Automatic braking systems. Lane keep assist. Cross-traffic warnings. Automakers are outfitting cars and trucks with these advanced safety features to create vehicles that are better able to avoid crashes—and when accidents do occur, making them less severe.
In short: fewer crashes, fewer repairs, fewer injuries, fewer fatalities.
But while advanced driver-assistance systems (ADAS) have made cars smarter, enabling them to help avoid collisions, technology has been no match for human error. There simply have not been enough ADAS-equipped vehicles on the road to make up for a rising number of accidents caused by distracted driving and other dangerous driving behaviors.
In our 2017 paper, "Will autonomous vehicles put the brakes on the collision parts business?,"1 we predicted that as ADAS became more prevalent in vehicles, crashes would decline, cutting into the highly profitable replacement-part business of automotive original equipment manufacturers (OEMs), as well as the rest of the collision-repair market—body shops, auto repair shops, and insurance companies.
In this updated research, we find that the trend toward rising collision rates began in around 2011 and continued through 2016. These rising accident rates—after years of decline—were the result of an overall increase in dangerous driving behaviors, particularly distracted driving, which has led to an uptick in car crashes over the past few years.
Studies show that too many drivers continue to be guilty of unsafe behaviors. Despite laws and widespread public-information campaigns, people still text or email while behind the wheel. Additionally—and ironically—ADAS themselves may have contributed to the problem by fostering a false sense of security among drivers of cars with sophisticated safety features.
We can't predict when human behavior will improve. We can, however, reiterate our conviction that as vehicles with semiautonomous driving features account for more miles traveled on the country's roads and highways, the recent trend will likely inevitably reverse, leading to lower collision rates. Indeed, the drop in collision rates in 2017 may turn out to be a tipping point, where the effects of safety technology start to overpower dangerous driving behaviors. Therefore, we remain confident that the collision-repair market will shrink by nearly a quarter by 2030.
Preliminary data indicates that the cost of repairs will decrease as ADAS become more common in vehicles. Even now, we see that ADAS are demonstrably lowering the severity of crashes (for ADAS-equipped vehicles). It had been assumed that the high cost of replacing ADAS components after crashes would actually drive up repair bills, but that does not seem to be happening.
This all points to a steady and steep decline in the collision- parts business, which makes up a significant percentage of OEM revenue and profits. Indeed, we project that the collision-repair market will start to contract in the mid-2020s and could be 26 percent smaller by 2030. Now is the time to develop strategies to replace this reliable source of profit.
For more information, download the full report below.
1 "Will autonomous vehicles put the brakes on the collision parts business?" KPMG, 2017
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.