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
Oct 18, 2024 - Prices Fall for Vehicle Body Work
- Prices for motor vehicle body work services were 0.3% lower in September 2024 compared to the previous year, according to Consumer Price Index data from the Bureau of Labor Statistics (BLS). Prices for motor vehicle repair services were 6% higher in September 2024 compared to a year ago. Total revenue for automotive repair and maintenance companies was $41.6 billion in Q1 2024, a 2.2% decrease compared to a year ago and a 0.5% decline from a year ago, according to the Census Bureau. Consumer spending, a key indicator for the industry, grew 2.6% in June 2024 compared to a year ago and increased 0.2% from the previous month, according to the Bureau of Economic Analysis. Employment by auto body shops increased 3.2% in July 2024 compared to a year ago while wages at auto body and glass repair shops fell 1.2%, per the BLS.
- 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%).
- Quarterly length of rental (LOR) data released by Enterprise in Autobody News showed a decline in Q2 2024 from Q2 2023, but was higher than pre-pandemic levels. The LOR for collision-related rentals was 16 days, a decline of 1.4 days from a year ago. Auto body shops also saw a decrease in their average scheduling backlog, dropping from 5.8 weeks in Q2 2023 to 2.7 weeks in Q2 2024. According to John Yoswick, an editor of CRASH Network quoted in the article, “Backlogs always drop from Q1 to Q2 each year, typically by two or three days. This year, however, backlog plummeted by nearly nine days in the second quarter -- the largest decline in backlog since the 10-day drop in the second quarter of 2020, at the start of the pandemic lockdowns.” Yoswick noted that successful hiring may have contributed to shops working through their backlog more quickly than in recent years.
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