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The future of the collision repair industry

Monday, April 8, 2019 - 06:00
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One of the hot topics of conversation at collision industry events these days is the outlook for the future, with all eyes on the rapid advances in technology that are found in today’s vehicles and expected in tomorrow’s. With the advent of safety systems designed to lessen the impact of or even eliminate collision events, there is concern among repairers about the future of the industry. At a recent Collision Industry Conference event in Palm Springs in January, the audience was asked the question, “Over the next five years, do you expect the total revenue for the U.S. collision industry to grow, shrink or stay about the same?” The majority of respondents felt that the industry would continue to grow. This article explores some of the factors that are influencing industry growth.

Close to 40 percent of all 2017 model year vehicles in the U.S. were delivered with some form of Advanced Driver Assistance System (ADAS). The data for 2018 show that this number is now well over 40 percent, and with model year 2019 more than half of all vehicles sold in the U.S. will have some form of ADAS. Because these systems are designed either to eliminate or lessen the severity of crashes, it would seem that this would forecast a shrinking pool of work for collision repairers as the systems prevent collisions. Instead, we are seeing that because today’s vehicles are more expensive to repair (not to mention the presence of vehicles of various ages on the road), there remains robust work for repairers — and that the cost of sensors, cameras, computer modules and other ADAS components leads to higher repair costs. In fact, Mitchell’s research has shown that current generation vehicle repair costs are up 19 percent from the prior generation. As ADAS systems continue to proliferate this trend is likely to continue.

Not only is ADAS becoming more popular, the number and complexity of installed ADAS systems continues to grow with each model year. While a base model 2010 Chevrolet Malibu had no installed ADAS and just six airbags, the 2018 Malibu LT now comes with forward collision warning, front and rear parking sensors, rear backup camera, lane departure warning, front automatic braking, rear cross traffic alert, adaptive cruise control, blind spot monitor, pedestrian detection, aluminum hood & suspension components — and 10 airbags.

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As ADAS becomes more complex, so do the associated repair procedures. The 2010 Malibu OEM procedure only calls for sensor replacement following front airbag deployment and/or seat tensioner deployment. The OEM procedure for the 2018 Malibu requires replacement of the sensors in the area of accident damage “whether or not the air bags have deployed. Replace the impact sensor even if it appears undamaged…..DO NOT try to determine whether the sensor is undamaged, replace the impact sensor.” It is not hard to see how following these OEM procedures will lead to higher repair costs.

Mitchell analysts looked at the replacement costs of all parts that would typically be damaged in a front-end collision and found that repair costs grew from $1,652 for a 2010 Malibu to $3,627 for a 2018 Malibu. It is important to remember that many of the components in the 2018 Malibu repair are likely to result in lower severity impact – or even prevent a collision event entirely – however it is clear that a similar impact on a newer vehicle will likely yield considerably higher repair costs. The average estimate amounts for 2010 and 2016 Chevrolet Malibu’s two years after introduction are shown below:

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