Report: Autonomous Vehicles Will Reduce Collision Repair Revenue 48 Percent by 2030
As autonomous vehicles hit the roads, KPMG projects collision repair revenues will decrease.
Photo Courtesy: KPMG
According to a report by the KPMG U.S. Manufacturing Institute Automotive Center in Detroit, original equipment manufacturers (OEMs) will see a 48 percent decrease in collision repair revenue following the onset of autonomous vehicles. The report projects that the industry, which accounted for $5.6 billion in 2015, could drop to $2.7 billion in combined annual revenue by 2030, and $1.4 billion by 2040.
The report, entitled “Will Autonomous Vehicles Put The Brakes on the Collision Parts Business?” notes that despite accounting for less than 3 percent of OEM revenue, collision parts make up an average of 10-20 percent of operating profits. Based on the revenue impact, OEMs can expect a 4-9 percent reduction in operating benefits by 2030, and a 13 percent drop by 2040.
“OEMs have already begun to deal with the design and engineering challenges related to autonomous vehicles,” says Gary Silberg, KPMG's U.S. automotive leader. “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.”
OEMs expect to be selling fully self-driving vehicles as soon as 2020, if not sooner, and KPMG projects crash rates will continue to decline as advanced driver assistance systems become more prevalent.
The report also encourages OEMs to evaluate and begin preemptive measures to mitigate risk as the industry continues to emerge, including analyzing the declines in types of collisions (rear end, blind spot, etc.), developing a plan to right size their collision parts business and variable costs in response to a shrinking market, and quantify the risks to their own businesses.
A full version of the report can be found here.