The whole collision repair sector faces a range of challenges in the years ahead, but one unifying factor in this will be the influence of technology. One thing is certain, technology will affect body shops on all fronts, in terms of how they interact with customers of all types, the parts they buy, and from whom, the repair content itself, and the people needed to handle all of this within the business. There will be both winners and losers, and it is up to the individual repairers to decide into which group they fall.
Market size will decrease
The normal trends that drive crash repair volumes have been trending downwards. This includes traffic volumes, road infrastructure, driver behaviour and the role of insurers. However, we anticipate that the annual kilometres driven will increase in the next decade, and so will the total number of cars that are on the road (parc).
Usually this would increase the number of accidents, we estimate by 8% in 2030 compared to 2016. However, we are already seeing growing adoption of Advanced Driver Assistance Systems (ADAS) in new cars, and in particular Autonomous Emergency Braking (AEB).
But as AEB penetration increases, becoming mandatory on all new cars sold in the EU by 2022, the effect becomes more widespread and all cars in the parc, will be less likely to be involved in an accident by 2030 – we’re assuming a 30% reduction is attainable. Given the effect of other ADAS systems, the reduction may be significantly more. The combined result of the natural trend upwards with the reduction in accidents due to ADAS and generally lower damage is that we see the total value of the repair market going down by 18% by 2030, with similar drops in other European markets.
Product and repair complexity
That news would be bad enough for repairers, but it is not the only technology impact facing the sector. Cars themselves are becoming more complex in many different ways. We have seen for some years now the greater variety of materials and jointing methods used in car bodies.
Originally restricted to top-end premium cars, this has worked its way down to mainstream products, driven by the need to meet NCAP type tests with reduced weight to also meet emissions requirements. High strength steels, aluminium, and other light alloys and composite materials of various types are all now common on volume cars, and they are assembled together using a variety of welding, riveting and bonding techniques.
If these materials are not repaired in the right way, the car structure will not perform as it should do in any future accident. The shell will deform at a different rate, potentially with more intrusion into the passenger area, and airbags may not deploy as they should. There is, therefore, real risk of additional fatalities and injuries through the use of the wrong repair methods.
The ADAS systems themselves depend on a wide range of different types of sensors, typically positioned around the periphery of the car where they are most prone to damage, or behind the windscreen where they must be disturbed in the relatively common event of any glass being replaced. The safe operation of ADAS requires that the sensors are correctly fitted and calibrated, both presenting new challenges for the repairer. Radar and optical sensors depend on the qualities of the material behind which they are mounted, a painted bumper skin or windscreen, being to a defined standard in order to properly detect obstacles, road markings and signs.
Manufacturers claim that incorrect repairs to these parts of the use of non-OEM parts may cause the sensors to malfunction, with the risk this would lead to more collisions and personal injuries. While this is certainly potentially true, it would not apply if, for example, glass from the same OE supplier was used, even if purchased through a different channel to the OEM one.
They also need to ensure that the systems are recalibrated correctly following repair. As volumes grow, more independent repairers are choosing to do their own calibration rather than contract it out, but you must have confidence in your contractor or own staff either way, as the only way to check that a calibration is correct is by rechecking it.
In addition, some individual parts such as headlamps are becoming more sophisticated, in some cases incorporating additional sensors, and requiring more specialist skills to fit and set up. Repair rather than replacement is less likely to be an option than it would be for lower technology parts, increasing the repair bill and shifting the mix from labour to parts. They are also almost always going to be available only from OEMs.
Consequences for repairers
So, what does all of this mean for repairers, and how can they ensure that they are on the winning side?
Existing skills shortages will become more acute as more of the “old hands” leave the business because they can’t or won’t adapt to the new methods and complexities of calibration. This will put more emphasis on investing in hiring and training. Younger people to replace them, but some repairers will try to shortcut the training by poaching qualified staff from elsewhere.
Together this will increase labour costs which ultimately have to be recovered from insurers. This reduction in capacity will push the pendulum back in the repairers’ favour, away from the insurers. Insurers will become more sensitive to the potential risks and liabilities that they would face from using less capable repairers. So, they will be trying to lock in capacity in the repairers who have the skills in the brands that match their insured parc.
We believe that these pressures will force repairers to become more specialised in certain brands where they can get an adequate return on the human and physical investment and reduce the risk of errors arising from less common methods. They will be able to offer meaningful capacity and assured quality standards to the insurers. It will be easier to do this for the larger repair groups, or those repairers who have virtual scale as part of a franchise network.
Some of the repairers will choose to remain small, focused on cosmetic, mainly customer paid work, dodging much of the complexity that is described. Those independents in the middle will face the greatest challenges, not being big enough to support the required investments, but too big to be viable for a share of the remaining work.
Bodyshop Magazine UK