Most of the 18,000-plus new-vehicle dealerships in the United States don't run body shops. But hundreds more dealerships have gotten into the collision repair game in recent years — even as others have dropped out — and that trend appears likely to continue.
As industry analysts expect new-vehicle sales in 2018 to drop for a second straight year after seven brisk years of growth, dealerships are looking even more to their fixed operations — including body shops — to make their profit numbers work. If you're deciding whether to open or expand a shop, we hope our special report on collision repair in this issue of Fixed Ops Journal will prove useful.
The share of franchised dealerships that operate on-site body shops rose to 39.2 percent last year, up from a low this decade of 35.3 percent in 2013, the National Automobile Dealers Association reports. Dealership collision centers wrote more than 3.6 million repair orders in 2017, an average of more than 500 orders per shop, NADA says.
But if you think running a dealership body shop amounts to an ever-expanding license to print money, think again. In 2017, NADA notes, total sales by dealership collision repair centers — about $6.73 billion — were lower than in the three previous years. And sales per repair order last year — roughly $725 a ticket — were down from 2016. That suggests the competition dealerships face from repair chains and independent shops isn't easing.
The decision whether to keep bodywork in-house or outsource it remains a tough one for dealers and fixed ops managers. But the return on investment is potentially lucrative: Collision repair remains a $40 billion-plus business in the U.S., according to industry estimates.