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Summary of our market study
The global vehicle assistance market, valued at $22.3 billion, was projected to grow at a CAGR of 3.8%, reaching $29 billion by 2026. In Belgium, the car maintenance and repair market, while not exclusively for vehicle assistance, similarly showed an increase from €3.59 billion to €4.30 billion. This growth can be attributed to an increase in vehicle ownership, especially in Europe and Asia, and the aging automotive fleet requiring more services, with the average car age in Belgium rising to 9.01 years. Demand drivers like fuel system issues (21.5% for new cars and 19.7% for used cars) and electrical installation problems significantly influence service requests.
The Flemish region accounted for the most accidents per 1,000 inhabitants as compared to Brussels and Wallonia, suggesting a higher need for vehicle assistance services there. COVID-19 had a varying impact; traffic decreased, leading to lower immediate demand for assistance services, but issues like battery problems increased due to infrequent vehicle use. Companies shifted to providing emergency assistance and repair appointments during the lockdown. The industry mostly comprises SMEs and local garages, but larger players like insurance companies are influential, with AXA Belgium generating €6 billion in revenue. Average prices for assistance varied, with accident/damage costs at €3,513 and on-the-spot towing services ranging from €60 to €178 per year, depending on the package and provider. The market structure is affected by both European Union laws and local Belgian regulations.
By 2020, despite the challenges posed by the pandemic, the combination of various demand drivers, including the aging vehicle fleet and steady demand for car ownership, suggested that the vehicle assistance service industry in Belgium would remain stable and potentially grow in the long term, driven by the need to service older vehicles and adapt to evolving consumer needs.
Shifting Dynamics in the Belgian Car Breakdown
The Belgian car breakdown assistance market is a dynamic field influenced primarily by trends within the automotive industry. The demand for such services is closely associated with the common issues that drivers face, such as problems with fuel systems, electrical installations, and engine troubles. Particularly, fuel system issues appear to lead the way as the most frequent problems in both new and used cars, likely resulting from incorrect fuel usage. For new cars, these issues comprise between 20% and 25% of all reported malfunctions, while used cars exhibit similar patterns with mechanical errors arising more prominently due to wear and tear.
The aging fleet of vehicles on Belgian roads also fuels the demand for breakdown services. Over the years, the average age of cars has been on the rise, reaching more than 8 and less than 10 years—an increase that correlates with a growing need for vehicle assistance. This is further supported by the fact that Brussels hosts an older collection of cars compared to other regions, suggesting a higher potential demand for services in that area. Interestingly, Belgium holds a position within the top five concerning the lowest average ages of cars within the EU, where the average stands at more than 10 years. Accident rates and traffic trends are additional pivotal factors affecting the demand for car assistance services. While the number of accidents in Belgium has seen a downward trend with a decrease of approximately 15% from over 35,000 to less than 40,000 accidents, this doesn't necessarily translate to a decreased need for breakdown services.
The actual impact might be nuanced, as the type and severity of accidents, as well as people's proclivity to subscribe to towing insurances even if they rarely use them, play a significant role. The recent pandemic has also had a two-fold effect on the industry. On one hand, the substantial reduction in traffic and new car registrations, plummeting by more than 90%, have negatively influenced the demand for vehicle assistance. On the other hand, emerging issues such as battery problems caused by decreased usage and limited movement have the potential to spur demand. The search interest for breakdown services sharply reduced around the peak of COVID-19 restrictions, mirroring a potential decline in revenue for the sector during this period. Beyond the direct consumer demand, the structure of the industry, characterized by a multitude of small and medium-sized enterprises (SMEs), plays a role in the market dynamics.
"Navigating the Competitors: Leading Forces in Belgium's Car Assistance Marketplace" As the car assistance service industry continues to evolve, several key players have established themselves at the forefront in Belgium. These companies not only provide critical services during vehicle breakdowns but also offer comprehensive insurance solutions to cater to various customer needs within this sector.
- First on the list is AXA Belgium, an integral part of the AXA Group, which is a global leader in insurance. Known for its robust portfolio of insurance products, AXA Belgium has a significant presence in the car assistance market, offering customers peace of mind with its reliable roadside assistance packages and motor insurance policies.
- Next is AG Insurance, Belgium's leading insurance company, which boasts a deep understanding of local consumer needs. AG Insurance provides a range of services, from car insurance to roadside coverage, ensuring that its clients are well-protected against the unexpected. Europ-assistance is another prominent name known for its dedication to helping customers in distress. This company has carved out a strong niche within the car assistance sector, offering extensive coverage that spans not only Belgium but also other parts of Europe. Their versatile plans cater to an array of vehicle assistance requirements, delivering timely and effective services round the clock.
- Lastly, Touring is a reputed entity in the realm of road assistance, distinguished by its swift and efficient response to on-road emergencies. Touring's services are designed to meet the needs of travelers, ensuring their journeys remain uninterrupted, whether within city bounds or across borders.
Together, these companies play a crucial role in maintaining the momentum of the car assistance industry in Belgium. They remain the primary actors that consumers turn to in times of need, driving forward with a blend of traditional values and innovative solutions to serve an age-diverse vehicle landscape amidst the ebb and flow of regulatory changes and market demands.
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Summary and extracts
1 Market summary
1.1 Introduction and definition
Car breakdown assistance consists of repairing a vehicle at the place of intervention (or in a secure area nearby); most often it involves a simple mechanical intervention (fuel supply, modification of electronics, or tyre replacement).
Globally, the industry is booming as cars are ageing and roadside assistance connectivity increases, which subsequently makes it easier to implement the service.
In Belgium, towing and recovery is mainly carried out by specialised recovery companies, which are few in number and concentrated in highly urbanised areas. However, SMEs are facing competition to insurance companies who offer fixed prices per year for towing services.
Finally, the car breakdown service industry has suffered severly in the last months in light of COVID-19 due to diminished car activity.
1.2 The global market is growing
Source: ****
In ****, the global vehicle assistance market was valued at $**.* billion; this value is expected to increase by a CAGR of *.*% until **** to reach $** billion.
Amongst the key drivers of this market growth we find the fact that more cars are purchased in Europe in particular. Also, there is a rise in aging automobile which requires more servicing. Asia will also grow considerable during this period as more people can afford cars and traffic issues remain high.
1.3 Steady growth in the domestic market
For this section we use the code NACE G*** "Maintenance and Repair of Motor Vehicles" to obtain Belgium's market size. Although this is not entirely dedicated to vehicle assistance per se, it still serves as a credible proxy for the market in general.
Source: ****
Since ****, the Belgian car maintenance and repair market has been stable when measured through revenues. In ****, the market accumulated €*.** billion; in **** this value had increased to reach €*.** billion.
The market peaked in **** only to decrease until ****, and finally remain stable between **** and ****. The increase we have seen lately comes from hotter summers where technical failures are more frequent, and also an increase in commuting. In particular, the breakdowns concerned engine, battery and starting problems (***). [***]
2 Demand analysis
2.1 Demand drivers
In this section we aim to analyse why consumers request vehicle assistance in Belgium. Overall, the vehicle assistance industry is almost entirely dependant on events in the automotive industry, hence this is where we place emphasis when highlighting demand drivers below.
Source: ****
The graph above depicts the claim frequencies of new cars. In other words, it shows the distribution of claims made for an error with the car and thus provides insight on which problems are the most frequent. From this we find that **.*% of all reported issues are related to the fuel system of the vehicle. Most likely, this is due to the fact that individuals use the wrong gas when filling up the tank.
In second place we find the electrical installation (***).
Interesting to note is that the electrical drive and hybrid system claims are almost close to *, which underlines the insignificance of these problems. In other words, although we are heading towards a future with more electrical cars, and hence a need for industry players to adapt their services thereafter, the current impact of this change remains very low.
Source: ****
Following the same logic as in the previous graph, we find that the issues related to used cars ...
2.2 Accidents
Source: ****
An important metric to consider when valuing the evolution of the car assistance industry is the number of accidents that occur. Indeed, this correlates directly to the need of such services.
From the graph above we see a clear decrease in the number of accidents in Belgium in the last years. In **** **,*** accidents occured, whilst this number decreased by close to **% to reach **,*** in ****.
Although this is positive for society overall, it doesn't necessarily translate into the same impact for the car assistance industry who "live" off road assitance. However, there are also players who provide insurance in terms of accidents, and for them this data is good since they need to use less resources whilst still obtaining the fixed insurance fee.
Source: ****
To understand where accidents occur, and thus where the largest cluster of car assistance companies should be located, it is necessary to break accidents down based on location.
From this we see that a clear majority of accidents (***).
This metric is not entirely accurate however; since there are differences in the population for each region, we create a per capita measure to understand which region has the most accidents, and thus is the most prone to use ...
2.3 Cars, trucks and traffic trends
Source: ****
The graph above depicts the evolution of car ownership in Belgium measured through % of households. There is a decrease, albeit small, of around *.*% between **** and ****. Nevertheless, the penetration rate remains high, and this development shouldn't worry car assistance companies. In other words, the decrease in % of household owning cars won't have a negative effect on cash flows for the industry in the short run.
However, on the long run it is plausible to argue that the car fleet in Belgium will decrease as environmental matters causes reluctance to own a car. Indeed, talks are currently in the going to enforce car taxes in Belgium. If they are to be increased, this could result in a significant decrease in new cars registered, which in turn implies that people buy less cars, and in the long run this would be harmful for the industry (***). Nevertheless, the assessment of car taxes in Belgium schedueled for beginning of **** will be postponed by * months due to COVID-**. [***]
Source: ****
In contrast to the previous graph, the one above shows that the number of cars on the road in Belgium has increased. In other words, the fleet has expanded from *.** million in **** to *.** million in **** (***).
Athough the ...
2.4 COVID-19's impact on the industry
The global pandemic at its peak heavily diminished traffic. As of today in July, traffic is still not on par with levels before the pandemic. Consequently, the revenue of breakdown assistance has decreased accordingly. Below we dig deeper into what the potential consequences for the industry have been and what we can expect going forward.
In the first week during Belgium's shutdown around mid-March, traffic in Belgium decreased rapidly. In particular, the number of kilometers driven on Flemish highways diminished by **.*% for all passenger traffic compared to the period in March before the lockdown measures. [***]
Fleeteurope reports a decrease of **% in new car registered in Belgium. Together, these reasons could contribute to an even smaller fleet of cars which will have a negative impact on the car assitance industry.
However, some issues arising due to COVID-** could benefit the industry. Rtbf reports that according to the VAB mobility organisation car battery problems have increased rapidly. This stems from shorter distances travelled, cold nights, and the fact that immobility of vehicles has increased. Normally when a battery encounters problems, Belgians are advised to drive about ** kilometers at constant speed in order to recharge the battery. However, during the lockdown this was not ...
3 Market structure
3.1 Organisation of companies on the territory
In general, car assistance services can be divided into three segments:
Government and regional services Belgium is part of the EU. Thus, the citizens can benefit from the homogenous eCall system where dialing into this number will connect individuals to the closest breakdown service for no cost. Flemish authorities have introduced a feature labelled FAST (***). Within this framework, assistance is to arrive on site within ** minutes, whereby the incident is to be made visible for other drivers through a signalling vehicle. After this, the vehicle should be towed to safety and charged accordingly. The FAST system does not currently exist on the French-speaking side of the country, police services consult the SIABIS central file, managed by Datassur. This file contains the vehicles that benefit from assistance coverage and the name of the assistance company. If the immobilized vehicle is listed in SIABIS, the police will send a breakdown service to the assistance provider concerned. Price depends on the type and duration of the intervention (***); Towing insurance companies: Many individuals have an annual insurance from which they can benefit from services such as towing and replacement cars all over Europe. The company in question provides the full service package, and often they ...
3.2 Company activity
Source: ****
The Belgian market for vehicle assistance is highly fragmented; in **** there were around *,*** companies. Indeed, since **** the number of firms in Belgium has hoovered around *,***-*,***.
Most players are SMEs and local players who hosts garages and repair services.
In particular, GoldenPages lists *** companies in Belgium which offer towing at home in Belgium.
Source: ****
The number of employees in the industry has decreased by around *,*** people since ****. This trend is the opposite to that of number of firms which has increased in the last years. In ****, there were on average seven (***) employees per company which confirms the fact that most firms are smaller businesses.
4 Analysis of the offer
4.1 Road assistance services in Belgium
Vehicle assistance consists of repairing at the place of intervention (***)
Towing consists of evacuate the vehicle and transfer it from the place of intervention to another site .
The towing and breakdown service is mainly carried out by specialized breakdown service companies in highly urbanized areas. These professionals carry out the breakdown service, and if necessary the towing of the vehicle, in their own workshop or in an automobile repair company.
4.2 Price Analysis
Below is a price overview for companies in the car assistance insurance industry. Average price for accident/damage was €*,*** in ****. [***] To call towing services in case of breakdown on the street or highway, rtbf reports that the price is €*** (***) and €*** during the night.
Source: ****
*prices as of July ****.
4.3 The motor is driving costs
The cost of repairing a car involves costs that depend on the intervention performed:
Towing costs: depending on the distance covered to the garage; Additional services; Depending on the place of detention: road, expressway, motorway; The possible supply of automotive parts; The time spent at the place of detention as well as the time slot and day of the week.
Below we provide an overview of what drives a cost claim and hence what parts are the most expensive to repair (***).
Source: ****
The graph above shows the cost claims for new cars. In other words, this correlates to the most common issues encountered by vehicles measured through the reported issue to insurance.
Following this, we find that motor related issues are the most common errands, accounting for **.*% of claims. As we saw in section *.*, the following two issues are related to the fuel system (***).
Source: ****
For used cars the motor claims are even larger proportionally (***).
Overall, this data is interesting for insurance companies as it provides an idea of where claims stem from. It is also necessary for market players since in most cases the problems their clients are facing relate to the motor, after which the market players must ...
5 Rules and regulations
5.1 Regulation
Belgium regulation around towing services can be found under code-de-la-route.
Finally, Belgium answers under EU law as well. All guidelines can be found here.
6 Positioning of the actors
6.1 Segmentation
- AXA Insurance (Belgium)
- AG Insurance
- Europ-assistance
- Touring
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Breakdown assistance Belgium | Belgium
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