CARSTAR Leadership Discusses Consolidation, MSO Trend - BodyShop Business
Connect with us


Close Sidebar Panel Open Sidebar Panel


CARSTAR Leadership Discusses Consolidation, MSO Trend


Jason Stahl has 28 years of experience as an editor, and has been editor of BodyShop Business for the past 16 years. He currently is a gold pin member of the Collision Industry Conference. Jason, who hails from Cleveland, Ohio, earned a bachelor of arts degree in English from John Carroll University and started his career in journalism at a weekly newspaper, doing everything from delivering newspapers to selling advertising space to writing articles.

After wrapping up their annual conference Sept. 24-27 in
Seattle, Wash., that hosted nearly 400 insurers, vendors and franchisees, the
leadership of CARSTAR stated in a recent teleconference their belief that
consolidation and the MSO trends in the collision repair industry remain

Click Here to Read More

"Industry consolidation is continuing, with MSOs
like us adding to their networks while independents continue to shrink,"
said CARSTAR CEO David Byers. "As the largest MSO in North America, we
feel we’re going to disproportionately benefit from this consolidation."

CARSTAR last year stated its belief that 4,000 to 5,000
shops closed in 2010, and senior marketing executive Bill Garoutte said that they
believe the closing rate hasn’t changed.

"It has maybe accelerated slightly because of the
frequency numbers not going up," said Garoutte. "There is not as much
work out there, and there is a move toward the MSO model in the insurance


Byers said insurance companies are increasingly favoring
doing business with MSOs and want several things:

• Concentrated scale

• Self-management

• Outstanding KPIs

• Single point of contact

"They want to work with fewer providers, they want
to give us metrics to hit and let us manage hitting them, and they want the
ability to call one person for their needs, not 400 individual locations,"
Byers said. "We believe we have the best cycle time, severity and length-of-rental KPIs in the industry, and we believe this is due in large part to us
being owner-operators, where it’s our own blood, sweat and tears in the
business versus the company guy who works 9 to 5."


To track those KPIs, CARSTAR is continuing its rollout of
a new customized management system powered by Mitchell that will allow
real-time reporting of KPIs to insurers, franchisees and CARSTAR Corporate on
an on-demand basis.

CARSTAR has also boosted its business development staff
with an eye toward opening 40 to 50 new stores in 2012. That number, CARSTAR
said, is two to three times what it has been over the last several years due to
a stronger focus on this area and a doubling of their business development

Even though CARSTAR said its same-store sales on average
are double what the rest of the industry is doing, Stacy Bartnik, vice
president of field services, said the organization is still pushing hard for
organic growth within existing stores and moving more stores toward a lean
business model with improved KPIs.


"The main goal for the service team is the drive for
operational improvement," said Bartnik.

Gerald Wicklund, the second-generation owner of
Wicklund’s CARSTAR and Glass in Liberty, Mo., which has the distinction of
being the first-ever CARSTAR franchise, came away from the conference with the realization that his shop has to increase its marketing efforts.

"I realize now that we need to put together a team
to do our marketing," Wicklund said. "That includes a social media
person, a website person and a video person. Also, the more estimates I write,
the more I’m finding out that people are turning to the Internet for research.
Roughly 25 to 30 percent of my customers coming in the door have done research
online about body shops and the collision repair process." 

Click to comment
BodyShop Business