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Industry Remix: New Romans Group report dives into changing industry landscape

Toronto, Ontario — Ever since the COVID–19 pandemic began people have been eagerly awaiting the “return to normal” that we were promised, but a new whitepaper from The Romans Group suggests that the auto industry that comes out of the other side of this won’t look quite the same as the one that came in.

In the new report, entitled “The Great Reset: The Impact of Technology, Consolidation and the Pandemic on Auto Claims and Collision Repair Going Forward”, authors Vincent Roman and Stephen Applebaum delve into a multitude of ways that the COVID-19 pandemic has the potential to fundamentally change the way the collision industry operates.

Much of the change we are due for can be seen in traffic trends observed in the initial months of lockdown as well as in the shifting desire for remote work options among employees and the proliferation of ADAS technology.

According to data compiled by The Romans Group, “Crashes—and deaths—began surging in the summer of 2020, surprising traffic experts who had hoped that relatively empty roads would cause accidents to decline. Instead, an increase in aggressive driving more than made up for the decline in driving. And crashes continued to increase when people returned to the roads, later in the pandemic.”

The number of U.S. traffic deaths surged in the first nine months of 2021 to 31,720. The estimated number of people dying in motor vehicle crashes from January to September 2021 was 12 percent higher than the same period in 2020. That represents the highest percentage increase over a nine-month period since the Transportation Department began recording fatal crash data in 1975.

The average repair severity stood at $3,527 at June 30, 2021, up 6.0 percent compared to $3,327 for the prior 12-month period.

The effects that remote work models have had over people during the pandemic are also likely to spill over into the post-COVID period as work practices made necessary by lockdown measures are being seen to persist among workplaces.

“Many of us initially assumed that working from home would be temporary and that a return to pre-pandemic working models was only a matter of time. We now know that to be wrong,” reads the report.

The rapid implementation of remote work models has given the average employee, across many industries, to take stock of their work-life balance and weigh out the pros and cons of traditional employment in a way never seen before in North American industry.

“Owing to the trend of working from home, the lines between work and leisure often get blurred, making professionals work beyond their dedicated hours. Working remotely for almost two years has gotten several employees used to the new trend. Some employees will inevitably quit their existing jobs and search for new opportunities if their employers leave them with no option but to work on-premise.”

In regards to ADAS technology, the report acknowledges that not yet enough data exists to forecast the long-term impact of ADAS on accident frequency, existing data and opinion indicate that overall accident frequency is likely to decrease as ADAS features proliferate but the nature of accidents will shift until all vehicles are similarly equipped.

By 2030, 75 percent of vehicles in the U.S. are anticipated to include some sort of ADAS features. Compared to similar vehicles without any core ADAS features, vehicles with at least one core ADAS feature resulted in one percent lower personal injury claims severity and four percent lower property damage claims severity.

The IIHS also recently introduced a new system for rating ADAS features, a move that many in the industry believe will add further incentive for automakers who may be lagging behind in this regard.

The Romans Group report concludes that “barring another ‘black swan’ event in the next decade, the automotive ecosystem of 2030-2035 will be virtually unrecognizable from today.

“Some legacy market leaders will lose ground and disappear, new market entrants possessing truly transformative technology and business models will rise, new and unprecedented inter-industry partnerships and alliances will emerge, and above all, evolving consumer preferences and choices will dictate almost all of the change,” read the report’s summary.

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