Why Investors are Eyeing Collision Centers

Although fewer people are traveling to work and school since the pandemic, there’s still a need to drive cars, and the safety and condition of them are critical. Collision centers or automotive repair and maintenance services can help keep all the features and systems of a vehicle functional throughout its lifetime. Regardless of how the economy is, automobile maintenance will always be in demand. With aging vehicles and an increase in sales globally, the automotive collision repair market is on a positive growth path.

The U.S. market for automotive collision repair services exceeded $89 Billion in the year 2020 and is anticipated to exhibit a CAGR of 2.3% between 2021 and 2027.

Factors Driving the Market

Despite inflation increases, rising prices of services, as well as supply chain shortages, the automotive industry proves to be resilient. The massive growth in the collision repair market can be driven by many factors, including advancements in repair technology, an increase in road accidents, as well as a growing consumer interest in road and automobile safety.

Additionally, with the increasing awareness of insurance for collisions and other damage, there is a huge demand for car parts in the automotive collision repair market. The insurance provided by companies has ties with many repair garages, which in turn, fuels the growth of the market. Strict government rules for passenger safety & traffic rules for vehicle maintenance also help to propel the growth of the market.

Key Players

After COVID, multiple-shop operators (MSOs) started expanding their portfolio, acquiring automotive shops across the nation. With the rising number of electric vehicles, smaller shop owners are struggling to acquire the resources for more complex and expensive repair tools and technology. Large operators backed by private equity capital will be better positioned to invest in the required resources and education as repair shop technology evolves. MSOs also can offer better benefits and job security to employees, helping them retain skilled workers amid a tight labor market.

Currently, the leading players in the market include:

• Denso Corporation
• Caliber Collision
• Continental AG
• Honeywell International, Inc.
• DuPont
• Johnson Controls, Inc.
• Federal-Mogul LLC
• Automotive Technology Products LLC