The uptake of ADAS technology and the complexity of its calibration and repair is driving a trend in mergers and acquisitions in the US, according to a new report.
ADAS features were found in about 11 per cent of vehicles in 2020, which is expected to rise to 75 per cent by 2030, the KPMG report found.
It also predicts a global growth rate of 12.8 per cent annually through 2033, according to the report From Niche to Necessity.
The ADAS calibration services market in North America in 2024 was $1.2 billion and this would grow to $3 billion by 2030 based on the trends predicted in the report
“ADAS sensors (cameras, radar, lidar) must be precisely calibrated to function correctly,” the report notes. “After events like collisions, windshield replacements, suspension changes, or even alignment, recalibration is essential to restore safety systems. This necessity is fuelling a specialized service niche.”
In the US about 70% of collision shops lack in-house calibration capability and are outsourcing the services.
Vehicle out of warranty or being repaired after collisions have created the market opportunity to provide these services and, in the US, the larger players in the market who can achieve the economies of scale are acquiring smaller companies according to the report
It found while the growth in ADAS calibrations offered ongoing revenue streams , and offered opportunities to businesses such as such as collision repair or auto glass installers there were also barriers to ongoing viability prompting the takeovers and mergers
These challenges included high capital expenditures, a scarcity of skilled labour, and rapid and continuous autotype technological evolution that required constant adaptation and posed a risk to sustaining long-term competitive advantage.
The report found these factors were driving the consolidation in the US ADAS market.
“For stakeholders ready to navigate the challenges and capitalize on the opportunities, the ADAS calibration sector offers a promising investment thesis, poised for expansion alongside the accelerating adoption of advanced vehicle technologies.”