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17th February 2020
(published in Modern Insurance magazine, issue 42)
The body repair industry, like many other sectors in the UK has experienced a degree of uncertainty during 2019. Overall however, it is in fairly good shape and will continue this trend into 2020. Bottom line discounts and low labour rates are seen by repairers as huge threats, but as the number of repairers has reduced, the independent groups grow through acquisitions and repairer networks become more active, this situation may well improve slightly in 2020. The average labour rate improved slightly from £35.48 to £36.44 in the first half of 2019, which is positive but, compared to mechanical rates, this is still woefully low in such a highly skilled sector. Repairers are looking for labour rates in excess of £44.00 per hour to allow for the investment required in new repair technology and training as well as improving staff pay levels to prevent movement to other, better paid industries. Over half of UK accident repair centres this year are reporting increases in repair volumes with a similar number experiencing slightly higher profitability. The outlook for the next twelve months is positive with 70% of repairers expecting a rise in volumes.
If we lookat how the UK body repairers are organised, out of 2,850 primary bodyshops (companieswhose primary business is accident damage repair and which has fallen by astaggering 25% since 2009), 425 of them are part of independent groups and 228are dealer owned bodyshops, This leaves around 2,200 stand-alone independentbodyshops who need to compete for repair work with the independent groups andwe will continue to see many of these bodyshops being “given a voice” byjoining independent networks, a trend which will continue into 2020. Thesenetworks are able to put national service level agreements in place on theirbehalf and insurers, fleet operators and fleet management companies will enjoyother tangible benefits such as the high level of customer services beingdelivered through a collective owner driver as opposed to a branchmentality. Compared to the largest of the independent groups which still has only 28 bodyshops, these independentnetworks offer a centrally managed national solution with typically, over 200, accredited car, van and HGV bodyshops. In 2020, we will also see bodyshops investing further in equipment and training to repair ever more complex vehicles with collision avoidance systems as well as high voltage drive trains.
(Acknowledgement for data: ABP Club)