Automotive > Infotainment & Telematics Blog

AAIA: Less Driving, Fewer Collisions, More Business for Repair Shops

by Roger Lanctot | 8月 29, 2012

The automotive collision repair business in the U.S. grew 3.3% in 2011 to $38.7B, in spite of a decline in miles driven and the number of collisions, according to the latest report from the Automotive Aftermarket Industry Association. Cars are lasting longer, being driven less and getting in fewer accidents, the report notes, citing multiple insurance and automotive industry sources.

The 2012 edition of the AAIA’s Digital Collision Repair Trends: Industry Statistics & Analysis arrives just a week before Telematics Update’s Insurance Telematics event in Chicago. Insurance and automotive industry executives will convene next week to discuss usage-based insurance and the insurance implications of car sharing and EVs, among other topics.

The AAIA is most focused on the concerns of the independent car repair shop industry, of which there were 40,279 as of 2011, down from 46,700 in 2001, according to the report. Insurers and independent car repair shops generally share the same objectives.

Not all car dealers embrace the collision repair business, but for most it is an essential element in their revenue portfolio. Every OEM wants to see its cars repaired with genuine OEM parts. The accident aftercare business is a strategic one for both new car dealers and OEMs and telematics – a topic not covered in the AAIA report – can serve as a lead generating device for the dealer channel.

The study reports that the average number of vehicle miles driven declined in 2008 for the first time in two decades. The total was 2.96 trillion miles in 2011, down 1.2% from 2010. Roadway congestion has also leveled off, according to the report.

The declining rate of vehicle usage has likely contributed to declining collision rates and declining insurance claims, both of which are cause for concern to both insurers and repair shops. Most of this decline is coming in the developed world where more well-equipped cars are available with better educated drivers. In developing markets around the world rising levels of vehicle ownership have brought to the fore issues of security, theft and rising accident rates setting the stage for very different insurance priorities. (Preventing fraud has also emerged as a core issue throughout Europe.)

The proliferation of collision avoidance technologies including adaptive cruise control, blindspot detection, back-up cameras and lane departure warning have certainly contributed to the decline in collisions in the developed world. But the U.S. saw a slight uptick in vehicle ownership last year after a leveling off between 2008 and 2010 – rising slightly to 240.5M vehicles in 2011, according to data from Polk, which was a contributor to the report. More cars usually translates to more miles driven and more accidents.

Polk also contributed average vehicle age data to the study. Polk reports that the average car on the road in the U.S. is 11.1 years old, continuing a steady unbroken yearly rise from 8.4 years in 1995. Polk analysts say that the U.S. can expect to see the overall rate of vehicle ownership to resume its climb as the economy recovers and that the average age of a car will peak.

Vehicle age is a critical factor in determining the repair destination. AAIA says that slightly more than one in three (36.9%) of vehicles in the one year-old category have its collision repair work performed at new car dealerships. The percentage drops substantially after the first year as consumers seek independent repair channels to fulfill their collision repair needs.

So the megatrends represent a mixed bag of good news and bad news for independent repair shops. Cars that last longer are more likely to be brought to an independent repair shop for repairs, but not if there are fewer accidents.

AAIA says that in 2010, independent repair shops contributed 86.3 percent of total sales in the collision repair industry, with dealership body shops making up only 13.7% of total sales. “Previous experience” and “convenience” were the most important factors in selecting an outlet for collision repair work, the study states.

Insurers and independent repair shops have a common cause in capturing a larger chunk of the collision aftercare market. For new car dealers, the best opportunity lies in leveraging vehicle connectivity technology to better identify, respond to and capture post-collision opportunities.

Telematics has a role to play in this scenario, but no car maker has found the solution to this challenge yet. Until OEMs can solve this problem their aftersales divisions will continue to miss out on billions of dollars in revenue while dealers battle insurers and independent shops for profitable collision repair opportunities.

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