Global Automotive Collision Repair Market Size, Share & Trends Analysis Report By Vehicle Type ( Light-Duty Vehicle, Heavy-Duty Vehicle), By Product ( Paint and Coatings,Consumable, Spare Parts), By Service Channels ( Do-It-Yourself (DIY), Do-It-For-Me (DIFM), Handling to OEMs (OE) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global automotive collision repair market revenue was valued at USD 232.90 billion in 2023. It is estimated to reach USD 275.89 billion by 2032, growing at a CAGR of 1.9% during the forecast period (2024–2032). The automotive collision repair industry is primarily driven by the surging production and sales of automobiles worldwide owing to a surge in population and disposable incomes of people worldwide. Moreover, the integration of digitization with collision repair services is estimated to present lucrative opportunities for the global market.

Automotive collision repair refers to the restoration and replacement procedures carried out on accident-damaged vehicles. It is a complicated procedure because the repaired vehicle must adhere to the manufacturer's stringent safety specifications and tolerances. The damaged sections are either replaced or, if the damage is minimal, eliminated using a variety of instruments. It entails denting, painting, repairing, restoring, replacing, and refinishing structural or cosmetic automobile components such as fenders, glass windows, and car doors.

Paints, scratch-resistant coatings, spare parts, and other refinishing materials for repairing dents and blemishes are typically used in auto collision repair. It also includes a variety of consumables, such as motor oil and resin material. The repair components include repair materials, crash parts, mechanical components, and instruments. Passenger, light-duty, and heavy-duty commercial vehicles are typically repaired in authorized and independent garages.

Top 4 Key Highlights

• Light-duty vehicles dominate the vehicle type segment
• Spare parts dominate the product segment
• OE dominates the service channel segment
• Europe is the highest shareholder in the global market

Market Dynamics

Market Drivers

Surge in Consumer and Passenger Automobile Production

The growth in the global automotive collision repair market is directly related to the development of the global automobile market. The demand for automotive collision repair is anticipated to rise along with the global increase in automobile sales. Over the coming ten years, a boom in the use of passenger automobiles is projected in growing countries, including Asia-Pacific, South America, and the Middle East, supporting the expansion of the automotive collision repair industry.

According to the Organisation Internationale des Constructeurs d'Automobiles (OICA), the international organization of motor vehicle manufacturers, over 74 million new vehicles were produced in 2020. In May 2021, European commercial vehicle registration increased by 51.3% to 165,363 units. Surging disposable incomes across various sections of society have resulted in the growth of the automotive industry in developed economies, thereby driving market growth.

Market Restraint

Environmental Concerns

Certain environmental factors challenge the market. Paints and coatings containing high amounts of hazardous Volatile Organic Compounds (VOCs) that cause air pollution are not allowed to be used at auto body paint shops. Regulations in developed markets of North America and Europe have banned using potentially hazardous paints and coatings. For instance, the new National Emission Standards for Hazardous Air Pollutants (NESHAP) 6H rule by the U.S.

Environmental Protection Agency's (EPA) regulation, also known as the 'Paint Rule,' is expected to impact auto body shops using the paint containing Hazardous Air Pollutants (HAPs) found in most automotive paints, clear coats, and primers. The objective of the rule is to cut down on the emissions of potentially hazardous contents in paints, such as chromium, lead, nickel, cadmium, and manganese. The 6H is specific to metal and plastic surface coating operations at area sources, including manufacturing and auto bodies. Such factors restrict market growth.

Market Opportunities

Digitalization of Automotive Repair and Maintenance Services

The market is witnessing a dynamic phase change in customary repair service delivery paradigms with the convergence of digitization and auto repair and maintenance service delivery techniques. With the unique maintenance requirements of the new generation of vehicles, OEMs and dealerships need to focus on software, sensors, and high-voltage components rather than mechanical fixes. Several start-ups have surfaced in the industry, delivering a comfortable car repair service in the daily routine and during accidents. For instance, Wrench is an app-based platform that provides on-demand automotive maintenance and repair services via a fleet of mobile mechanics. During the COVID-19 outbreak, the company is providing a contactless service.

Digitization has enabled various stakeholders, including car owners and insurance agents, to spectate the repair and part replacement costs auto repair shops charge. Most consumers avoid taking their vehicles in for repair service due to warranty concerns, time consumption constraints, and trust issues about the originality of the parts used. Transparency delivered via digitalization of auto repair and maintenance service is destined to resolve some of these issues, thereby creating opportunities for the automotive collision repair industry.

Regional Analysis

Based on region, the global automotive collision repair market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Europe is the most significant global automotive collision repair industry shareholder and is anticipated to exhibit a CAGR of 0.8% during the forecast period. The European market is characterized by a high technological advancement and a strong regulatory framework. Europe is home to numerous leading automotive manufacturers and suppliers, driving the demand for advanced collision repair services. The region's commitment to sustainability and stringent safety standards further influences the market dynamics.

As a global hub for automotive innovation, Germany significantly influences the European collision repair market. The country is known for its advanced automotive technology and high vehicle ownership rates. German manufacturers, such as BMW, Mercedes-Benz, and Volkswagen, drive demand for premium collision repair services that utilize cutting-edge technology. As per the German Association of the Automotive Industry (VDA), the automotive sector contributes around 5% to Germany's GDP, highlighting its economic importance.

Moreover, the insurance market in Germany also plays a crucial role, as it is highly developed and integrated with the automotive repair industry. Most vehicle repairs are covered by comprehensive insurance policies, ensuring a steady flow of work for repair shops. For instance, Allianz, a major German insurance company, has partnerships with numerous certified repair shops to streamline the claims and repair process.

The UK automotive collision repair market is shaped by its substantial vehicle fleet and high road traffic density. As per the Society of Motor Manufacturers and Traders (SMMT), the UK automotive industry employs over 800,000 people and contributes £82 billion to the economy. In 2021, the UK saw over 1.6 million new car registrations, indicating a significant market size for automotive services. Moreover, the surging adoption of electric vehicles (EVs) is also impacting the repair market, requiring specialized skills and equipment. The UK government seeks to phase out petrol and diesel cars by 2030, which is expected to drive a shift towards EVs and subsequently transform the collision repair industry. This shift demands new training programs and certifications for technicians and investments in advanced diagnostic and repair tools. All these factors are expected to boost the growth of the European automotive collision repair market.

Asia-Pacific represents one of the fastest-growing markets for automotive collision repair, driven by rapid urbanization and increasing vehicle ownership. This region's market growth is fueled by economic development and the rising middle class in several key countries, leading to higher disposable incomes and a surge in vehicle sales. China is the biggest automotive market globally, with over 25 million vehicles sold annually, according to the China Association of Automobile Manufacturers (CAAM). This massive vehicle base translates into a significant demand for collision repair services. Rapid urbanization and increased road congestion contribute to a higher incidence of road accidents, thereby driving the collision repair market. Moreover, the Chinese government's push for electric vehicles and the resulting market transformation create new opportunities and challenges for collision repair providers.

India's automotive collision repair market is expanding rapidly, driven by increasing vehicle ownership and improving road infrastructure. As per the Society of Indian Automobile Manufacturers (SIAM), the Indian automotive industry produced over 30 million vehicles in 2022. The rising middle class and urbanization are key drivers of this growth. The market is also influenced by the high prevalence of two-wheelers, which often require different repair services than four-wheelers. The adoption of new technologies and the expansion of organized service centers are shaping the future of the collision repair market in India. Thus, the factors above are estimated to boost the automotive collision repair market in Asia-Pacific.

Segmental Analysis

The global automotive collision repair market is segmented by vehicle type, product, and service channel.

Based on vehicle type, the global market is segmented into light-duty and heavy-duty vehicles.  The light-duty vehicles segment owns the highest market share and is estimated to exhibit a CAGR of 1.9% during the forecast period. Light-duty vehicles include vehicles with a maximum Gross Vehicle Weight Rating (GVWR) <8,500 lbs. Light-duty vehicles/passenger vehicles comprise hatchbacks, sedans, SUVs, and crossover cars. This segment is anticipated to be characterized by a high degree of dynamism, owing to the continual new product developments in the quest to fabricate modern-age automobiles that would ensure optimal fuel utilization and would be technologically advanced.

Moreover, the demand for alternative modes of transportation, government initiatives to enhance fuel economy, and the availability of alternative fuel vehicles are anticipated to increase sales of light-duty vehicles over the forecast period. In addition, adopting vehicles requiring alternative fuels and vehicles with multiple levels of powertrain electrification is anticipated to drive most vehicle sales in the industry.

Based on product, the global market is bifurcated into coatings & paints, consumables, and spare parts. The spare parts segment dominates the global market and is projected to exhibit a CAGR of 1.7% over the forecast period. The spare parts segment includes crash parts, repair materials, supplementary mechanical parts, and automotive tools used in the repair service delivery. The demand for replacement spare parts is driven primarily by the frequent occurrence of automobile collisions, which often damage integral components such as grilles, bumpers, and fenders. These incidents contribute significantly to the market's growth as consumers seek efficient solutions for restoring their vehicles to optimal condition. Moreover, there is a noticeable trend toward rising consumer awareness regarding the importance of timely maintenance and repair services. This growing awareness enhances vehicle performance and longevity and fuels the expansion of the spare parts market. Consumers increasingly prioritize maintenance to ensure both safety and preserve their vehicle's value over time.

Based on the service channel, the global market is divided into DIY, DIFM, and OE. The OE segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 1.5% throughout the forecast period. This segment encompasses services provided directly by original equipment manufacturers (OEMs), offering advantages such as easier replacements, comprehensive insurance plans, warranties, and superior durability with straightforward installation processes. The OE segment is expected to dominate the service channel distribution due to these inherent benefits provided by OEMs. This includes their robust infrastructure for facilitating replacements and repairs, which ensures reliability and customer satisfaction.

Moreover, the longevity of automobiles globally has contributed significantly to the demand for replacement parts. Consumers are increasingly opting to keep their vehicles for longer durations, necessitating reliable sources for high-quality replacement components and services.

Recent Developments

• March 2024- Crash Champions, a rapidly expanding company managed by its founders that operates top-notch car collision repair shops in the United States, officially declared the purchase of Performance Collision shops. This acquisition includes all nine of its establishments situated in Virginia, South Carolina, and Georgia.
• January 2024- CenterOak Partners LLC, a private equity firm headquartered in Dallas, announced the sale of CollisionRight, Inc., a prominent company in the auto body restoration services industry, to Summit Partners. CenterOak has now exited the auto aftermarket for the third time.

Analyst’s Perspective

As per our research analyst, the future of the automotive collision repair market is promising, driven by technological advancements and evolving vehicle trends. Autonomous vehicles (AVs) and electric vehicles (EVs) will introduce new repair complexities, requiring specialized skills and tools. The industry's shift towards digital transformation, eco-friendly practices, and consolidation will enhance efficiency and service quality. Despite challenges like skilled labor shortages and stringent environmental regulations, opportunities for innovation and growth abound. As vehicle technology advances, the collision repair sector will continue to adapt, ensuring it remains a vital component of the automotive ecosystem.