Business challenges for the UK crash repair sector in the face of declining volumes

ICDP

Publication Number: Executive Briefing 10/18

Author: Steve Young and Alex Cuningham

Date: September 24, 2018

Tags: Parts, Dealers

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The UK crash repair market is approximately £4.5 billion in annual revenue, with around 4,000 bodyshops, but also a network of parts and service suppliers.  It generates significant profits for some on the supply side, but often pain for other players.  The pain is going to increase, and the profits reduce as the result of structural changes that affect the sector generally.  In the UK, total miles driven by the total car parc will grow by 29% from 2016 to 2030, which would normally result in more accidents.  However, by 2030 we estimate that 72% of the parc will be equipped with at least automated emergency braking (AEB), and many will also have other Advanced Driver Assistance System (ADAS) features such as adaptive cruise control and blind spot warning.  This will result in an 18% decline in the number of repairs and a 35% reduction in the number of heavy repairs within the total, as the new systems reduce the number and severity of accidents.  The size of the UK repair market will fall by almost £1 billion.  This structural change in the market will add to the pressures coming from all sides, affecting workflow, sourcing, investment and staffing.  All players will need to reconsider the shape of their current business, where to invest, which relationships add value and what returns will be possible in return for that effort.

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