Quota of glass repairIn order to show the differences between the European countries, three cluster groups of the quota of repair and replacement of automotive glass were identified. The overall quota of automotive glass repair falls between 0.1% and 4.3% per 100 passenger cars per year.
The lowest repair quota was identified in the South-Eastern European countries (0.1 – 0.5%) followed by the Baltic countries (Estonia, Latvia, Lithuania) and Norway.
The development of the repair quotaThe experts of wolk after sales experts estimate the development of the automotive glass repair quota in these three clusters for the next five years as follows:
- Cluster 1 (light green on figure 1): raise of the repair quota from 0.1%-0.5% to 0.5%-0.7%
- Cluster 2 (green on figure 1): raise of the repair quota from 0.6%-1.5% to 0.9%-2.0%
- Cluster 3 (dark green on figure 1): the repair quota of 1.6% will stagnate. This is due to the fact that some countries in this cluster have already reached a repair quota of 4.3% which is close to market saturation, and thus it is the best practice quota in the market.
Quota of glass replacementThe automotive glass replacement quota lies between 2.0% and 6.0% per 100 passenger cars per year. The difference between countries is therefore immense. The Baltic countries and Norway have a high replacement quota of over 5.0% compared to their repair quota. This fact indicates that the less repair quota is compensated with higher replace quota in those countries. In Belgium France, Denmark, Germany, Austria, Sweden and Switzerland, the quota for replacement is as high as the repair quota.
Influence of the insurance industryOne reason for the differences in the repair quota lies in the influence of the insurance industry. For an insurer, repair is the cost efficient solution in contrast to replacement. Moreover there is a correlation between the spread of automotive glass systems/ chains and the repair quota. The automotive glass systems/ chains are automotive glass specialists which generate more than 50% of their turnover with the glass business. In Germany, such companies are e.g. Wintec, Carglass and Junited Autoglas. In the South-Eastern European countries those automotive glass systems are not so widely spread as in Central Europe.
Handbook: „European Auto Glass Aftermarket"Wolk after sales experts analysed the European automotive glass aftermarket and summarised the results in a well presented handbook in English. In addition to the complete handbook (35 countries), nine individual country clusters are available now (see chart below).
The handbook contains additionally information about passenger car park, the replacement quota and the repair quota as well as information about the aftermarket volume of glass. Moreover it is illustrated which systems and chains are represented in the automotive glass industry in each country (automotive glass specialists, auto centres, car parts distributors). Furthermore the total amount of specialists of automotive glass is listed per country.
Which influence does the technical development have on the automotive glass specialists in the future?In the past the technical development had nearly no influence on the aftermarket volume, but on the know-how for the automotive glass installation. More and more sensors e.g. as for rain and light as well as driver assistance systems find their way into the windscreen. This technological progress with required calibration challenges the automotive glass specialists. High investments on equipment and training qualifications of employees come to the fore. Therefore an autonomous job description raises in importance because of advanced security aspects.
The upheaval in the automotive glass industryThe automotive glass industry has to master an upheaval period, as the calibration process from a manual to an automatic process will still take about five years. Those automotive glass specialists, that fail to keep up in this process, will have difficulties to establish themselves in the future. Therefore the suggestion for independent automotive glass specialists is to join a high-performance cooperation in order to compensate any technological disadvantage. Furthermore it is recommended to establish regional specialisation centre together with a mobile service to meet the rising requirements and to disburden the individual automotive glass specialist. The access to know-how is the one thing, but it does not give any information about the profitability – it just assures that they keep up with the technical advancement. The survival of the business does correlate more with the frequency of the performed works. This creates an advantage of the automotive glass specialists with more than 30 glass job per week over the generalist car service suppliers, independent garages and the body and paint shops. This advantage must be kept and strengthen by the automotive glass specialists to be able to meet the risen requirements of the intermediates in the future and to keep up profitability.
The future of automotive glass aftermarketThe development of the automotive glass business is increasingly difficult to forecast. According to the insurance industry in Germany for example, the amount of automotive glass works have reduced in 2014 by 15% compared to 2013. Regardless of non-decreasing car park and average mileage many automotive glass markets in Europe are shrinking. Unforeseeable climatically events such as damage through hail or mild winter are an unpredictable factor. It is not advisable to base future assumptions on past seasonal fluctuations. Additionally, the new technical development of the thin glass will reduce the damage rate of the windscreen for the first time, according to auto glass manufactures.
ConclusionAs the analysis "European Auto Glass Aftermarket for Passenger Cars" shows, the European automotive glass aftermarket has huge local particularities in the quota of repairs and replacements. Due to the unpredictability of the demand of automotive glass repair and replacement on the one hand and the increase of complexity of driver assistance systems on the other hand, it is absolutely important to look into the alternative business fields such as smart repair. The tire servicing industry has already adopted such diversification as they started offering full car service. This is not an easy process, and it will surely challenge those automotive glass specialists which are ready for such diversification. To conclude it should be mentioned, that the final goal is definitely to ensure a sustainable profitability in the long term.
What makes us suitable to support you in the automotive glass industry?Wolk after sales experts has been acting in the automotive glass market for more than 20 years and has carried out many successful projects. As one of the few competent and neutral consulting firms in the automotive glass sector, our service products are tailored for the automotive glass specialised garage. We have been working with professionals and practitioners with many years of experience. Based on expertise on numerous market research activities in the automotive glass industry, we build our expertise on concepts, consultancy and accompanied implementations by experienced practitioners.
How can we offer you support in the automotive glass industry?Our market research expertise and services are offered to those, who operate in the automotive glass industry (e.g. automotive glass specialists, wholesalers, producers and service providers for automotive glass products and peripheral products, and those who wish to establish themselves in the market).
Our offer is directed to companies,
- who are looking for practical support in daily routine of the automotive glass installation industry for example through consulting, coaching and implementation program "PRO-FIT"
- who have questions about strategic cost-effective business management and financing
- who are taking strategic and conceptual considerations on how to lead the company in the next 5 years (e.g. through a "Future-Workshop")
- who are planning to professionalise their sales
- who are looking for practical support on how to integrate new product lines/ new potential business fields in the existing automotive glass business