Abstract
Diagonal Reports' recent research into the fragmented US collision repair
parts and service market points to a shake-out in the market for crash repair
parts. OE parts suffer as the market stagnates while non-OE parts increase
sales. Larger collision repair service providers benefit from consolidation.
Research reveals:
- Original equipment parts still account for the lion's share of the crash
repair parts market but are losing sales to both non-OE and used parts which
now have 24% of this market. Non-OE parts are winning sales not only because
of their lower price but also because of quality improvements backed by
certification programs. Regulatory pressure to reduce disposal rates is
boosting demand for used or salvage parts.
- Independent collision repair service shops continue to account for most
sales in this fragmented market but larger shops and chains are benefiting
from consolidation. These changes in parts and service allowed some crash
parts suppliers and service providers to show double-digit sales increases in
an otherwise flat market. The value of the crash repair parts and services
market remains stagnant at US$33bn in 2005 compared to 2004
- Body and mechanical repairs continue to dominate the repair market but the
future looks more bleak for the refinish sector which may shrink.
- Suppliers of services - insurers and third party service providers - to
the collision repair market benefit from consolidation and as the industry
reduces cycle times and the costs of parts proliferation.
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