Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • New round of Paycheck Protection Program funding opens
      Vaccine may usher sense of normalcy
      Cover-up: More retailers requiring face masks to curb COVID
      USW alleges COVID-19 violations at Kumho plant
    • GM banking on 'BrightDrop' EV to build commercial van business
      Stengel promoted to president of NAPA parent Genuine Parts Co.
      Former auto exec Tyrone Jordan joins Cooper board of directors
      Bridgestone crafts virtual city to showcase sustainable-mobility initiatives
    • New round of Paycheck Protection Program funding opens
      H&H broadens precure OTR business with Continuum mold acquisition
      Apollo to raise prices of Vredestein brand, effective March 1
      Taiwan tire makers propose settlement of import duties case
    • GM banking on 'BrightDrop' EV to build commercial van business
      Gary Price to head Love's Truck Care operations
      TA opens 6th Oregon location, bringing 50 jobs to area
      Love's opens Speedco shops in Ariz., Calif., Ga.
    • New round of Paycheck Protection Program funding opens
      Taiwan tire makers propose settlement of import duties case
      Wireless auto data debate continues
      World rubber demand in 2021 to recover to 2019 levels — IRSG
    • General Tire Canada renews sponsorship deal with Raceline Network
      GRI expanding ag tire capacity at 3-year-old Sri Lanka plant
      Point S Canada adds 61 stores to network in 2020
      New round of Paycheck Protection Program funding opens
    • General Tire Canada renews sponsorship deal with Raceline Network
      Indy Autonomous Challenge: High-speed, head-to-head, no drivers
      TGI secures Cosmo-brand naming rights at Fla. race track
      Firestone Grand Prix of St. Petersburg postponed until April
    • Kumho launches commercial LT, performance tire lines
      The new One: Nokian unveils all-season passenger tire
      Ford, Hyundai earn 2021 top North American vehicle honors
      BKT expanding its ATV/UTV lineup with Sierra Max Pro radials
    • WTC hosting webinar Jan. 20 on load-capacity standards
      Bauer Built completes expansion at Neb. facility
      Point S Canada adds 61 stores to network in 2020
      J.D. Power survey: Quick greeting key to customer satisfaction
    • Shocks/struts maker KYB unveils video training series
      Bauer Built completes expansion at Neb. facility
      Marinucci: Basic steps to email efficiency
      Point S Canada adds 61 stores to network in 2020
    • WTC hosting webinar Jan. 20 on load-capacity standards
      Denver's Brian Sump named AAPEX Shop Owner of the Year
      DUB, TIS Wheels founder Myles Kovacs is SEMA Person of the Year
      AAPEX: Using social media to promote your business
    • Vaccine may usher sense of normalcy
      2020 Review: PPP loans give boost to small businesses
      Latest COVID relief bill includes $325B in small-business support
      AAPEX: Do more cars in the shop mean more profit?
    • General Tire Canada renews sponsorship deal with Raceline Network
      Apollo to raise prices of Vredestein brand, effective March 1
      Taiwan tire makers propose settlement of import duties case
      Kumho launches commercial LT, performance tire lines
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      Choosing the right balancing equipment
      Safety tips for wheel balancing
      An introduction to wheel balancing
    • Video: Demounting
      Demounting Equipment
      Making rims ready for a tight seal
      Tire changer types, tips and trends
    • Video: Safety
      Making friends with OSHA
      Ergonomics on the shop floor
      Customers
    • Video: Tire Repair
      Tire repair: Shining a light on visual inspections
      Staying safe when repairing a tire
      Essential tools, materials and equipment for tire repair
    • Video: TMPS Service
      Decoding sensor data for TPMS diagnosis
      Replacement TPMS sensor overview
      The life-saving work of TPMS
    • Video: Training
      Advantages of apprentice program partnerships
      Options and resources for CE tech training
      Internship ideas to attract tech talent
    • Video:Vehicle Lifting
      All types of lifts for all types of work
      Tips and recommendations for lifting safety
      The gravity of proper lift points
    • Video: Wheel Torque
      Using torque sticks to speed service times
      The danger of too much, too little torque
      The importance of torque specifications
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
April 08, 2019 02:00 AM

Vehicle technology will cause disruption — way down road

Kathy McCarron
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    LAS VEGAS — Industry observers tend to overestimate the change that will take place in the next 10 years but underestimate what will happen beyond that.

    So while electric and autonomous vehicles will disrupt the automotive aftermarket, it won't happen for quite awhile, Evan Hirsh, a principal with PwC U.S., said.

    "The good news is you do have time to prepare," he told automotive repair shop owners and parts distributors during the Automotive Aftermarket Products Expo last November in Las Vegas.

    • This article appears in the April 1 print edition of Tire Business.

    "So I think these two extremes of putting my head in the sand or believing that the sky is falling — neither one of those is really great. I've got to objectively address some of these challenges, think about it but don't believe everything you read in the newspapers," Mr. Hirsh said.

    "The problem with this industry is anytime you ask about major change, things don't change radically in 10 years. The only thing I've seen change radically in this industry over 10 years is the huge consolidation you had in the channels where they went and bought people. That can happen fast.

    "But the idea that a bunch of repair shops are not going to be around or they'll change the channels, in terms of a different type of channel overnight, or the consumers are going to change their behavior or change out their vehicles, it can't happen because this is a slow-moving industry," Mr. Hirsh said.

    The independent aftermarket was considered a $77 billion industry in the U.S. in 2015 and it is expected to grow to about 1.5 percent a year through 2030 to $96 billion, he said, adding that the replacement parts rates have been decreasing while the vehicle parc has been growing.

    "All the growth that we enjoy in this market comes from price increases," he said, noting that more than a third (about 36 percent) of growth in the industry comes from new products and new technologies.

    Different categories are growing at different rates: the starter/ignition/battery category is growing relatively fast, about 1.8 percent, due to AGM (absorbent glass mat) batteries that are being introduced for start-stop technology. On the other hand, he said, sales of basic replacement parts, such as brake pads and shoes, are growing about 0.6 percent a year.

    CASE impact

    CASE (connected, autonomous, shared and electrified) vehicles are in their infancies and they have a lot of maturing to do before they become a significant part of the vehicle parc.

    Mr. Hirsh predicts it will take another decade or so before electric vehicles become more commonplace and more vehicle owners transition to electrified vehicles.

    Electrified vehicles account for less than 1 percent of the U.S. vehicle parc, Mr. Hirsh said, a share that probably won't change much until around 2026, when the cost of ownership of a fully electric vehicle should become equal to or better than an internal combustion engine-powered vehicle.

    "Once that happens, then things change," he said.

    Once electrified vehicles become affordable, adoption will happen quickly, he noted.

    "Electrification will gradually have an impact and then I think there is a tipping point somewhere where it becomes truly economical for the everyday vehicle purchaser to buy an electric vehicle as opposed to an internal combustible engine (vehicle)."

    Adoption of autonomous vehicles are even further away, he said, as they are still in the experimental/concept stage.

    Shared-mobility operations, such as Uber Technologies Inc. and Lyft Inc., have enjoyed phenomenal growth — about $30 billion in gross revenue in the U.S. — but passenger miles through Uber and Lyft account for less than 1 percent of total vehicles miles traveled.

    "Despite how much it has grown, how much we may use it for certain things, it's not a large part of the transportation network today," Mr. Hirsh said.

    Looking ahead, Mr. Hirsh said CASE vehicles will have positive and negative impacts on the independent vehicle aftermarket:

    Connected vehicles, by virtue of embedded technology, will have fewer under- or unperformed maintenance and repairs; however the connected technology will direct more service work to OEM dealers. But Mr. Hirsh said this will not have a significant impact on the independent aftermarket because OEM dealers don't have enough service bay capacity to handle all the vehicles — "They'd be swamped."

    Autonomous/shared vehicles will be maintained better by their owners, rack up more miles driven and have more parts related to Automated Driver Assist Systems (ADAS) to replace; but their adoption will result in fewer new vehicle sales.

    Electric vehicles will sport new expensive parts; but they also will have fewer parts to replace.

    Mr. Hirsh said the industry question really is not: "Are these things are going to happen?" but "When?" and "What is the impact?"

    "We live in an industry that doesn't change very fast because anything you start to do today has to work its way through 263 million vehicles on the road with an average age of over 12 years. It takes a while for that impact to be felt by us in the independent aftermarket," he said.

    Even by 2030, the effects on the market will be muted.

    "That doesn't mean they won't be felt by certain individual players, …" he said.

    Autonomous outlook

    Mr. Hirsh predicted people will start to see fully autonomous vehicles become accessible around 2035. The first place autonomous vehicles used on a regular basis will be in commercial applications, such as over-the-road trucking, he said.

    "I do believe when (the autonomous vehicle) comes, it will be extraordinarily disruptive, more so than people talk about today. What is a vehicle won't be the same. It's going to be completely different.

    "Who the 'customer' is won't be the same. It will be much less individuals like us and much more fleets and companies that run these things because (autonomous vehicles) are going to still be expensive.

    "And in every surrounding industry — whether I'm in the service industry or whether I'm a gasoline station or whether I sell car insurance — every single one will be turned upside down when this technology becomes viable." he said.

    " No doubt about it. The issue is we got a long way to go, despite what people may tell you."

    Mr. Hirsh said four main things have to be addressed before autonomous vehicles become viable:

    Technology and cost. Today, the technology is still in the experimental and developmental stages.

    "Today, no matter what people may tell you, the sensors for these things that have to be able to see and sense on their own aren't up to snuff. They don't do well in the dark. They don't do well in bad weather.

    "And the problem is, today in the United States, we kill each other on the road. Over 30,000 of us die each year and we put up with that because of what we get in return — the benefits of being able to drive our own vehicles.

    "But if one of the large OEMs produced an autonomous vehicle that killed 100 people a year, do you think we'd be as forgiving? I don't believe so," he said.

    "I believe the standards and requirements for safety and reliability are going to be quite different for autonomous vehicles. And to reach that level of safety and reliability, first that technology doesn't exist today.

    "Whether it's sensor technology or computing technology or communication technology, whatever it is, it's not quite there yet. Some of them are close, some could be there in two years, but even once they are, we need a while to test these things.

    "Some people estimate it will be six years, five years, seven years to validate these things. That's not atypical in the automotive industry. It's a while before we validate it, despite what anyone will tell you."

    Installed base. It will take a long time for autonomous vehicles to become a significant percentage of the vehicle parc.

    "If everything I produce today was autonomous, it takes me 10 years to get half of the installed base. There's 260 million vehicles on the road with an average age of 12 years old. It takes a while for these things to have a huge impact," he said.

    Another problem for adoption is that autonomous vehicles don't get along well with human drivers, he said.

    He used the analogy of setting loose 100 autonomous vehicles in New York City traffic with its notoriously aggressive taxi drivers. He surmised that because autonomous vehicles are programmed to avoid accidents, "you'd have every one of those 100 vehicles cowering on the side of the road — not moving."

    Cost also will inhibit adoption on a major scale, as autonomous technology can add $50,000 to $100,000 to the cost of a vehicle.

    "Only the wealthy and fleets would be able to afford it," he said.

    Liability and ethics. What happens when an autonomous vehicle has to make a choice between killing a passenger or killing someone on the road?

    Today we don't allow machines to make life and death decisions, he said, and we haven't decided who should be allowed to program machines to make those decisions. There also is the unresolved issue of who wold be liable if an autonomous vehicle caused an accident — the owner or the manufacturer?

    Standards and infrastructure. Autonomous vehicles need to operate with an infrastructure that enables vehicle-to-vehicle communications.

    "And since a lot of the cities we live in can't afford to fill the potholes, I think it's going to be a while before they install the technology to make this work," Mr. Hirsh said.

    "I think we're going to get there, but it's going to take a while. That is why our forecast for autonomous vehicles to be ubiquitous, despite what interested parties — Uber or Waymo — will tell you, ... fully autonomous vehicles are a ways out."

    Getting prepared

    The good news is that the independent automotive aftermarket has time to prepare for the changes ahead, Mr. Hirsh said, but the industry cannot be complacent. The changing environment will continue to pressure those that do not leverage differentiation, innovation, M&A and/or geography to expand.

    Amid all the new technology and disruption, however, there still will be a demand for the independent repair shop in the future.

    "First of all the (OEM) dealers are not big enough to replace the independent aftermarket," Mr. Hirsh said. "There aren't nearly enough service bays … and they're not investing in new service bays. ...

    "I do believe that independent aftermarket repair shops of five to 10 years from now will probably look different — higher scale, better training, more investment in tools, be bigger, more bays. They're not going to be Bob's single shop. There's going to be some changes.

    "But I still contend 10 years from now — because by and large 10 years from now we're talking about that same installed basis today because it doesn't change over that fast — it is going to be the independent repair technician.

    "I'd have to have every single dealer in the United States investing huge amounts in new service bays — which they are not doing. Just can't happen.

    "It may not be the same independent repair technician that's there today, he may be replaced by the guy down the street who's a smart guy and invested in marketing and technology and training, etc., but that's who' s going to be doing the majority of these repairs 10 years from now. I'm willing to bet on that one."

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • List Rental
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION