The four largest body shop consolidators have quietly continued to grow, and appear poised to play a bigger role in the collision repair industry — and compete more aggressively with dealership-owned shops — as the cost of doing business climbs.
Because three of the Big Four consolidators — ABRA Auto Body & Glass, Caliber Collision and ServiceKing Collision Repair Centers — are owned by private equity firms, they provide only occasional basic information about the numbers and locations of their shops, little about their strategies and none about sales or profits. That makes it hard to gauge who's moving ahead in the game of body shop acquisition.
The fourth consolidator, Boyd Group, is more transparent because it is traded on the Toronto Stock Exchange. Boyd, which operates Gerber Collision & Glass stores in the United States, issues quarterly and annual reports that give clues to where analysts say the collision repair industry is heading.
The big consolidators are likely to get bigger because they have the means to invest in new equipment and training and earn repair certification by automakers. They are forging stronger partnerships with insurers and some new-vehicle dealerships to provide collision repair.
The major consolidators also will pose a greater threat to dealerships that retain body shops but don't invest in and cultivate their collision repair operations, says Brad Mewes, principal of Supplement Advisory, a consulting firm in Irvine, Calif.
Mewes says the four major consolidators have the capital and scale to overcome the headwinds that face the industry: fixing vehicles packed with advanced driver assistance systems, meeting automakers' certification standards and regulators' stiffer environmental rules and dealing with greater legal liability. That gives them the chops to compete head to head with dealerships, he says.
"This is an industry whose cost structure is going to continue to increase," Mewes told Fixed Ops Journal. "It will become more difficult for smaller operators to compete in that environment, because the larger companies are going to have an investment advantage."
Companies such as Boyd and Caliber, as well as large dealership groups such as AutoNation, "are investing in certification and OEM relationships and making all the investments now so that five or 10 years from now, they have an established network they can leverage," Mewes adds.