Autonomous Vehicles Will Shrink Auto OEM Collision Repair Revenue By Nearly 50 Percent By 2030: KPMG Projects
Tags
self driving vehicles self driving cars road safety for children road safety rear view safety rear view camera oem car safety tips car safety backup camera systems backup camera system for cars backup camera system backup camera back up camera system back up camera autonomous driving

According to the recent report "Will autonomous vehicles put the brakes on the collision parts business?," from from the KPMG U.S Manufacturing Institute Automotive Center, self-driving vehicles will greatly reduce OEM collision repair in the not so distant furniture. The report claims that OEM collision repair revenue, which was 5.6 billion in 2015, could drop to 2.7 billion by 2030 and go as low as 1.4 billion by 2040.

"OEMs have already begun to deal with the design and engineering challenges related to autonomous vehicles," said Gary Silberg KPMG's U.S. Automotive leader in a press release.

"And while their focus may be on bringing the first self-driving cars to market, OEMs need to contend with the decline in demand for collision parts that these safer, autonomous vehicles are expected to bring by reducing driver error and lowering accident rates."

At the latest most OEMs expect to be selling fully self-driving vehicles between 2020 and 2025. The report suggests crash rates may decline by more than 60 percent by 2030 and 80 percent by 2040 as safety technology including ADAS systems are included in more vehicles.  This in turn could result in a 50 percent decline in the overall collision repair market within the next 15 years.

"OEMs need to implement aggressive plans to right-size collision parts cost structures and identify new revenue streams," said Tom Mayor, head of Strategy for KPMG's Industrial Manufacturing practice in a press release. "This will keep their shareholders and dealer partners whole, while maximizing showroom floor support for ADAS and autonomy."

Call to Action

The report suggests OEMs need to start preparing for autonomous vehicles. Here are some ways to prepare:

  • Understand/quantify risk to their own business and identify suppliers, dealers and regions that may also be subject to substantial risk.
  • Analyze/anticipate the declines in the types of collisions (rear end, blind spot, etc.) and their impact on the business as autonomous vehicle technologies are introduced.
  • Create a plan to right size their business and adjust costs efficiently in response to a shrinking market.

Of course, this is all somewhat speculation. Not everyone will have an autonomous vehicle as soon as they are available, and the public is generally still on the fence about the technology as a whole.