Consolidation and a slumping economy produced a slight decrease in the number of independent collision repair businesses. ASA estimates the number of independent collision repair businesses in 2002 at 35,118; down from 35,153 in 2001. The number of employees has increased to 216,230 employees. That is up 216 from 2001 figures.

Currently, a total sales figure for independent collision facilities equals an ASA estimated $27.5 billion for 2002. These figures do not include approximately 9,000 auto dealerships with body shops generating $8.1 billion ($4.5 billion in labor and $3.6 billion in parts) in 2001, according to the National Automobile Dealership Association.

Shop Profile

According to collision repair business owners (91 percent) and managers (9 percent), the average collision facility has 18 bays, is approximately 11,817 square feet and has a history of 26 years in business. This is a slight decrease from the 20-bay, 11,816-square-foot average facility in 2001. In 1993, 88 percent of those surveyed reported having six or more bays.

Although some ownership changes have occurred within the collision industry, the majority of the industry still remains independent (93 percent) and family owned (87 percent). Franchises make up 5 percent of the market. One percent is dealer owned and consolidators own 1 percent. The most popular franchiser mentioned was CARSTAR. (Of the 16 respondents who said they were franchised, 12 were CARSTAR facilities.)

This year, the "How's Your Business?" survey asked respondents if they carried within their business insurance policy additional liability coverage for direct repair program (DRP) and/or fleet contracts. Seventy percent of collision businesses said yes.

Gross annual sales reflected the economic climate and shifts in overall business size. Smaller collision businesses, under $250,000, make up 2 percent of the population. Eleven percent are in the $250,000 to $500,000 category, which is similar to 2001 numbers. In 2002, businesses in the $500,000 to $750,000 category increased to 14 percent from 10 percent in 2001. Sixteen percent of businesses generate between $750,000 to $1 million. The largest percentage of businesses (33 percent) posted gross annual sales in the $1 million to $2 million range. An additional 17 percent experienced gross annual sales between $2 million and $4 million. The percentage of businesses earning more than $4 million in gross annual sales doubled from 3 percent in 2001 to 6 percent in 2002.

In 1993, annual sales up to $250,000 held 17 percent of the market (that's quite a change from the current 2 percent market share). A quarter of the market was $250,000 to $500,000. The largest percentage of annual sales market share was found in the $500,000 to $1 million (36 percent). The remaining 22 percent generated more than $1 million in sales annually.

To aid in creating a clearer picture of where collision business is occurring, the 2002 "How's Your Business?" survey asked each collision shop for its city's population. Compared to last year, a shift has occurred within the 25,001 to 100,000 population category. In 2002, 30 percent of collision shops were in this category. That's up from 26 percent in 2001. Twenty percent are in the 100,001 to 500,000 range and 22 percent inhabit cities with greater than 500,000 people. Twelve percent of collision businesses can be found in cities with populations fewer than 10,000. The remaining 16 percent are located in towns and cities with populations between 10,001 and 25,000.

Few collision repair businesses lack Internet access. Currently, 97 percent report having Internet access, up from 89 percent in 2000.

This year ASA asked how collision businesses access the Internet. The top two forms of Internet access are 56K lines (43 percent) and DSL (36 percent), followed by 28K (7 percent), cable (7 percent) and ISDN (2 percent).

Internet activities within collision repair businesses continue to change. Some of the most notable changes occurred in transferring funds. Fifty-one percent of collision repair businesses in 2002 used the Internet to transfer funds, compared to 19 percent in 2001. Getting repair procedures: 52 percent in 2002, compared to 44 percent in 2001. Advertising the business: 47 percent in 2002, compared to 56 percent in 2001. By looking at the changes in activities, it becomes apparent the Internet is an increasingly integral part of the business. Fifty-nine percent used the Internet in researching products and information. Forty-three percent used it for news, 36 percent for purchasing tools and equipment, 28 percent for ordering parts, 23.5 percent for Web-based technical training, and 13 percent for chats and discussions. All these activities show the interactive capabilities of the Internet employed by business owners.

The Internet was cited as a source of entertainment by 45 percent in 1999. This has decreased dramatically to 28 percent in 2002. Other uses of the Internet included corresponding with insurance companies regarding client repairs.

Back to Top

Owner Profile

Like the ASA mechanical business owner, the ASA collision business owner is layered with skills and experience. The average owner for a collision repair facility is 49 years old with 27 years of experience, and owns or manages 1.5 facilities. This is an increase from 1.3 facilities in 2001 and one in 1999.

A new question this year asked respondents about their education level. According to the survey, 35 percent of collision business owners are college graduates. Seventeen percent have completed vocational training and 43 percent have earned a high school diploma. Post-college studies have been undertaken by 5 percent of the collision repair business population.

ASE certification still remains among the majority (58 percent) of collision businesses although there was a 7 percent decrease compared to 2001. Similar to previous years, 83 percent of collision business owners are I-CAR trained. And, 49 percent are currently taking Automotive Management Institute (AMI) courses while 13 percent have completed their Accredited Automotive Manager (AAM) designation.

Although owning and managing a collision business is a full-time endeavor, 33 percent of business owners are also participating on a secondary or post-secondary educational advisory board.

In 2000, ASA asked business owners if they were willing to sponsor an apprentice or work-study student; 71 percent said yes. In 2002, the survey checked follow-through and found that 51 percent are participating in a school-to-work or apprenticeship program, up from 44 percent in 2001.

Back to Top

Staff Profile

Employee Salaries - Click here to enlarge graph.

In years past, the "How's Your Business?" survey has asked for general numbers of employees. This year the survey is a bit more descriptive and specific.

Staff layout is fairly extensive. According to survey results, a collision business has one to two entry-level technicians (1.8), four journeyman technicians (3.9), two office/claims staff (2.1), one to two entry-level painters (1.5), two journeyman painters (1.8), two estimators (1.8), one production manager, one general manager and one parts manager.

Regarding salary and wages, entry-level collision technician compensation rose from $21,519 in 2001 to $22,997 in 2002. Journeyman technician salaries also increased from $46,055 in 2001 to $47,536 in 2002. Entry-level painters are paid an estimated $23,849. Journeyman painters dropped a bit in salary to $48,338 in 2002 from $49,372 in 2001. Estimators also experienced a slight decrease in wages. In 2001 an estimator's salary averaged $41,752, but this dropped to $41,296 in 2002. Office/claims staff are paid an average of $27,778 in 2002. Within management, parts managers receive an average of $36,137 annually. Production managers earn $51,182 in 2002, up from $49,372 in 2001. General managers saw a decrease in income for 2002; dropping from $61,948 in 2001 to $61,267 in 2002.

The way a technician's compensation is determined varies among facilities. Sixty percent of technicians receive an hourly wage and 42 percent are compensated from a percentage of the flat rate. A notable change occurred in salaried technicians. In 2002, an average of 29 percent of technicians were on salary. This is up from a reported 4 percent in 2001. Allowing respondents to check "all forms of payment that apply," may account for some of the salary percentage changes. Percentage of labor rate is received by 17 percent of technicians, and 11 percent receive an hourly plus commission type of compensation. Salary plus commission (10 percent) and team plan (4 percent) are the final two options for compensating technicians.

Employee Benefits - Click here to enlarge graph.

In addition to competitive salary and wages, 95 percent of independent collision repair facilities offer employees a paid vacation and 86 percent offer employees paid holidays. Medical insurance is being offered by 82 percent of collision businesses. In addition, uniforms are offered by 80 percent of collision repair businesses. And training and seminars are made available by 81 percent of collision shops as a benefit for their employees.

Resembling other industries and businesses, 53 percent of collision repair businesses offer 401(k)/retirement plans. A yearly bonus is given to employees by 49 percent. Life insurance, offered by 46 percent; and dental insurance, made available by 33 percent; are becoming more common within business benefit packages. Eye care (offered by 21 percent of collision repair shops) and tools (made available by 16 percent) close out the list of benefits offered to collision repair employees. These benefits have only shown a slight change compared to the 1999 survey.

There's a whole lot of training and certifying going on among collision technicians and painters. Of the average five technicians employed by a collision business, four (80 percent) are ASE certified in at least one area. Of the three to four painters, two (65 percent) are certified with a specific paint manufacturer. Of the nine total technicians and painters, six (66 percent) are I-CAR trained.

When respondents were asked how education was funded, 79 percent said the employer funded their technicians' continuing education. Eighteen percent of collision repair facilities believe in a team approach to funding education where both the employer and the technician share the expense. Two percent require the technician to foot the entire bill. This has shown little fluctuation over the years.

Ninety-two percent of business owners are also supportive of technicians training during the workday. Only eight percent would not allow a technician to attend training during the workday.

During the year, each technician participates in an average of 18 hours of updated education and training. This training comes from a variety of sources. The source cited by most respondents was paint companies at 82 percent. I-CAR garnered the second position at 80 percent. Product manufacturers ranked third at 68 percent, and equipment manufacturers were cited by 63 percent as a source of technician training. More than half of the education and training comes from association seminars (55 percent) and jobbers (54 percent). Industry seminars provide a source of training for 44 percent of technicians.

With 76 percent of collision business owners attending the International Autobody Congress and Exposition (NACE) and bringing an average of three staff members, it makes sense that 39 percent use NACE as a source of technical training. More than a third (36 percent) report trade magazines as a source of technical training. (This category reached a high of 49 percent in 2000.) Only slightly behind, 33 percent of collision businesses use in-house training programs for technician training. Other technician training options - OEMs (19 percent), independent programs (16 percent), community/vocational schools (15 percent) and Web-based training (9 percent) - round out the sources used by collision repair businesses.

When asked which type of employees were in highest need, 37 percent of respondents said journeyman technicians. Nearly a quarter of business owners (23 percent) said they had all the employees they need, and 20 percent said they need entry-level technicians. In less demand are management and claims administrators (needed by 6 percent of respondents), estimators (4 percent) and entry-level painters (3 percent).

Starting in 1999, the "How's Your Business?" survey asked collision businesses about technicians leaving and being hired during the previous year. In 1998 an average of two technicians left and two technicians were hired. In 2001 an average of 1.53 technicians left and an average of 1.76 were hired.

When responses are categorized to give a better picture of technician retention, 34 percent saw no technicians leave and 20 percent hired no technicians. Forty-six percent saw one to two technicians leave while 55 percent hired between one and two technicians. Eleven percent of businesses had between three and four technicians leave, while 15 percent hired between three and four technicians. Seven percent saw between five and six technicians leave, and 6 percent hired between five and six technicians. The remaining 2 percent had technician turnover of seven or more in 2001, while 3 percent hired seven or more technicians.

Sources for finding collision technicians closely resembled those used by mechanical businesses. According to survey results, 64 percent of new hires come from referrals and word of mouth. Vocational schools produced 13 percent of new hires and 9 percent was garnered from other collision repair businesses. Paid classified advertising was cited by 8 percent, while the apprentice/industry program option doubled in 2002 from 3 percent to 6 percent.

Back to Top

Sales

Sales - Click here to enlarge graph.

Like other industries, the collision repair industry felt the effects of the economic downturn. For the first time in the "How's Your Business?" tenure, about a third (34 percent) of collision businesses reported having a sales decrease of approximately 16 percent. Fortunately, 47 percent reported a sales increase of approximately 13 percent. Nineteen percent cited no change.

For those experiencing a sales increase, 48 percent of the respondents said it was due to marketing and advertising and 47 percent attributed the increase to improved customer service. Technician proficiency (28 percent), increased services provided (23 percent) and the addition of a new account (22 percent) completed the top five reasons for a noted sales increase. Other reasons for increased sales included increased labor rates (19 percent), poor weather conditions (11 percent) and a better economy (10 percent). Here, respondents were asked to check all areas that apply, creating response totals greater than 100 percent.

When comparing profits in 2001 to profits in 2002, 44 percent see an increase. This relates to the 50 percent that also see an increase in customers this year compared to 2001. It also relates to the 46 percent taking note of an increase in the number of jobs being performed.

Thirty-two percent of respondents reported a decrease in profit, 24 percent reported a decrease in customers and 31 percent reported a decrease in number of jobs. This corresponds with a third of respondents citing a decrease in overall sales for 2002.

Collision shop owners and managers were also asked to make sales projections for next year. While 3 percent are bracing for a decrease in sales for 2003, 79 percent are looking for an increase. In 1993 predictions were much the same; 77 percent held a sense of sales optimism while 4 percent projected a decrease.

Reflections from the large percentage of businesses experiencing a decrease in sales appeared in the amount of the average ticket, dropping from $1,888 to $1,786, with 43 percent going to parts and 50 percent going to labor. The remaining 7 percent is applied to incidentals.

With an average cycle time of 5.6 days, collision businesses are able to complete 83 repairs a month (approximately 21 repairs a week). Currently 67 percent of collision businesses use standard operating procedures to get the job done.

Comebacks can cramp the style of any repair business. Currently collision businesses are experiencing an average of 4.56 comebacks a month or 5 percent of monthly repairs. This is up from 3.24 in 2001.

Last year 23 percent of comebacks were attributed to parts fit and quality. This year, respondents were asked to cite what percentage of the various part types were rejected due to fit and quality. Aftermarket parts faired the worst (43 percent) followed by salvage (27 percent). OEM parts required the least amount of return with only 4 percent being rejected.

To complete the picture, the survey asked collision business owners the breakout of parts by manufacturer type. Nearly three-quarters (74 percent) of parts used in collision businesses are OEM. Non-OEM parts garner 12 percent usage. An additional 13 percent of parts come from the recycled OEM category. Surpassing the 100 percent mark, 5 percent of parts used in collision repair businesses were recycled non-OEM. Some respondents selected more than one category, attributing to percentage totals of more than 100.

Participation in direct repair programs (DRPs) has increased over the years. In 1994, 55 percent of collision repair businesses participated in DRPs. According to 2002 survey results, 90 percent of collision businesses participate in an average of seven DRPs. DRP participation accounts for an estimated 48 percent of collision business volume, up from 42 percent in 2000 and the 32 percent in 1997.

When inquiring about the busiest time of year, summer (24 percent), winter (28 percent) and all year around (34 percent) received similar percentages. Fall and spring were 10 percent and 4 percent, respectively.

Resembling mechanical businesses, the busiest day of the week is Monday, according to 72 percent of collision businesses. Midweek - Tuesday, Wednesday and Thursday - were said to be the least busy for new job acquisitions with a combined percentage of 9. Friday is the busiest day for 19 percent of ASA collision businesses.

Back to Top

Customer Demographics

The percentage of women using collision repair businesses continues to increase. In 2002, 54 percent of collision customers are women, up from 50 percent in 1997.

This year, 56 percent of customer makeup is repeat business (customers with comeback loyalty). This is an increase of 4 percent from 2001 figures. Sixty-six percent of businesses are using customer satisfaction surveys. Analyzing those results is key to retention and new customer growth. The use of customer satisfaction analysis has shown continuous growth from the 1995 response of 55 percent.

The current customer base is reaching the middle ground of 2000 and 2001 numbers as regards the average distance a customer travels to get to the business. Customers averaged 28 miles for 2002. In 2001, customers traveled 26 miles; in 2000, they traveled 31. Knowing the average distance a customer travels provides valuable marketing and business planning information.

Back to Top

Marketing and Advertising

Ninety-one percent of businesses take part in some form of advertising. In 2002, $17,685 went into advertising, promoting and generating sales for the average independent collision business.

Collision repair businesses use several forms of advertising. Word of mouth and customer referrals win again as the best business promoter (according to 84 percent of respondents).

Seventy-eight percent of collision repair businesses use the Yellow Pages for paid advertising (interestingly, the Yellow Pages have been the No. 1 choice for paid advertising since this survey started in 1993). This year, the Internet took a leap into second place for those advertising dollars, showing an increase from 27 percent in 2001 to 41 percent in 2002. And 52 percent of collision businesses report having a Web site or Web page, a 5 percent increase from two years ago.

Newspaper (34 percent) and radio (30 percent) are also sources of collision business advertising, and are often used in combination with one another.

Direct mail (17 percent), billboards (17 percent), cable television (14 percent), "neighborhood shoppers" (12 percent) and broadcast television (7 percent) also had a decent showing. Cable television gained 5 percent from 2001 results. Other forms of advertising not listed but cited by business owners included church bulletins, community involvement, local sports team sponsorships and car shows.

An element of community involvement is providing customer "know-how" programs to the locals. Currently, 23 percent of collision business owners participate in "know-how" programs.

Professionalism, strong customer service, community involvement and various advertising campaigns have had positive effects in the industry's image. According to 60 percent, the public's image of the collision repair industry is improving. Thirty-five percent feel the image is staying the same, and 5 percent said the public's image of the collision repair business is declining.

Back to Top

Industry Issues

ASA collision repair facilities were asked to pinpoint the top five issues having the largest impact on their business. The primary issue this year is the influence the insurance industry has on collision repair - 51 percent of collision repair businesses cited that. This is followed by DRPs (42 percent), recruiting good technicians (38 percent), receiving payment for necessary repairs (33 percent) and labor time allowances (30 percent). Last year, 55 percent said the primary issue was finding good technicians. Labor time allowances were less of an issue in 2001 (20 percent).

Keeping up with technology (22 percent), cycle time (20 percent), retaining technicians (19 percent), industry image (17 percent) and aftermarket crash parts (17 percent) close out the top 10 issues.

Issues receiving fewer responses included repair information availability (10 percent), recruiting good middle management (10 percent), consolidation (9 percent), regulatory compliance (8 percent) and salvage parts (7 percent).

Back to Top

RATE THIS ARTICLE What do you think of this article? Your input will help AutoInc. develop additional articles on this subject. Share your thoughts! Your name Your e-mail address

MOST ACCESSED ARTICLES Fuel Injection Service, Not Just Cleaning The Art of Extraction EGR Systems: Operation and Diagnosis Proactive Target Marketing:_Rethinking Your Business Strategy Engine Performance: HO2S Diagnostics MOST E-MAILED ARTICLES Developing Employee Potential How Critical Thinking Can Help Your Business How to Diagnose the Ford Glow Plug What to Look for When Shopping for the Right Shop Management Software Putting a Price Tag on Complaints

AutoInc. Web Site | ASA Web Site | The 108th Congress | Engine Performance: HO2S Diagnostics | Servicing Airbags | ASA's 10th Annual Survey: "How's Your Business?" | Guest Editorial | Tech to Tech | Tech Tips | Net Worth | Stat Corner | Chairman's Message