Automotive Collision Repair Market

Market Overview

The global automotive collision repair market size was valued at USD 228.56 billion in 2022. It is estimated to reach USD 270.74 billion by 2031, growing at a CAGR of 1.9% during the forecast period (2023–2031). Factors like advanced technology usage in auto parts fabrication and surge in consumer and passenger automobile production stimulate market growth.

Automotive collision repair refers to the restoration and replacement procedures 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.

Market Dynamics

Global Automotive Collision Repair Market Drivers

Advanced Technology Usage in Auto Parts Fabrication

Technological advancements have brought considerable global growth in the automotive collision repair market. Repair professionals can now utilize computerized measurement to assist with frame straightening, which provides precision, allowing the technician to restore the frame to the manufacturer's specifications. Likewise, computerized alignment technology allows technicians to perform more precise vehicle and wheel alignments, restoring optimum balance and preventing uneven tire wear.

Stringent production norms aimed at cutting down vehicle production costs have made automotive vendors improvise in optimizing their techniques and bringing in advanced technology and innovation to their products to reduce automobile production costs in price-complex markets. The modern age production technology, such as 3D printing of automotive parts, is widely utilized by industry leaders to optimize their production costs, with 3D printing facilitating efficient fabrication performance and emission toxicity reduction. The market for automotive collision repair is anticipated to expand due to technological advancements and rising R&D expenditures by manufacturers and trade associations.

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 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.

As per 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.

Global Automotive Collision Repair Market Restraint

Environmental Concerns

Certain environmental factors challenge the automobile collision repair 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. In addition, regulations in developed markets of North America and Europe have banned the use of 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, 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.

Global Automotive Collision Repair Market Opportunities

Digitalization of Automotive Repair and Maintenance Services

The automotive collision repair 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. In addition, 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 provided a contactless service.

Additionally, digitization has enabled various stakeholders, including car owners and insurance agents, to spectate the repair and part replacement costs auto repair shops charge them. 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 the digitalization of auto repair and maintenance services will resolve some of these issues, creating opportunities for the automotive collision repair industry.

Regional Analysis

Europe Dominates the Global Market

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 market shareholder and is anticipated to exhibit a CAGR of 0.81% during the forecast period. Due to the increasing penetration of vehicles with enhanced safety features and stagnant sales, the region is expected to experience a constant CAGR over the forecast period. In addition, rising metal part replacements and damaged plastics are anticipated to boost the growth of the European market. Europe's market is expected to rise substantially because of strict road and vehicle safety laws and the rising demand for luxury vehicles.

Asia-Pacific is predicted to exhibit a CAGR of 3.6% over the forecast period. This is due to its developing living standards of people and its high vehicle production. It is also anticipated to be the fastest-growing market for automobile production. The number of specialized repair facilities devoted to maintaining certain vehicles is anticipated to rise with the increasing penetration and adoption of gas and hybrid electric cars.

Additionally, the region is expected to grow rapidly over the coming years since it is a prosperous manufacturing hub and a potentially fruitful market for sales of light-duty automobiles. As a result of factors like the increased availability of low-cost replacement parts in countries like China and India and the high prevalence of automotive accidents on crowded roads, the region is expected to show a higher CAGR over the projected period.

North America will embrace hybrid electric vehicles more quickly and broadly than other regions due to its faster rate of technological advancement. Due to this trend, the region is anticipated to witness a growing proportion of specialized automotive collision repair centers dedicated to servicing vehicles of a particular make, such as alternate fuel-powered vehicles.

The United States market possesses a significant portion of the worldwide industry, with around 85% of sales originating from the North American market. This dominance can be attributed to the country's elevated incidence of traffic accidents. As per the U.S. Bureau of Labor Statistics, approximately 13 car accidents occur every minute in the U.S. Moreover, approximately 40,000 collision repair shops in the United States contribute significantly to the region's market expansion of collision repair services.

Segmental Analysis

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

Based on vehicle type, the global automotive collision repair 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. The light-duty vehicle segment is poised for high growth over the forecast period. 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 are technologically advanced.

Additionally, 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. Adopting vehicles requiring alternative fuels and vehicles with multiple levels of powertrain electrification is anticipated to drive most vehicle sales in the industry.

Heavy-duty vehicles include a maximum Gross Vehicle Weight Rating (GVWR) above 26,000 pounds. Heavy-duty vehicles comprise commercial and multi-axle vehicles such as trucks and buses. Heavy-duty vehicles depict a slow growth rate due to rising environmental concerns and fuel costs. However, it is anticipated that heavy-duty vehicles will be used to convey bulk products within any country or region. The demand for heavy-duty vehicles outfitted with the most advanced technologies for hauling and loading is anticipated to increase as international trade expands.

Based on product, the global automotive collision repair market is bifurcated into coatings and 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 high number of automobile collisions that cause damage to integral components such as grilles, bumpers, fenders, dings, and marks fuels the demand for replacement spare parts. Increasing consumer awareness of the significance of maintenance and repair in enhancing vehicle performance and lifespan drives the expansion of the spare parts market.

The paints and coatings segment mainly includes colored paints and scratch-resistant coatings, vehicle top coats, coatings for plastic parts, electrode position coatings, and glass coatings. The segment's growth in the automotive industry is primarily attributable to the swiftly evolving paints and coatings technology, which satisfies the most recent aesthetic and protective automobile materials. Due to surging environmental concerns about  using harmful synthetic coatings and refinishing materials, paints and coatings are anticipated to become more popular in high-volume markets.

Based on the service channel, the global automotive collision repair 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% over the forecast period. The OE segment includes the services given by the original equipment manufacturers. The OE segment is anticipated to capture the highest share in service channel distribution due to OEMs' provision for easier replacements, insurance plans, and warranties, as well as better durability with ease of installation. Globally, people are keeping their automobiles longer, which has bolstered the demand for replacement parts. Due to sustained demand from emerging economies, the automotive collision repair industry will continue to expand substantially.

The preferences of millennials are migrating from OE and DIFM to DIY when it comes to replacing parts such as headlights, tires, and regular automobile maintenance. The DIY segment is anticipated to boost at the highest CAGR in Asia-Pacific, followed by South America. In addition, automotive manufacturers are rapidly focusing less on buying brand-new cars and more on customizing existing models to fit the needs of individual customers. Multiple companies have initiated the production of complete packages that offer do-it-yourself solutions to consumers. Federal-Mogul Holdings' segment with the highest revenue in 2020 was the Do-It-Yourself segment.

Recent Developments

• July 2023- I-CAR announced the official inauguration of CollisionCareers.com, a pioneering website that connects individuals with rewarding opportunities in collision repair.
• July 2023- BMW North America joined I-CAR's Sustaining Partner Program, which helps fund collision repair education and support initiatives that reduce training redundancies. In its announcement of BMW's participation, I-CAR stated that its program is "designed for partners to demonstrate advocacy and provide funding for I-CAR's industry-wide efforts."