There is no doubt many dealers are pulling out of the body repair market. According to the Bodyshop Magazine 2004 Industry Survey – published this week – franchised bodyshops have closed at twice the rate of independent primary bodyshops in the last 10 years.
Have franchised dealers just got fed up – that would be a disaster for the industry as franchised bodyshops account for more than 30% of UK body repair capacity.
There is little in the Survey to suggest the market is improving. It reports less than 1% real growth in market value since 2000 and a 5% fall in the number of insurance jobs in the same period.
Other findings are just as pessimistic – investment has fallen, apprentice recruitment is at a low level, debtors-days are up, and courtesy cars clearly represent a huge burden. Investment news is particularly serious.
Only 35% of bodyshops interviewed had bought major equipment in the last 12 months, compared to 55% in 2000, and those that did invest spent less – £12,733 compared to £18,449 in 2000. If this is representative, it suggests purchases of major equipment are at one-third of the level of 2000 for the body repair industry as a whole, and this at a time when developments in vehicle technology require huge increases in investment.
So for franchised dealers looking to the future of body repairs, is there any hope? Well, the increasing interest of carmakers in the market could be decisive. Also, as the number of bodyshops fall, it means more for those left and a stronger position during negotiations with work providers. But as one dealer principal said only last week: “Last man standing is hardly a serious business strategy!” Longer-term, though, perhaps this is the only hope – unless bodyshops individually take a much tougher stance with work providers very soon.'