According to a new report from the KPMG U.S. Manufacturing Institute Automotive Center, original equipment manufacturers (OEMs) will see a substantial, 48%, dent in their lucrative collision parts business as a result of self-driving cars. In fact, KPMG projects that OEM collision repair revenue, which was $5.6 billion in 2015, could drop to $2.7 billion by 2030 and dwindle to $1.4 billion by 2040.
The new report, “Will autonomous vehicles put the brakes on the collision parts business?,” notes that despite accounting for less than 3 percent of OEM revenue, collision parts make up on average 10 to 20 percent of operating profits. Based on the revenue impact, OEMs can expect a 4 to 9 percent reduction in operating profits by 2030 and a reduction of 13 percent by 2040.
“OEMs have already begun to deal with the design and engineering challenges related to autonomous vehicles,” said Gary Silberg KPMG’s U.S. Automotive leader. “And while their focus may be on bringing the first self-driving cars to market, OEMs need to contend with the decline in demand for collision parts that these safer, autonomous vehicles are expected to bring by reducing driver error and lowering accident rates.” Remarkably, most OEMs expect to be selling fully self-driving vehicles between 2020 and 2025, if not sooner. As advanced driver assistance systems become more prevalent in vehicles, KPMG projects crash rates could decline by more than 60 percent by 2030 and 80 percent by 2040, which in turn could result in a 50 percent decline in the overall collision repair market within the next 15 years.
Download and Read the whitepaper – “Will Autonomous vehicles put the brakes on the collision parts business”
Source: KPMG U.S Manufacturing Institute