Key Media & Research (KMR) recently released its U.S. and North American Auto Glass Market Report [2020 edition]. The 35-page report is a comprehensive look at the domestic aftermarket and OEM automotive glass industry, covering manufacturer market shares, annual replacement estimates, market landscape, regional and state-by-state demand, and much more. Below is an overview of several indicators on the state of the market, as drawn from the report:
US Aftermarket Demand
Miles driven is a key indicator of demand for automotive glass replacements and repairs, with road accidents/collisions and flying road debris among several primary causes of glass damage. Number of registered vehicles in the U.S. is another primary indicator of auto glass replacement demand.
Annual miles driven increased by over 10% from the most recent downturn in 2011 to 2018. KMR estimates miles driven will increase 1% from 2018 (2.22 million) to 2019 (3.26 million). The number of registered vehicles in the U.S. increased by 14% from a 2010 low (242 million vehicles) to 2018 (276 million vehicles). From 2018 to 2019, this total will continue to increase at a faster rate (just under 2%) than miles driven.
Consistent growth in annual miles driven and registered vehicles on the road, in addition to collective year-over-year revenue increases among dealers, indicates a steady annual increase in windshield replacements over the past half-decade. Additionally, stable year-over-year declines in property crime rates and the volatility of relevant weather-related events (such as hail and wind damage) has meant slower growth in demand for non-windshield automotive glass.
North American OEM Demand
Demand for original equipment manufacturer (OEM) automotive glass in North America can be directly tracked with vehicle production in the region. In 2018, the year in which the most recent data is available, just under 17.5 million vehicle glass sets (one set includes all glass lites for a single vehicle) were installed in new vehicles produced in the United States, Canada and Mexico combined. Demand for OEM automotive glass sets in North America peaked in 2015 after six years of strong increases.
The largest spikes in demand came at the beginning of the economic recovery following the Great Recession, with double-digit increase in 2010, 2011 and 2012. Demand declined in 2016 and 2017 before rebounding in 2018. Vehicle production in North America will have increased an estimated 0.5% in 2019 and is projected to flatten in 2020 and edge up in 2021. While demand for new vehicles in the U.S. is slowing, several drivers will increase domestic production over the next few years, including investment in production of vehicle types previously imported from other regions, trade/ tariff concerns, and consumer preference for pickup trucks.
US Replacement Market
The U.S. auto glass repair and replacement market is increasingly concentrated in some respects but highly fragmented outside of a few major players. Those major players have, in recent years, overtaken large shares of the market, partly through mergers and acquisitions. The largest major player—Safelite Group—now owns upwards of one third of the U.S. auto glass services market, according to KMR estimates. In recent years, Safelite has acquired several of its key competitors, most recently TruRoad, the previous No. 2 player in the industry.
Despite Safelite’s increasingly massive hold on market share, the backbone of the industry remains its thousands and thousands of small and medium-sized businesses throughout the country. There are some other major players, most notably the Boyd Group, which includes Gerber Collision & Glass, and Glass America.
According to AGRR Magazine’s 2018 Top Dealers list, there are at least five other companies with $25 million or more in annual sales, and a half-dozen others with at least $10 million in annual sales, all operating anywhere from five to a few-hundred locations. Some 50-plus other companies that made the list operate in the millions, most with multiple locations, while the overwhelming majority of establishments in the country are still small 1- to 5-man shops, according to a recent study by KMR.
This article originally appeared in the November-December 2019 edition of AGRR Magazine. CLICK HERE to view.