Consolidators: Classic Collision Adds Third Location in Minnesota
Some 47 percent of collision repairers pointed to the lack of skilled repair technicians as their most pressing challenge in 2016.
Nearly half of the collision repair shops responding to the Automotive Service Association’s (ASA) 2016 “How’s Your Business?” survey indicated that the ongoing technician shortage is their biggest challenge.
Some 47 percent of the survey respondents – the vast majority of whom represent family-owned, independent shops – pointed to the lack of skilled repair technicians as their most pressing challenge in 2016, while one-third (33 percent) of collision repairers said that “insurer issues” are their biggest challenge.
The ASA survey suggests that many collision repair facilities had a down year: Nearly half (47 percent) of collision repairers said their year-over-year profits dropped in 2016, while 41 percent said they experienced a drop in repair orders per month. However, 41 percent said their ROs per month increased in 2016.
Using figures from the U.S. Bureau of Labor Statistics, the ASA estimates that the total number of collision repair locations in the United States jumped from 33,809 in 2014 to 34,488 in 2016.
To add some color to the data, the ASA included comments from survey respondents. Regarding the technician shortage, one repairer asserted that the problem is “more like a passion-for-our-business shortage.”
“I do not see the younger technicians with a five-year or 10-year plan,” the repairer said.
Another repairer pointed to the need for “new blood in our industry.”
“If no new blood is coming in, profits will get lower because of pay scales,” the survey respondent said.
Among other comments, repairers said:
- “The intrusion of insurance companies trying to set industry standards and their control of rates through their DRPs are killing independent shops. Costs of training, equipment, materials and insurance keep rising, while rates stay the same.”
- “Insurance compensation for needed repairs is insufficient to keep qualified technicians in our industry.”
- “Coaching and mentoring is the key to success. You should have one, and you should be one.”
Some key demographics were largely unchanged from the association’s last survey in 2014. For example, the average age of respondents to the 2016 survey was 53 (compared to 55 in 2014), while the average number of years in the automotive industry was 33 (compared to 34 in 2014).
The ASA updated the 2016 survey with new questions on topics such as training, with 47 percent of collision repairers indicating that their technicians receive an average of five to 10 hours of annual training.
“Keeping up with the changes in the automotive service and collision repair industries is a full-time job these days,” said Tony Molla, ASA’s vice president. “The latest survey results only confirm that we are in a dynamic, technology-driven cycle that is changing the way business models are evolving, while reinforcing the need for qualified talent to continue building on the success our member shops report.”