditions are different for dismantlers in NZ.

New Zealand is a great place to be a dismantler: tough climate (particularly in the South), challenging roads, and keen drivers (New Zealanders have a long history in motorsport that began long before Bruce McLaren and continues today with Hayden Paddon contesting the World Rally Championship). This along with the diverse vehicle fleet presents many opportunities and challenges for New Zealand’s dismantlers.

I was visiting two PartsWorld sites – Henderson PartsWorld in Auckland and Maztech PartsWorld in Rotorua. PartsWorld is New Zealand’s largest chain of dismantlers, with 35 outlets covering both the North and South Islands. You can visit their website here.

Like many dismantlers in NZ these two businesses are also importers of used parts and complete cars from Japan. This is in response to the New Zealand vehicle fleet, which is made up of a large number of used cars imported from Japan along with a smaller number of new vehicles sold by manufacturers. These cars from Japan are referred to as JDM models: JDM standing for Japanese Domestic Market.
As you can imagine, this mix of vehicles presents quite a few challenges in itself just to get the make and model information correct for every enquiry!

One thing I did see whilst I was there that was not necessarily a plus for the dismantlers is the use by car insurers of a website called PartsTrader to access parts for repairs.

PartsTrader is an online tendering system that has been adopted by all the major insurers in NZ. Suppliers of new, aftermarket and used parts all participate in what PartsTrader calls an online marketplace. The result though is mixed for the dismantler. It does give him visibility of all the parts required for repairs and the chance to offer the parts he has available to be used in those repairs. But it is labour intensive for staff who complete quotes online without direct contact with the customer. And the close rate on these quotes is low.

And although there are considerations other than the part price when a repairer is choosing which parts to use (there are star ratings for both repairers and suppliers for example), the main outcome appears to be to create downward pressure on part prices.

So PartsTrader does give dismantlers access to a bigger market and repairers potential to access more available parts, but I am not sure it promotes more parts availability! By that I mean any business will focus its resources on the activities that bring the best return. Car Insurers whose repairers use PartsTrader may have visibility of more used parts, but dismantlers have no incentive to find ways to make even more parts available whilst ever a low price is an important determiner. Interestingly PartsTrader is also used in the US but not in Australia. You can visit PartsTrader website here. information about PartsTrader.

As I hope to have more visits to New Zealand I will be able to share with you more insights in the future on the way things are done there.