Auto Body Shops NAICS 811121

Jan 20, 2026 - Auto Body Industry Expects an M&A Surge in 2026

• After a slowdown in 2025, the auto body repair industry is poised for a major consolidation surge in 2026, driven by rebounding economic conditions, normalized collision sales, and renewed investor confidence. Large consolidators are preparing to reaccelerate acquisitions, fueled by public market activity, private equity interest, and major transactions such as Gerber Collision & Glass’s acquisition of Joe Hudson’s Collision Centers. With collision revenues stabilizing after pandemic-era distortions and inflation pushing up repair costs, industry leaders expect growth to return quickly. More shop owners are also expected to sell due to fatigue, retirement pressures, and rising operational complexity. While valuations may be more restrained than in the 2022-2024 boom, deal activity is forecast to climb sharply, with 2026 shaping up to be a breakout year for mergers, acquisitions, and regional roll-ups.
• Vehicle calibrations now appear in 35% of collision repair estimates, according to CCC Intelligent Solutions, reflecting rapidly rising complexity in modern vehicles due to embedded electronics and driver-assistance systems). The trend is reshaping repair work as diagnostics and calibrations become routine rather than specialized tasks. At the same time, total loss frequency (vehicles that can’t be repaired) is set to end 2025 at about 22%, which would break 2024’s already record year. Fewer cars are entering the repair stream, but those that do require more intricate procedures, specialized workflows, and longer labor times, putting pressure on collision shops and insurers alike. These shifts stem from both the evolving vehicle mix (including more hybrids and EVs) and broader market dynamics such as used-car values, parts supply, and insurer cost/repair decisions.

• Collision repair shops are increasingly turning to AI to make their operations more efficient and profitable. For example, after a crash, only about 57% of interested customers actually receive an estimate, and shops typically convert just 56% of those estimates into jobs, per Autobody News. AI can help close that gap by automating follow-ups and reminders. Many shops, around 91%, don’t follow up on written estimates at all, leaving potential revenue on the table. Customer referrals are also extremely low, with only 1.56% of repaired customers referring someone else to the same shop, which is another area where AI can make a difference by nurturing relationships. Beyond sales, AI dramatically reduces labor: tasks that once took 4 hours per customer can now take as little as 30 seconds, freeing staff to focus on higher-value work.
• Increased passenger vehicle weights and the further integration of automated safety control systems is having an impact on how the auto body repair industry operates, according to industry experts at a recent seminar hosted by the Collision Industry Electronic Commerce Association. Weights are increasing in cars, trucks, and SUVs and added heft generates more force in crashes and causes more damage. The seminar noted a 1995 Ford Ranger weighed 3,200 pounds, while a 2025 model of the same truck weighs 4,000 pounds. Most of the weight gains are attributed mainly to luxury features such as all-wheel drivetrains, turbocharged autos with higher speed, and EVs, which are significantly heavier than gas-powered vehicles. Technology features like automatic emergency braking systems are not reducing the number of collisions, but it is making them less dangerous yet more costly to repair.