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 31,800 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 10 workers, and generates $1.4 million annually.
- The auto body shop industry consists of about 31,800 firms that employ about 248,700 workers and generate $45 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, 2023 - Employment, Sales Higher
- Sales for the automotive repair and maintenance industry were mostly flat in the second quarter compared to the first quarter and up over 3% from a year ago, as consumer spending grew modestly. Total vehicle miles traveled on all roads generally grew throughout 2023, increasing toward the summer travel months and trending higher than in 2022. Employment for auto body repair shops increased in Q3 compared to a year ago, and employment costs were up due to an uptick in wages year over year. The increase in employment is welcome news in the industry, which is facing a nationwide shortage of auto mechanics.
- The United Auto Workers (UAW) union has reached tentative agreements with General Motors, Ford, and Stellantis, according to Repairer Driven News. The deals, which are in the process of being ratified by union members, will end a “stand-up” strike method targeting specific plants that began in mid-September. Workers are expected to return to work during the ratification process. The agreements are expected to improve wages and job security protections for union workers. The union represents nearly 150,000 autoworkers, and 46,000 employees went on strike at the peak of the strike. Some auto body shops reported delays in obtaining needed auto parts during the strikes, adding a week or two to repair times.
- A new study about advanced driver assistance systems (ADAS) projects that more than half of US vehicles will come equipped with a full ADAS suite by 2050, according to Repairer Driven News. The study, sponsored by the AAA Foundation for Traffic Safety, found that ADAS technologies currently available to US drivers are anticipated to prevent 37 million crashes, 14 million injuries, and nearly 250,000 deaths. That amounts to 16% of crashes and injuries and 22% of fatalities that would otherwise occur on the US roads without the ADAS features. ADAS features include blind spot monitoring, lane departure, forward collision monitoring, pedestrian detection, lane keeping assistance, automatic emergency braking, adaptive cruise control, and emergency steering assistance. Auto body shops that repair ADAS systems must invest in the tools, training, and space to accommodate the specialized repair across all makes and models.
- An older car population and the increasing complexity of new vehicle repairs are expected to help drive growth in the US auto body shop industry, which is projected to rise at a nearly 5% CAGR from 2022 to 2027, according to an Inforum forecast. This rate is faster than the growth of the overall economy. Employment levels in the industry have increased year to date, a good sign for the staffing-strapped industry. Employment costs have remained relatively stable, as wages have stayed mostly flat in 2023.
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