The automotive collision repair market totals today a share of 23% of the UE´s automotive aftermarket, estimated in €45.000 millions
Few sectors as advanced and important for the global economy as the automotive industry are facing such an uncertain and challenging future. The changes experienced during the last decades seem so little in comparison with those yet to come.
This uncertainty has led many experts to try to anticipate which technology will equip cars in the mid-term, what is going to happen with internal combustion engines and how electrification and new mobility patterns will affect the entire sector.
That is the reason why many forums in the automotive field –also in the aftermarket segment- are nowadays devoted to the discussion, supported by more or less reliable data, on the future of our industry. In this sense, the IBIS Global Summit 2018, probably the world´s largest meeting on the bodyshop industry, held from June 11 to 13th in Munich (Germany), made no exception putting the focus on the collision repair market.
In this context, representatives of ICDP, the specialized automotive industry research firm, highlighted some of the conclusions of a recent study on the future of the bodyshop industry in four of the main UE markets (France, Germany, Italy and UK) by 2030. Its conclusions can be extrapolated to other markets in EMEA region.
Far beyond the figures offered, ICDP´s researchers identified some key trends with a clear impact on the future of bodyshop business. Among them, it´s worth highlighting the widespread of ADAS systems (Advanced driver-assistance systems aimed at helping during driving process), an increasing trend that is going to impact directly on the collision repair business, as some professionals have already noticed. Moreover, ICDP´s representatives reported that replacement and repair of vehicle glass will experience a remarkable evolution in the coming years.
Using a simulation model created to analyze the evolution of the mentioned markets, ICDP researchers predicted an average reduction of a 23% in body repairs in these countries by 2030. This drop in the amount of repair orders will be compensated by higher repair costs due to the increased presence of technology in the car park. Drivers can expect fewer accidents in the future, but should be prepared to pay more when it comes to fixing their technologically advanced vehicles.
Steve Young, Managing Director of ICDP, pointed out that the automotive collision repair market totals today a share of 23% of the UE´s automotive aftermarket, with an estimated value of €45bn of which parts represent almost half in a market characterized by “many complexities, some emerging threats and a lack of data”, he said.
Young analyzed the impact that the ADAS will have on the business. In this regard, he suggested that these systems should reduce the accident rate, but noted that this will depend on the penetration into the vehicle park as a whole.
ICDP´s representative also shared some of the opinions expressed by the participants in the research. One OEM representative interviewed stated: “We’ve not seen any change yet in accident & collision repair rates, though when we looked in detail we found that front end damage was being replaced by rear end”. Another respondant, on behalf of a bodyshop, suggested it would see a 50% reduction in structural repairs in the next five years.
As for the ADAS, one of the main challenges for bodyshops will be the recalibration of its sensors, whose number is to continue increasing. And a proper recallibration implies correct procedures, necessary space, time and the use of correct tooling, which will be key aspects for collision repair business in the future.
In addition to the ADAS, ICDP identifies other challenges such as vehicle construction, embedded technology, telematics and insurers strategies as being major influences on the market in the coming years.
Taking into account aspects such as kilometres driven, vehicle park growth, ADAS adoption, among many others, by 2030 ICDP predicts a decrease of 30% in incidence rate, an average increase of 39% in total losses, a decrease in 22% of heavy collision repair, and an increase of 8% in the number of incidents managed by insurers across the countries mentioned. “The general trend will be fewer collisions but the cost of repair will be greater” stated Young.
Overall, ICDP predicts an average across those EU4 markets of a 15% reduction in collisions; a 23% reduction in repairs; a reduction of 19% in parts value; and a 17% reduction in total market value.