In this work, fabrication of aluminium metal matrix composites reinforced with electroless coated SiC particles is carried out through stir-squeeze casting process. Composite is developed using scrap aluminium alloy wheel as matrix material and SiC as reinforcement. The SiC particles are coated with Ni-P using electroless coating process to improve the wetting and to promote the interfacial bonding strength between the matrix and reinforcement. For the purpose of testing and analysis of the results, composite specimens are prepared in four ways, i.e., scrap Al alloy, scrap Al alloy with uncoated SiC (5 wt%), scrap Al alloy with coated SiC (5 wt%) and scrap Al alloy with coated SiC (2.5 wt%) & coated Al2O3 (2.5 wt%). Using scanning electron microscope, energy dispersive X-ray analysis, optical microscope and X-Ray diffraction, metallurgical properties are studied. Further, mechanical properties such as porosity, hardness, tensile strength, and compressive strength are analysed. Results revealed that porosity is very less in the substrate produced with coated reinforcement compared to uncoated reinforcement. Also, hardness, tensile strength, compressive strength and bonding strength of the composite are increased significantly. © 2021, Springer Nature B.V.