U.S. Roadside Assistance Market Size, Share & COVID-19 Impact Analysis, By Providers (Auto Manufacturers, Motor Insurance, Independent Warranty, Automotive Clubs), By Vehicle Type (Passenger cars and Commercial Vehicles), By Service (Towing, Tire Replacement, Fuel Delivery, Others), and Country Forecasts, 2022-2029

The U.S. roadside assistance market size was valued at USD 5.88 billion in 2021. The market is projected to grow from USD 5.99 billion in 2022 to USD 7.73 billion by 2029, exhibiting a CAGR of 3.71% during the forecast period. The impact of the COVID-19 pandemic has been unprecedented and staggering, with roadside assistance experiencing lower-than-anticipated demand across all U.S. compared to pre-pandemic levels. Based on our analysis, U.S. roadside assistance market exhibited a growth of 1.6% in 2020 as compared to 2019.

As global automotive sales are increasing, so is the demand for roadside vehicle assistance. Therefore, to cater to the increasing demand for this service, the automakers are offering 24*7 roadside assistance to their customers. This assists automakers in keeping up with the competition and attracting new customers through marketing. The service provides assistance to the customer in the event of the breakdown or crashing of the vehicle. Through roadside vehicle assistance, the company offers onsite support, including mechanical and electrical repair, along with usual roadside problems such as dead batteries, flat tires, and others.

Rising road safety concerns along with the improved connectivity in the new generation vehicles are some of the factors that are driving the demand for vehicle assistance services. Additionally, roadside vehicle assistance services provided by insurers as an add-on service are driving the market growth. Moreover, an increasing number of road accidents across the U.S is also likely to accelerate the market growth during the forecast period.

COVID-19 IMPACT

Dropped Automotive Sales during COVID-19 to Hamper Market Growth

The outbreak of novel coronavirus has negatively impacted the U.S. roadside assistance market share. The market growth has slowed down due to factors such as closed manufacturing units during a lockdown, economic crisis, unavailability of manpower, decreased market demand, disruption in the supply chain, and others. Furthermore, the National Highway Traffic Safety Administration in the U.S. continued researching traffic safety during the COVID-19 pandemic. This work is a priority due to the increase in the number of crashes before and during the COVID-19 pandemic to take countermeasures for the same. 

Additionally, there was the unavailability of human resources amidst the COVID-19 pandemic. Many laborers switched to alternative jobs owing to the risk factor involved in the roadside vehicle assistance service. According to the company Agero, demand for vehicle drivers increased rapidly in sectors such as ride-sharing, Uber, and delivery services. These companies offer better wages with safe working conditions. Due to this, many service providers and businesses had to operate with a limited workforce during the pandemic.

During the COVID-19 pandemic, there has been a spike in the commercial insurance premium for the towing and recovery business. According to an article by the Insurance Journal,  Chip Thompson, President, and CEO of American Transportation Insurance Group, said that the current tow trucks market has been hit very hard and very fast; it would have been 20 percent or 30 percent increases (in difficult times), but we are seeing 100 percent to 150 percent increases on accounts with no claims”. Due to such hefty insurance premiums, many roadside providers were forced to close their operations during the COVID-19 pandemic.

LATEST TRENDS

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Automakers’ Focus on Upgrading Roadside Assistance Services to Boost the Market Growth

Upgradation of existing road assistance services is an ongoing trend in the market. Nearly all the leading players are focused on introducing new road assistance services to grab customer attention and diversify their customer base accordingly. For instance, in July 2019, Tesla announced the addition of roadside assistance integration to the mobile application. The company started rolling out an update that enables customers to request roadside assistance through Tesla’s mobile app.

These players are also focused on utilizing advanced technologies to improve vehicle connectivity to further make their road assistance services easily accessible to customers. This is anticipated to improve customer convenience and is likely to increase the number of customers preferring to opt for this assistance service. Similarly, with the utilization of various telematics devices in automotive to gather real-time connected vehicle data, roadside assistance providers are leveling up their services. Furthermore, by leveraging the vehicle data, the companies are upgrading their service offering and improving the response time and efficiency. Therefore, this ongoing trend for the adoption of advanced technologies for the upgradation of existing roadside assistance services along with rising adoption of connectivity solutions is likely to drive market growth during the forecast period.

DRIVING FACTORS

 Increasing Electric Vehicle Sales to Boost the Market Growth

The electric vehicle market in the U.S. region has seen drastic growth in recent years. In the U.S., EV sales rose by nearly 100% year-on-year in 2021. The Biden government has set a target of 50% of EV sales by 2030. Moreover, According to the Biden Government, the U.S. will provide USD 7.5 billion to build 0.5 million public EV charging stations. And expect that the battery electric vehicle (BEV) will account for nearly 30% market share in U.S. passenger vehicle sales by 2030.

Furthermore, the increasing sales of electric & hybrid propulsion type vehicles will need roadside vehicle assistance service providers/ vendors to upgrade their technologies, leading to the growth in the demand for roadside vehicle assistance during the forecast period. In August 2022, as per a report by consumer insights and data analytics provider J.D. Power, despite the increase in public charging stations in operation, customer’s response to public Level 2 charging declined to 633 from 643 in 2021 (on a 1,000-point scale)  while that with the speedier DC fast charger segment remains flat at 674. Such factors may become a critical component in helping to assuage consumers' concerns over electric vehicle adoption, further propelling the U.S. roadside assistance market growth.

Increase in Demand for Roadside Vehicle Assistance Systems will Drive Market Growth

Car breakdowns such as. Worn tires, bursts, and worn brake lines lead to great demand for roadside vehicle assistance. According to the Bureau of Labor Statistics, in 2019, the average age of light vehicles in operation (VIO) in the (U.S.) the U.S. has risen to 11.2 years; compared to 2004 to 2009, the average life of light vehicles in the U.S. rose by 3.7 percent and in the year 2010 and 2016 the rise was 11.6 percent. Moreover, in the year 2021, the average age of a car on U.S. roads rose to 12.1 from 11.9 in 2020.

Due to vehicle aging, there is an increase in demand for roadside vehicle assistance systems in the united state region. Furthermore, According to the U.S. Department of Transportation and the National Highway Traffic Safety Administration, there were 6,734,000 motor vehicle accidents in 2018; hence when it comes to emergency assistance, towing is the most popular service. For instance, according to Agero, in the U.S., around 65-70 million vehicle breakdown occurs each year, which states the importance/demand for the service. Thus, increasing vehicle sales and analyzing emergency benefits of service, 1 out of 3 customers/drivers in the U.S. have roadside coverage to resolve the situation, which is further expected to create a demand for the market.

RESTRAINING FACTORS

Shortage of Labor in Roadside Vehicle Assistance Workforce Is A Key Restraint For Market

According to a recent survey by the International Towing and Recovery Museum, one death from being struck outside of a car on the side of the road occurs every six days, or about 60 tow truck workers each year. Given the risk and stress of this role, it is becoming more and more challenging to retain and recruit light-duty tow truck drivers for roadside vehicle assistance service providers. According to the Bureau of Labor Statistics 2021, Over the past three years, payroll for motor vehicle towing has increased an average of 9.12% per annum, more than double the national rate.

Furthermore, in July 2022, a car-towing company named “Freeway” in California took up to three hours to rescue stranded motorists because it struggled with a staff shortage. The company had 70 employees before the pandemic but has only 46, despite having availability for 100 employees or more. Furthermore, many workers quit their jobs during the Great Resignation in protest of low wages, poor benefits, and unsatisfactory working conditions. An increase in insurance premiums also creates a gap between customers and insurance companies. Thus, all such factors are hindering the overall market growth.

SEGMENTATION

By Vehicle Type Analysis

Rising Adoption of Roadside Assistance Services from Credit Card & Motor Insurance Companies Will Propel Passenger Cars Segment Growth

The passenger car segment held the largest market share in 2021 and is anticipated to witness the fastest CAGR of nearly 3.89% during the forecast period. The growth in the segment is owing to the adoption of roadside vehicle assistance services by credit card companies, moto insurance companies for passenger cars, and additional coverage of services such as fuel delivery, tire replacement, and others.

The commercial car segment accounted for a market size of USD 1.75 billion in 2021; it is expected to grow at a CAGR of 3.29% over the forecast period. The segment accounted for a market share of 29.8% during the year 2021. The commercial vehicle segment is projected to exhibit a significant CAGR during the forecast period. Factors such as increased logistics and trucking industry and demand for roadside vehicle assistance will drive the growth of this segment.

By Service Analysis

Changing Climate and Rising Accident Cases in the U.S. have Registered a Rising Service Demand for Towing Services

The towing segment accounted for a market size of USD 1.80 billion in 2021; it is expected to reach USD 2.49 billion by 2029 at a CAGR of 4.38% over the forecast period. The growth in the segment is owing to the increase in demand for towing services by roadside service providers. Moreover, leading service providers reported 5000 calls for towing service in a single day.

The growth tire replacement segment is owing to the automobile companies and other insurance providers give tire replacement as a add-on service in the package. Furthermore, according to the department of transportation, in the U.S. 664 motor vehicle fatalities in 2020 were due to tire related crashes.

The increase in the demand is owing to the rise in various technologies such as mobile fuel delivery. A U.S. based startup-Booster has gained a lot of attention due to its mobile fuel delivery facility for service fleet operators, corporate clients and residential customers and others.

The other segment accounted for a considerable market share. Other segments include lockout services, battery boost, stolen vehicle assistance, and jump start. The growth in the segment is due to many companies giving add-on and free services related to such services to get a competitive advantage over other market players.

By Providers Analysis

Increasing Number of Roadside Assistance Service Providing Insurers to Propel the Segment Growth

The auto manufacturers segment is mainly attributed to the motor insurance independent warranty services and customer post-sales assistance. The auto manufacturers segment accounted for a market size of USD 2.61 billion in 2021; it is expected to grow at a CAGR of 3.60% over the forecast period. The auto manufacturer segment is the largest growing segment during the forecast period owing to their after-sales and warranty services. Moreover, companies such as Honda, Toyota, and General Motors provide roadside vehicle assistance to customers with various add-on services.

Companies such as Honda offer 24/7 roadside vehicle assistance and mechanic service to customers whose vehicles are under warranty. Honda offers 24-hour emergency road service in the U.S., Puerto Rico, and Canada throughout your three-year/36,000-mile limited warranty.

The auto clubs segment accounted for a market size of USD 1.57 billion in 2021; it is expected to grow at a growth rate of 4.02% over the forecast period. The auto clubs segment is anticipated to rise significantly during the forecast period owing to the demand for inexpensive roadside vehicle assistance service packages. Which further offers incentives/discounts along with travel and rental service benefits.

KEY INDUSTRY PLAYERS

Focus on Diversifying Vehicle Assistance Services to Drive Competition

The U.S. roadside assistance market is consolidated, with major players operating in the industry. It is observed that most of the domestic players in the U.S. have diverse product portfolios with a focus on product upgradation and new product launches. Moreover, players are also focused on strengthening the dealerships and store networks to cater to the rapidly increasing demand for roadside vehicle assistance across the U.S.

Exponential Demand for Roadside Subscriptions to Drive the Allstate Insurance Company Growth 

Allstate Insurance Company is one of the leading players in the market. After the initial pandemic-induced lockdown, Allstate insurance company witnessed an exponential demand for roadside assistance subscriptions which continued in 2021. The company used this surge in need to optimize its operations. Improvements include expansion of the customer service team and 24/7 service. Moreover, the company became more focused on improving logistics and roadside vehicle assistance services. 

LIST OF KEY COMPANIES PROFILED:

• Agero, Inc. (U.S.)


• Allstate Insurance Company (U.S.)


• Best Roadside Service, LLC (U.S.)


• Better World Club (U.S.)


• CARCHEX (Maryland, U.S.)


• Good Sams Enterprise (U.S.)


• OnStar (U.S.)


• Progressive Casualty Insurance Company (U.S.)


• State Farm Mutual Automobile Insurance Company (U.S.)


• USAA (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• In June 2022, Agero, Inc., a leading B2B software and service company was included in the Forbes best midsize employers list year 2022. Ranking number 264 in the nation based on employee survey feedback.


• In November 2021, The Allstate insurance company announced to sell its campus in Northbrook, Illinois, to Dermody Properties for approximately USD 232 million. The transaction also intends to lower real estate costs and advance Allstate's multi-year Transformative Growth plan, which aims to grow the market share for personal property-liability insurance by creating a low-cost insurer with a wide distribution.


• In September 2021, General Motors planned to expand its OnStar Guardian emergency services from an in-vehicle feature and phone-based app to at-home with Amazon Alexa.


• In October 2021, Agero Inc. Introduced new conversational artificial intelligence (AI) tools and enhancements that help consumers access the breakdown assistance they need more efficiently while providing a more transparent service experience.


• In May 2022, Towing El Paso, one of the leading towing service providers, announced to launch of an extension of their roadside assistance El Paso services. The company has decided to bolster its tow truck in across El Paso, Texas, by training its mechanics and technicians to deal with a diverse range of roadside assistance issues.

REPORT COVERAGE

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The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, end-users, design, and technology. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.

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