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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 33,000 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 about 8 workers, and generates just over $1 million annually.

    • The auto body shop industry consists of about 33,000 firms that employ about 250,000 workers and generate almost $40 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 ABRA/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
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                May 6, 2022 - Federal Right to Repair Legislation Pending
                                • Federal legislation introduced in Congress would “end manufacturers’ monopoly on vehicle repair and maintenance and allow Americans the freedom to choose where to repair their vehicles," according to its author US Representative Bobby L. Rush (D-Ill.). H.R. 6570, known as the REPAIR Act, is meant to ensure that vehicle owners and independent auto body shops will have equal access to necessary vehicle repair and maintenance tools and data as automakers’ dealerships and would level the playing field between independent auto repair and body shops and dealerships and spur competition, Reuters reports. The bill would require all tools and equipment, wireless transmission of repair and diagnostic data and access to on-board diagnostic systems needed for repairs be made available to the independent repair industry.
                                • Reckless driving, including speeding, red-light running, and driving on highway shoulders, is increasing, reversing a decades-long trend in the decline of vehicle accidents, according to WHYY News. Incidents of road rage, which can result in vehicle damage, are also up. Authorities cite drivers’ anxiety levels, larger vehicles, and fraying social norms brought on by the pandemic, as potential causes of the surge in reckless driving, which has resulted in more collisions and pedestrian deaths, The New York Times reports. While the pandemic led to fewer drivers on the road and a reduction in miles driven, research from the AAA Foundation for Traffic Safety found that higher-risk motorists accounted for a greater share of drivers during the pandemic than before it. Moreover, distracted driving—a growing problem that predated the pandemic and is the #1 cause of car accidents—is also getting worse as motorists, absorbed by mobile devices or lulled into complacency by advances in safety technology and automation, take their eyes off the road.
                                • Body shops are getting paid more often for labor and supplies related to masking – a step often needed to prep a vehicle or panel for paint. Body shops are billing more often for masking and major insurers are paying more often, according to a new survey by CRASH Network. Today, about 45% of shops are “always paid” or “paid most of the time” for masking, up from 24% in 2015. Conversely, about 20% of shops reported never charging for the service and materials, which turns out to be a lost revenue opportunity. “It is clear from the results of these surveys that whether or not a repair facility is reimbursed for a particular item depends, to a certain degree, on whether or not the shop negotiates for it,” states Mike Anderson of Collision Advice.
                                • The 2022 grading of auto insurers on how well they work with the industry to ensure quality repairs and customer service was revealing. Of 90 insurers, only 32 received a B or higher and none of the top 10 largest received higher than a C+, according to Fender Bender. Insurers posting the best scores were North Carolina Farm Bureau (A+) and Chubb (A-); same as in 2021 and 2020.
                                • A recent survey of auto body shop owners by Fender Bender finds that 45% are over 60 years old and only 6% are under 40. About 47% have worked in the collision repair industry for 40 years or more, and 42% became shop owners when they were 20-29 years old.
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