Crash Repair Market Trends

GLOBAL AFTERMARKET PANEL

GAP The Global Collision Repair Market 2002: Press Release

The Global Aftermarket Panel (GAP) - Collision Repair Market 2002 provides the latest market intelligence on the global collision repair sector.

Market segments
Diagonal Reports identifies and describes the main market segments and types of players, and also the market structure in which the players operate. Typically insurance company contracts with largest service providers control about 70% of collision repair sales. The largest players handle all types of collision repair work but the small operators that account for less than 30% of sales concentrate on minor repair jobs.

Sales variations
Variations in business are reported and the factors impacting on the profitability of collision repair in the different market segments are identified. In general growth is modest or collision repair business is stagnant. Examples of common global factors – positive and negative – identified as driving the market include:
• Economic development.
• Technology (collision repair equipment and tools, computers).
• Legislation and regulatory measures (enforcement and compliance).
• Labour costs.
• Insurance companies.
• Seasonal factors (winter weather)
- Increased number of cars and young drivers
• Outlet location.

Insurers increase market control
Diagonal Reports identifies the leading insurers in the collision repair industry. It also identifies how insurers’ Direct Repair Programmes (DRP) are standardising prices and quality, and – from the perspective of service providers – reducing profitability. DRPs determine prices (based on cost of parts and labour), along with the type of parts and brands to be fitted, distributors used, etc. Insurers enforce quality standards by regular inspections.

Business segments in collision repair
Diagonal Reports identifies the main business segments in the collision repair market in the different types of establishment. In the leading establishments the biggest volume of business is minor front-end work on cars under five years, and more often under three years of age. Significant shifts in collision repair business patterns are identified. Minor jobs are almost always parts’ replacement and rarely actual repair work. This pattern holds true not just in the mature markets (e.g. USA and Canada), but in almost all emerging markets (e.g. Indonesia and Turkey).

Car makes and brands
Diagonal Reports identifies the car makes that account for most business – typically the makes with the highest sales –along with the type of parts (OEM and non-OEM), and brands handled. The typical parts’ purchasing criteria are also identified.

Rising costs of market entry
The shift from repair to parts’ replacement is continuing to consolidate the industry and raise the costs of entry. Only the biggest players can afford to invest in the expensive, high tech equipment that is required to repair new cars, and – equally importantly – to offer consumers the fast turnaround times they demand.

Grey market
Where relevant, Diagonal Reports describes and comments on a grey collision repair market. The grey market can include a variety of dubious practices in legitimate outlets (e.g. under reporting to avoid tax, false billing of non-OE parts at OE prices, handling stolen parts, counterfeit or spurious parts, etc.), along with unregistered (backyard) service providers, and even a collision repair sector that is controlled by organized crime.

Market authorities consulted
Diagonal Reports’ research is based on interviews with managers or representatives of companies specialising in collision repair. Types of companies and organizations include large authorised dealerships and repair franchises, small single and also multi-outlet independents, associations of repair outlets, specialist trade magazines, insurance companies, chambers of commerce, parts’ distributors, and industry research associations. Outlets interviewed include those authorised by companies such as BMW, Ford, Fiat, GM, Honda, Hyundai, Kia, Mazda, Mercedes Benz, Mitsubishi, Nissan, Renault, Tofas, Toyota, and VW, etc.

US Crash Repaair Market 06

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