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Frost Perspectives

Autonomous Vehicle Penetration to Conversely Impact Collision Repair Aftermarket Revenues


Feb 26, 2018

By 2030, Collision Repair Revenue Could Potentially Decline by 32%

Advanced driver assistance systems (ADAS) and autonomous vehicles are likely to create a ripple effect in the automotive industry. The total number of vehicles operating on intelligent mobility is expected to increase from 9% of the total vehicles in operation (VIO) in 2017 to 82% in 2030. Increased adoption of ADAS and autonomous vehicles will be due to the higher emphasis on safety and green technology. Adoption of intelligent mobility will happen in stages. Currently, L1 and L2 vehicles make up the intelligent mobility footprint. By 2025, L3 and L4 vehicles will have had achieved a sizeable adoption. A vehicle parc of ADAS and autonomous capabilities (L1 to L4) will change the automotive landscape

There are already macro trends developing as a result of the positive future outlook on technologies such as shared mobility, collision avoidance, connected vehicles, and prognostics maintenance. Furthermore, private ownership is likely to reduce – a major trend that is likely to disrupt multiple connected stakeholders in the automotive ecosystem.

One of the industries likely to face a major reality check is the aftermarket parts and services industry. With a lot of emphasis being shed upon mitigating crashes, eco-driving, and streamlined performance—aftermarket garages, suppliers, and repair facilities stand to lose a sizeable chunk of their revenue. The growing adoption of ADAS-enabled and autonomous cars may lead to:

  • More stable driving – resulting in lesser part wear and tear
  • Insurance incentives to drive these advanced vehicles, thereby boosting uptake
  • Shared mobility, leading to slow growth or even a drop in sales

The automotive world is in a flux as to what to expect from the evolving dynamics of the industry. Imminent growth of the intelligent mobility spectrum will ensure the value chain will experience a shock if unbraced for the future.

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By 2025, Frost & Sullivan expects all the passenger vehicles sold in North America to be equipped with some form of ADAS or autonomous technology. Currently, the (L1 and L2) or semi-autonomous vehicles make up a small percentage of the vehicle parc. By 2025, even a conservative estimation puts the adoption of L3 to L5 vehicles at 23% while the optimistic adoption estimates 30% for the same sub-group.

The total number of non-ADAS vehicles will significantly fall by 2030. At less than 20% of the total car parc in 2030, the vehicle sub-segment will contribute little to the repair industry.

As mentioned earlier, although the impact of adoption of intelligent mobility will benefit and give rise to multiple industries and contemporary business models, one of the oldest offshoots of the automotive industry—the repair and service industry is likely to be caught facing a significant reduction in footfall at their garages and service centers.

Collision occurrence will reduce as ADAS components and anonymity in vehicles increases. Frost & Sullivan research on the impact of autonomous cars on the collision industry estimates the collision rates to decrease by 14% by 2030 in North America.

Currently, 85% of all collision-related repair and service work is serviced through the Independent Aftermarket (IAM) channel while the remaining goes through the OES channel. This translates to a multibillion dollar revenue stream for the aftermarket, and is expected to change.

Frost & Sullivan has recently published an in-depth research study on this subject, applying multiple adoption rates with respect to the autonomous vehicles sold annually from 2018 to 2030. The study also features collision and repair-addressing scenarios to chalk out 2 detailed forecast streams for the collision repair aftermarket. Research on per-vehicle-expenses-per-collision and related factors estimate the industry will lose close to 32% of its revenue by 2030. Intelligent mobility is likely to impact regular wear parts, such as tires and brake pads, and is likely to record declining replacement rates due to efficient vehicle usage, thereby affecting replacement cycles. Parts that are usually associated with collision replacements, such as headlamps, mirrors, windshields, body panels, and bumpers, are likely to witness decreased demand once intelligent mobility becomes mainstream. Maintenance trends are anticipated to evolve as well, as these vehicles will require less but more advanced maintenance, such as over-the-air (OTA) updates.

For in-depth analysis on these segments or scenario analyses refer to the “Impact of Autonomous Mobility on the North American Automotive Aftermarket, Forecast to 2023” on the Frost & Sullivan Web site or look up study code – (9AB2-00-AB) on the Frost & Sullivan Web site. In addition to the above mentioned segments, the report also focuses on the market trends, impact on OEMs, aftermarket suppliers, key startups, and companies in the field of ADAS and autonomous vehicle technology.



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