Feedback from the bodyshop sector has amounted to a total market value of £5.3bn, a £130m fall from the £5.46bn peak in 2004. But analysts for Sewells Information & Research, which published the information this month in its 2007 Bodyshop Opinion Survey, warned: “While a fall in market value in current prices is bad enough, taking account of the effects of inflation, the picture is even gloomier.”
At 1987 prices the market is worth £2.7bn, a shrinkage of £0.2bn over the last 20 years, due to lower levels of work from insurers and work providers. This is down to increasing vehicle write-offs and less valuable repair jobs in terms of labour hours sold.
Of all repairs, 76% is work done for insurers and accident management companies. That represents an 8% drop over the last decade. Repairs for fleet and retail customers are the segments which have seen steady growth, although these still amount to only a quarter of the market. Sewells believes this may be connected to motorists choosing larger insurance excesses and paying for repairs, in addition to above-inflation increases in bodyshops’ retail labour rates.
The report also highlights a slowing of the decline in the number of bodyshops.
Consolidation, environmental legislation and a decline in used car refurbishment work are cited as reasons for a further 28% reduction in the number of small bodyshops (0-8 productives). Medium bodyshops have grown by 6.5%.
The report concludes: “While the fall in bodyshop numbers may seem damaging, it is the fortunes of primary bodyshops that matter. These are the backbone of the industry and carry out 80% of the work. There are 4,070 primary bodyshops in the UK. In 1996/7 there were 6,300.
However, the rate of closure has slowed and taking this into account the number of primary bodyshops will fall to 3,480 by 2012, which might not prove a problem.”