As the senior research analyst for automotive technology and aftermarket at S&P Global Mobility, few people spend as much time thinking about the implications of new technologies on the collision sector as Nishant Parekh.
Recently, he participated in an exclusive Q&A with Collision Repair to discuss the broader implications of rising repair complexity on the industry.
Collision Repair Magazine: How is the growing prevalence of ADAS-equipped vehicles changing repair workflows and cost structures in the North American collision sector?
Nishant Parekh: The complexity of calibration processes for ADAS-equipped vehicles is higher than that of traditional vehicle servicing. They demand a higher level of expertise and precision for workshops to remain competitive. For optimal performance, cameras, radar and ultrasonic sensors require perfect aiming and adjustment through OEM-prescribed calibration techniques after body repair work is done. The smallest misalignments can cause large deviations in the field of view or scan, potentially leading to false warnings or improper vehicle functionality.
For a non-ADAS vehicle, collision repair would typically involve restoring the vehicle structure, refinishing and delivery. For an ADAS-equipped vehicle, collision repair additionally involves diagnosing, calibrating and validating. In many cases, front assemblies with radar sensors need to be disassembled and then integrated back into chassis locations. Once calibration is done, post-scan diagnostics and, in some cases, a test drive is needed to ensure all systems are working accurately. Any adjustments to any ADAS system must be recalibrated for performance as well as safety.
Our research has indicated that recalibration of sensors and cameras is expected to drive up repair costs for ADAS-equipped vehicles by as much as four times that of traditional vehicles. However, repair costs could potentially stabilize in the long term as the technology matures and third-party services grow.
CRM: What impact are current tariff and supply chain pressures having on parts availability and pricing for repairers?
NP: The tariff measures have introduced new challenges, affecting global supply chains, sourcing strategies and cost structures for parts makers. The American automotive aftermarket industry imports over half of its raw materials or finished goods from Mexico, Canada and China, which have been subject to higher US tariffs. Several parts suppliers have passed these tariff-related cost increases to customers, as repair and maintenance products are nondiscretionary in nature and competitors have made similar moves. These price increases have made servicing and repairing vehicles more expensive.
For repairers, continued disruption in sourcing routes can cause higher inventory stocking costs and logistical challenges. Higher repair costs may result in fewer parts alternatives, which can lead drivers to delay critical repairs until more options become available or prices decrease.
However, some parts suppliers are undertaking tariff mitigation initiatives, including supplier negotiations on cost sharing, relocation with existing suppliers and sourcing from new suppliers in countries subject to lower tariffs. These efforts could ease some of the pressure for repairers.
CRM: How do you see the right-to-repair debate influencing independent repairers’ access to data and diagnostic tools over the next few years?
NP: The right-to-repair debate has the potential to impact independent repairers’ businesses as vehicle technology grows more complex. By 2029, a majority of new vehicles will be software-defined. Independent shops will need access to vehicle repair data to carry out repairs as more of these software-driven vehicles enter the repair market.
Aftermarket bodies say that access to vehicle data, which is collected by OEMs wirelessly and stored in their cloud servers, is at risk as OEMs tighten control over its availability. The independent aftermarket performs most out-of-warranty vehicle repairs and these repairs are generally less expensive than those carried out by dealerships.
By 2030, there are expected to be around 295 million out-of-warranty vehicles in operation in North America, accounting for roughly 80% of the region’s total on-road vehicle population, according to S&P Global Mobility. That represents a significant opportunity for the North American automotive aftermarket in terms of parts, servicing and repairs.
While access to vehicle repair and maintenance data would be beneficial, workshops will have to adapt to take full advantage of the opportunity. In addition to data, repairing and maintaining vehicles requires access to compatible replacement components, training and sophisticated diagnostic tools.
CRM: Where are the biggest opportunities for collision repair businesses to capture value as vehicle complexity increases?
NP: With increasing vehicle complexity, a car owner’s repair journey will evolve. Software-defined vehicles enable remote troubleshooting and over-the-air updates, which can resolve several issues without a physical visit to a repair shop. A connected vehicle car parc will likely generate less aftermarket revenue but more profit, as a modern electrical architecture and high remote addressability offer higher margins.
To capture value, the independent aftermarket can develop its own diagnostic tools and services that utilize vehicle data, and offer competitive maintenance and repair solutions alongside frequent updates. Shops can also explore new business models, including subscription-based services for parts or maintenance, to create new revenue streams that reduce dependency on OEMs.
The increasing level of ADAS in the car parc will require investment in ADAS-capable setups and specialized training to enable technicians to manage calibration processes. By 2030, the number of light vehicles and passenger cars with some form of ADAS on North American roads is estimated to be over 200 million, up from around 120 million in 2025. Of the total, around 20 million vehicles are forecast to have Level 2+ autonomy, up from around 6 million in 2025.
Workshops are facing the question of whether to bring calibrations in house as opposed to outsourcing them, given the investment cost and low initial volumes. Given the large investment and the uncertainty around insurance settlements, service centres will need to be strategic in their ADAS repair and calibration investments.
ADAS calibration technology companies typically suggest bringing calibrations in house if workshops see demand for more than 20 calibrations per month. Common indicators to gauge demand include windshield replacements, wheel alignments and collision repair on vehicles manufactured after 2015.
