Collision repair industry volume in the US has grown substantially over the past several years as the economy has improved. With high employment, several years of strong new vehicle sales, record levels of vehicle miles travelled in the US, and higher accident frequency, the number of auto insurance claims and the dollar value of losses have increased substantially,
This has led to a reversal of the long-term decline trend in the number of repair facilities. Since 2010, when the number of independent collision repair facilities with payroll and OE dealer collision repair centres totalled 39 700, the number of facilities has grown slightly to 40 536 in 2017. These employer facilities – combined with nearly 80 000 individuals performing body repair as sole proprietors reported over $46.1bn in revenue in 2017. The growth in revenue wass predicted to continue in 2018 and 2019. Average repair costs are increasing above the rate of general inflation as newer vehicles, with considerable levels of embedded technology such as advance driver assistance systems (ADAS), have led to an increased average repair cost exceeding $3 000 for the first time in 2018 according to data from CCC information Services in its 2019 Crash Course report.
The largest challenge facing growing collision repair organisations is finding staff. The number of respondents to Collision Week’s quarterly survey of business conditions who report having jobs they have been unable to fill for more than one month remains at above average levels.
Larger shop organisations indicate that their spending on these repair capabilities will likely rival aluminium repair investment due to the larger number of new vehicles including these systems and the number of different systems in use by vehicle manufacturers.
This trend will continue as the voluntary agreement between vehicle manufacturers, the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS) seeks to have every new passenger vehicle equipped with the autonomous emergency braking (AEB) crash avoidance technology by 1 September 2022 as standard equipment.
Toyota remains the frontrunner in terms of the total number of vehicles produced with AEB. The automaker equipped 2.2 million (90%) of its 2.5 million vehicles with AEB. Nissan has the second-highest number produced with AEB -–1.1 million (78%) of 1.4 million vehicles. Honda is third highest with 980 000 (61%) of 1.6 million vehicles produced with AEB.
All sizes of the collision repair organisations report of concerns over their profit margins declining given the increased costs necessary to attract, train and retain qualified staff, coupled with the costs of adapting to new technologies that outpace growth in labour rates.