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  Special Feature

A Picture of the Service and Repair Industry

2008 'How's your Business?' Survey Results

Collision

Business Profile || Owner Profile || Staff Profile || Sales ||
Customer Profile || Marketing and Advertising

An Analysis of the Collision Sector
by Denise Caspersen

As 2008 comes to a close, the collision industry has not been immune to the effects of the economy over the past year. Pressures from insurers and consumers to contain costs while improving cycle time, increasing "touch time," producing high-quality repairs on technologically advancing vehicles continues to persist and zero in on the financial bottom line of the collision repair facility.

Steering - either blatant or passive - continues to be an issue for collision repairers and consumers. In 2008, ASA posted an online industry insurer complaint form to be completed by shops and consumers that feel they have experienced an instance of steering. The electronic form, found on the ASA legislative Web site, www.TakingTheHill.com, files a complaint with the designated state body, and if you request it, will notify ASA of the complaint. The filing of complaints is an essential element of providing factual data to state regulators.

In the next few years with the 111th Congress, ASA will have an opportunity to address steering, paint material caps, labor rates and other insurer-related items through federal insurance regulation. This will require that federal regulation of the insurance industry, currently being addressed by Congress to cover life insurance, will also include property and casualty insurance. ASA will be involved in an active campaign to include property and casualty insurance. To accomplish this, we will need a strong voice from collision repairers in the form of letters, e-mails and contacts with state-appointed federal legislatures. By signing up to receive legislative updates at www.TakingTheHill.com, your opinion can easily be added to the voice for federal insurance regulation with the click of a few buttons. Your participation is imperative in accomplishing this goal and removing the frictions of steering, labor rate controls, caps on paint materials and other issues.

While ASA works toward federal regulation of the insurance industry, the ASA collision operations committee volunteer leadership is having conversations with the major insurers to better the relationship and business agreements between insurers and collision business professionals.

In 2008, ASA provided Progressive Insurance a large amount of documentation supporting the additional steps required to blend a panel and receive full payment of clear. In May 2008, Progressive announced a major policy change and began paying for full clear on a blended panel.

In July, Keystone created a price change on aftermarket parts, rounding up the cost price as a supplement to a fuel surcharge but not adjusting the list price. This price change created a profit loss for collision businesses due to shops' inability to bill customers for the price increase. After hearing from the ASA leadership, this price change was quickly changed back.

2008 has been a year of challenges for the independent collision repair professional. ASA takes those challenges seriously and strives for solutions on behalf of the membership. 2009 will be just as challenging, and our successes will be dependent on the unity of our voices.

Denise Caspersen is ASA's Collision Division manager. She can be reached at denisec@ASAshop.org.


With 2008 coming to a close, the Automotive Service Association has found that there has been no growth in the collision industry from 2007 to 2008 in the number of shops, which total an estimated 36,805. ASA is also estimating a slight increase in employees from 227,178 in 2007 to 227,300 in 2008. These collision specialists are responsible for fixing the estimated 45 million vehicles involved in collisions in 2008 that result in repairs.

ASA is estimating annual sales for the independent side of the collision industry to be a conservative $27 billion. This figure is based on the actual annual sales listed by the U.S. Census Bureau for 2006. These figures do not include the approximately 7,613 franchised dealerships with body shops generating an estimated $6 billion in 2007, according to the National Automobile Dealership Association.

Business Profile

 

 

 

 

 

 

 

 

 

 

 

The number of service bays and the size of the average facility are similar to 2007, with current results showing 18 bays and approximately 12,628 total square feet. Square footage averages include 1,485 of office space, 11,133 of shop space, and the remaining space is used for parts and storage.

The independent collision repair business continues to be family owned (87 percent), with 49 percent of businesses being in operation more than 25 years. Seven percent have been in operation one to five years. Sixteen percent have been in operation six to 10 years; 5 percent have been in business 11 to 15 years; and 10 percent have been in operation 16 to 20 years. Twelve percent of shops have been in business 21 to 25 years. Seventeen percent have operated 26 to 30 years; 6 percent have operated for 31 to 35 years; 7 percent have been in business for 36-40 years and 20 percent have operated their business for 41 or more years.

 

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Owner Profile

 

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Staff Profile

There are various levels of frame or body technicians employed at collision shops. For example, the apprentice technician has two years or less of experience, the entry-level technician has two to four years of experience and the most common employee is the experienced technician with five or more years of experience. Ninety-nine percent of ASA collision shops employ four experienced technicians, each earning nearly $57,000 annually.


 

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Sales

In 2008, 43 percent of collision shops said they experienced an average 13 percent increase in sales. Thirty-eight percent of shops cited an average 16 percent decrease in sales compared to last year. When comparing profits in 2007 to profits in 2008, 32 percent saw an increase while 55 percent saw a decrease and 13 percent saw no change.

 

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Customer Profile

 

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Marketing/Advertising

 

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