Auto Body Shops
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 31,700 auto body shops in the US provide structural and interior repair, paint, and customization services for vehicles, such as passenger cars, trucks, vans, and trailer bodies. Major customers are insurers, vehicle owners, and auto dealerships. Some auto body shops are members of insurers’ Direct Repair Programs (DRP) and receive referrals from insurers whose clients have filed damage claims.
Increasing Technological Complexity
The technological complexity of modern vehicles creates operational challenges for body shops.
Collision Claims Stabilize, Severity Rises
While the incidence of collision damage insurance claims has remained steady over the last few years, the severity of claims has risen.
Industry size & Structure
The average auto body shop operates out of a single location, employs less than 9 workers, and generates $1.7 million annually.
- The auto body shop industry consists of about 31,700 firms that employ about 261,000 workers and generate $54.4 billion annually.
- The industry is highly fragmented; the top 50 companies account for 20% of industry revenue.
- The industry includes multiple location operators (MLO)/multiple shop operators (MSO)/chains, franchises, and independent operators. In 2019, independent shops accounted for 54.1% of total body work sales, while chains and franchises accounted for 26.6% (car dealerships accounted for the remainder).
- Large firms include Caliber Collision, Gerber Collision & Glass, and Service King. Large franchises include Fix Auto USA and Driven Brands (CARSTAR, Maaco).
Industry Forecast
Auto Body Shops Industry Growth
Recent Developments
Nov 17, 2024 - Employment Up, Labor Costs Flat
- Employment by auto body shops increased 1.7% in September 2024 compared to a year ago while wages at auto body and glass repair shops were flat, according to the Bureau of Labor Statistics (BLS). Average wages for nonsupervisory employees in the industry were $26.54 per hour in September 2024. Meanwhile, prices paid by consumers for auto body work and auto repairs rose in October 2024. Prices for motor vehicle body work services were 0.4% higher in October 2024 compared to the previous year, according to Consumer Price Index data. Prices for motor vehicle repair services were 7.3% higher in October 2024 compared to a year ago.
- According to a new report from Mitchell International in Repairer Driven News, electric vehicles are most commonly involved in front-end collisions and are 40% costlier than those involving rear-end impacts. Mitchell International’s Q3 “Plugged-In: EV Collision Insights” showed that internal combustion engines (ICE) tend to have a higher frequency of front-end impact (35.9%) compared to battery electric vehicles (25.8%). BEV’s are more likely to sustain rear-end damage (35.9%) than ICE alternatives (27%). The report states the difference can be attributed to several major factors including newer average model year (likely with comprehensive, front-crash avoidance technologies) and different braking dynamics for BEVs when in single-pedal mode, which may result in more rapid deceleration than expected. The average claim severity in the US was $5,560 for plug-in for BEVs, $5,229 for plug-in hybrids, and $4,741 for ICE vehicles. According to Mitchell’s Ryan Mandell, “There’s a direct correlation between the primary point of impact and claims severity. Even though overall severity remains higher for BEVs than for ICE vehicles, understanding these point-of-impact dynamics can help auto insurers better assess risk, manage claims, and assist policyholders.”
- The US auto body shops industry is projected to grow at a CAGR of 4.5% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is comparable to the overall economy‘s anticipated growth. The report noted that consumer confidence is expected to improve in the forecast period, which bodes well for the various service industries. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest levels, and elevated price levels. Price growth, however, is diminishing and likely to stabilize soon near intended rates. The report noted that auto supply challenges during and post pandemic have boosted consumer demand for the auto repair industry. “These constraints force many to maintain and repair vehicles and other equipment that otherwise might have been replaced,” per the report.
- Drivers drove 2.7 trillion miles in 2023, which is in line with recent years, with nearly 40% of driving trips made in vehicles older than 10 years, according to the recently released 2023 American Driving Survey from the AAA Foundation for Traffic Safety. The report stated that the share of older cars on the roads is a concern. “These vehicles often lack modern safety features and may be in poorer mechanical condition, potentially contributing to a higher risk of crashes,” it said. The number of driving trips taken per day averaged less than 2.5 per day with a duration of just over an hour and totaled 30 miles. Most driving trips taken in 2023 were to run errands (31%) and for work commutes (27%).
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