Merger and acquisition increase as the ADAS calibration market grows
The ADAS calibration industry is witnessing an increase in merger and acquisition (M&A) activity, as it’s projected to see a global growth rate of 12.8% annually through 2033, according to a new document from KPMG.
“The widespread integration of ADAS technology in new vehicles, coupled with the growing complexity of calibration processes, is fueling a substantial and expanding marketing opportunity, the document says.
It estimates that the size of the ADAS calibration services market in North America in 2024 was $1.2 billion. It also assumes the estimated annual U.S. ADAS calibration services revenue will be $3 billion by 2030. This is if there is widespread adoption in the aftermarket.
The document breaks the ADAS calibration sector into four players: service providers, equipment providers, technology providers, and dealerships and OEMs.
Caliber’s Protech and auto glass chains, Safelite, and Driven Brands’ Auto Glass Now, are provided as examples of service providers.
“These firms generate revenue on a per-calibration service basis, typically charging a few hundred dollars per session,” the document says.
Bosch, Hunter Engineering, Autel, Mahle, and TEXA are provided as examples of equipment providers.
“Equipment sales (and related software licensing) to shops form a distinct revenue stream in the market,” the document says.
AirPro Diagnostics and Repairify’s asTech are used as examples for technology providers.
“Some tech providers also operate service centers or mobile units, blurring lines with the service segment,” the document says, describing the providers.
The dealerships and OEMs are significant players, primarily for vehicles under warranty, the document says.
According to the document, ADAS features were found in about 11% of vehicles in 2020, which is expected to rise to 75% by 2030.
“ADAS sensors (cameras, radar, lidar) must be precisely calibrated to function correctly,” the document says. “After events like collisions, windshield replacements, suspension changes, or even alignment, recalibration is essential to restore safety systems. This necessity is fueling a specialized service niche.”
A new whitepaper from Ascential Technologies, Sentric, and ADAS Garage explores the safety implications, financial costs, and liability risks associated with failing to recalibrate or improperly recalibrating advanced driver assistance systems (ADAS) in vehicles.
Regulatory pushes for advanced safety systems on new vehicles, including from the National Highway Traffic Safety Administration, accelerate ADAS adoption and ensure calibration, it says.
It adds that independent repair shops are largely outsourcing ADAS work today, with 70% of collision shops lacking in-house calibration capability.
“This gap creates a growing aftermarket opportunity as vehicles out of warranty still need calibrations that dealerships can’t fully cover,” the document says.
M&A activity is likely picking up for a few reasons, including the highly fragmented ADAS calibration sector, the document says.
“Larger players can achieve economies of scale by acquiring smaller independent operators and integrating their operations,” according to the document.
The market is strategic for companies already in automotive services, such as collision repair or auto glass installers, it says. M&A could enhance service capabilities and market penetration, it says.
ADAS calibrations are also a recurring revenue stream that is necessary after various repairs, such as windshield replacements and collisions, the document says.
Potential challenges include high capital expenditures, scarce skilled labor, and rapid and continuous technological evolution.
“Rapid technological advancements require constant adaptation, posing a risk to sustaining long-term competitive advantage,” the document says.
In conclusion, the document states that the market can expect a consolidation of players that will shape the competitive landscape and foster innovation in calibration services.
“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.”
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