• 2016


In the early 1900s, there were hundreds of car manufacturers vying for a small but fast-growing marketplace. Over time, the industry matured and the auto industry consolidated to a handful of manufacturers that dominate the multi-billion-dollar global auto industry.

In recent years, a similar consolidation within the $40 billion collision repair industry began in North America. It’s been driven, in part, by big-money investors, an aging shop owner demographic and more high-tech vehicles on the road.

LaptopBody shops can expect a number of challenges on the horizon as well-fi nanced competitors take over local shops, and added pressure will come from insurers looking for more price concessions in exchange for referrals. There’s also an ongoing labor shortage in the industry and technology gaps most still need to overcome. All of which makes it easy to see why some shops might be seriously contemplating their futures.

According to collision industry veteran Darrell Amberson, former chair of the Automotive Service Association, the collision industry consolidation is inevitable and represents both opportunities and hazards for body shops. For starters, the last time the industry went through a consolidation, things didn’t always go as planned for some of the larger, multi-shop operations (MSOs).

“During the merger-mania of the 1990s, a lot of companies got into the market thinking they had a better business model and could see opportunities through processes. But there were several early failures and then the recession hit,” Amberson said.

Despite the early “crash and burn,” the current round of consolidation appears to be well-funded and gaining momentum. With hedge funds and private equity fi rms such as Blackstone Group LP and Carlyle Group pumping the better part of $1 billion onto the spending spree in the past few years, four major players – Service King, Caliber, ABRA and Boyd/Gerber – have amassed roughly 1,200 repair shops under their collective umbrellas.

This time, investors smell opportunity, having watched investment performance outpace other industries, Amberson said. Industry analysts predict the consolidation will continue for some time to come and could get ugly. Expect too, some consolidation among the major players themselves as each MSO moves from their traditional sandbox into competing markets.

“With 35,000 repair shops across the country, 1,200 is technically a small percentage, but it will continue to grow,” Amberson said. “Still, looking at markets like Denver, Chicago, you have all four major players there, so there’s likely to be some interesting chemistry there that could make pricing and hiring technicians a lot more competitive.”


Some experts say many smaller, body shops can leverage their unique advantages to capitalize on the relative weaknesses of MSOs. With most MSOs focused on volume and cost-cutting to keep the stream of insurance company referrals flowing, repair quality and customer service often get lost in the process.

Performance Collision in Atlanta, GA, is one shop positioning itself to fi ll the service gaps the large MSOs can’t.M_0009C0_RightManagedDealershp-Reouched

“Our focus has been to stay factory-authorized and continue to grow our business by adding new shops,” said Performance Collision Service Advisor Todd Brandon. “When it comes down to it, they (MSOs) are changing the industry, doing repairs cheaper and quicker, but they’re losing touch with whom they’re really working for.”

Scott Biggs, CEO of Assured Performance, a California-based auto service training and certification provider says some shops are constantly being pressured by insurers to cut costs, which can lead to quality and repair issues.

“Shops are looking at training and certification as a way to help them focus more on a proper and safe repair, not just a cheap repair,” Biggs said. FCA US LLC was the first domestic O.E. to offer body shop certification and today, leads the industry with over 1,400 certified shops.

With or without certification, body shops will continue to face the pressure of the MSOs for some time. With the technology challenges and labor shortages still unresolved, many are already positioning themselves as takeover targets since the industry average age of shop owners now hovers near retirement.

“I think it’s going to become tougher and tougher, not just for the smaller, body shops but for the consolidators as well,” Amberson said. “With all the technology, all the exotic materials, everyone will be relying on the factory more than ever. How all of this will affect body shops in the long haul is anybody’s guess. One thing is certain, change is underway and those who roll with the changes have the best shot at survival.


As an option for body shops to compete in the consolidating collision industry, factory certification has become a differentiator for shops to market quality and performance in an age of volume-conscious MSOs.

■ Improves consumer focus

■ Ensures technical capability

■ Marketing tool and support

■ Increases value of business

■ FCA US among leading certifi ers

■ Supports technical training

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