Strategic framework to improve the value chain of end-of-life vehicles in Malaysia

Abstract

End-of-life vehicles (ELV) management is crucial for sustainable development in a circular economy and waste minimization for the conservation of natural resources. However, there is still improper connection between the National Automotive Policy (NAP) 2020 implementation and the ELV strategies development in the supply chain of the Malaysian automotive industry. ELV recycling and remanufacturing companies face difficulties adopting appropriate ELV implementation strategies for used parts recovery in ELV. Therefore, this study aims to develop a strategic framework to improve the value chain of ELV in Malaysia. The study adopted qualitative interview approach with a total of nine respondents from six ELV recycling companies as multiple case studies. The three directions identified are optimization of ELV used parts/cores supply and demand, recovery of ELV used parts/cores, and improvement of ELV used parts/cores quality. Nine sub-strategies were proposed to address the corresponding critical enablers (strengths and opportunities) and inhibitors (weaknesses and threats) to improve the ELV value chain. Based on their contextual relevance, these sub-strategies were categorized into two main strategies: 1) value chain development, and 2) human capital and technological development. Lastly, a strategic framework which consists of three key focus directions and two main strategies was developed. The proposed strategic framework serves as a pathway for implementing future ELV policy in Malaysia, in line with NAP 2020. The ELV-related companies, government agencies and industry stakeholders especially in developing countries can adopt this strategic framework to formulate appropriate directions and strategies to optimize their ELV value chain for sustainable development.