Business Profile || Owner Profile || Staff Profile || Sales ||
Customer Profile || Marketing and Advertising || Industry Issues

Based on the percentage of facilities reporting a decrease in sales and the percentage of sales decrease, ASA is estimating a reduction in the total number of collision repair facilities. A conservative estimate for the number of independent collision repair facilities in 2003 is 34,646. This is down slightly from the estimated 34,856 facilities in 2002 and the 34,786 in 2001.

Although the act of business consolidation has slowed over the past two years, the 1 percent to 2 percent consolidation base did affect the industry early in 2002. With greater than 205 million vehicles on U.S. roadways, the probability for accidents continues to increase. To accommodate consumers, collision facilities are increasing their number of bays and number of employees. ASA estimates there are 225,625 employees working in independent collision repair businesses.

An estimated total sales figure of nearly $23.5 billion is projected for 2003. This amount is based on 2003 projected sales increases and decreases along with the $22.9 billion reported by the U.S. Bureau of Economic Analysis annual service survey. These figures were adjusted in 2003 from 2001 actual sales. These figures do not include the approximate 8,473 franchised dealerships with body shops generating an estimated $8.2 billion in 2002 according to the National Automobile Dealership Association.

Business Profile

This year's response to the "How's Your Business?" survey was tremendous with 365 owners (86 percent) and managers (13 percent) from all over the United States taking the time to complete the detailed survey. According to respondents, the average facility has 19 bays and is 12,557 square feet. This is up slightly from 18 bays and 11,325 square feet in 2002.

To show bay distribution within the industry, categories of bays were also enlisted. More than half of the respondents have more than 13 bays (65 percent). Sixteen percent have 10 to 12 bays. Ten percent have seven to nine bays. Seven percent have four to six bays and the remaining 2 percent are one- to three-bay facilities. In 2004, the survey will expand the number of bay categories, providing greater description of the 13-plus bays.

Through tough economic times, collision repair businesses continue to adjust their incomes and survive. The average age of a collision repair business is 28 years. This year saw a slight decline in the number of businesses owned or managed from 1.5 in 2002 to 1.3 in 2003.

Predominant ownership of facilities still belongs to the independent sector with 93 percent citing independent, 5 percent as franchises (including dealerships) and 2 percent consolidators. CARSTAR remains the most popular franchiser among survey respondents.

To aid in creating a clearer picture of where collision business is occurring, the 2003 survey asked collision businesses for their city population. This year's results saw a shift in percentages of facilities located in the various city sizes. Fourteen percent of the collision business population is located in cities under 10,000 people. Thirteen percent is located in areas of 10,001 to 25,000 people. The largest percentage (27 percent) is located in cities from 25,001 to 100,000. This is followed by the 24 percent in cities of 100,001 to 500,000. This percentage grew from 20 percent in 2002. The remaining 22 percent are found in cities with population greater than 500,000.

Comparing the 2003 survey results with the 2002 results showed a notable shift in gross annual sales occurred from 2001 to 2002. Respondents were asked to estimate their gross annual sales for 2002. Those earning under $250,000 nearly doubled from 1.9 percent to 3.6 percent. Ten percent of the population recorded between $250,000 and $500,000. Those earning between $500,000 and $750,000 dropped a notable 4 percent, from 14 percent in the 2002 survey to 10 percent in the 2003 survey.

The $750,000 to $1 million category did show positive growth from 16 percent total annual sales for 2001 to 18 percent annual sales for 2002. The largest area continues to be from $1 million to $2 million, 32 percent. The $2 million to $4 million category increased by nearly 4 percent from 17 percent to 21 percent. Same as last year, 6 percent of the population had annual gross sales over $4 million. This is slightly above 100 percent due to rounding.

Internet access has reached a plateau within repair facilities with 96 percent reporting Internet access. A shift in how businesses access the Internet is apparent within this year's results. Respondents with 28K access dropped from 7 percent in 2002 to 1 percent in 2003; 56K also dropped measurably from 43 percent in 2002 to 31 percent in 2003. ISDN saw a slight increase from 2 percent to 3 percent. The largest gains occurred in the use of DSL from 36 percent to 49 percent. Cable is on the rise, more than doubling its usage from 7 percent to 15 percent.

The predominant uses for the Internet included e-mail (95 percent), product research (62 percent), transferring funds (61 percent), industry news (60 percent) and accessing repair information (52 percent). Purchasing tools (47 percent), advertising their facility (42 percent) and ordering parts (36 percent) round out the top Internet activities.

Similar to mechanical repair facilities, 54 percent of collision businesses reported having a Web site while only 42 percent cited it as a form of advertising.

Closing out the usage of the Internet are Web-based training (28 percent), entertainment (24 percent), tracking parts (14 percent), customer retention (7 percent), and chats/discussions (5 percent). Those responding were allowed to select all activities that applied, creating greater than 100 percent.

This year, the How's Your Business survey asked which days the collision repair facilities were open. Results show a shift from a five-day workweek to 5.25 days with 25 percent of respondents adding Saturday, in part or full day, to their hours of operation.

"All year around" continues to be cited most often as the busiest time of year (37 percent). Winter (26 percent), summer (19 percent) and fall (13 percent) follow. Although those surveyed were asked to select only one season, more than one season would often be indicated, causing a less than accurate description of the busiest season of the year.

Monday was cited as the busiest day of the week by 51 percent. This was followed by 23 percent selecting all week and 19 percent selecting Friday. Other days were in the single digits. Here again, respondents were asked to select only one day but selected multiple days, therefore diluting the accuracy of these particular results.

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Owner Profile

Like the ASA mechanical business owner, the ASA collision business owner is layered with skills and experience. The average owner of a collision repair facility is 50 years old with 28 years of experience.

In hopes of creating a more accurate picture of the collision repair industry workforce, owners' ages and experience were placed into categories.

From an age perspective, the majority (42 percent) are between 45 and 54. This is followed by the 35-44 category (28 percent). Eighteen percent are from 55 to 64 and 5 percent are 65 or older. Six percent of the population is between the ages of 25 and 34.

Five percent of business owners have less than 10 years experience. Twenty percent have between 11 and 20 years of experience. Forty percent of collision business owners and managers have 21 to 30 years of experience. Twenty-six percent have between 31 and 40 years of industry experience. The remaining 9 percent have 41 or more years of industry experience.

The formal training of business owners continues to increase within the automotive repair sector. Currently, 38 percent of business owner's highest level of education is high school. Nineteen percent vocational and trade school training follow this. The largest percentage (39 percent) cited college as their highest level of formal training. The remaining 4 percent have garnered additional education from graduate school.

ASE certification continues to be held by 57 percent of the independent collision industry ownership population. Similar to previous years, 82 percent of collision business owners are I-CAR trained.

To clarify Automotive Management Institute (AMI) course attendance, the survey asked the respondent if he or she had attended AMI-approved courses within the past 12 months; 31 percent have. The time frame produced a reduction from 49 percent in 2002. A large portion, 90 percent, of collision business owners have yet to obtain an Accredited Automotive Manager (AAM) designation.

Although owning and managing a collision business is a "full-time and then some" endeavor, 23 percent of business owners are also participating on a secondary or postsecondary educational advisory board. This is a 10 percent reduction in participation from 2002.

The percentage of businesses currently participating in a school-to-work program with apprentice technicians continues to decline. In 2002, the survey found 51 percent were participating in a school-to-work or apprenticeship program. This dropped to 20 percent for 2003. An average of one student works in the businesses of those actually participating.

Each year the Automotive Service Association sponsors the International Autobody Congress and Exposition (NACE). Survey respondents were asked their attendance history. Fifty-three percent attended in 2000. Thirty-nine percent attended in 2001. Twenty-four percent attended in 2002. And, 34 percent are planning to attend in 2003. Twenty-seven percent of collision business owners have yet to attend NACE.

In addition to themselves, the business owners take an average of two other employees to the collision trade show.

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Staff Profile

Benefits Provided to Employees - Click here to enlarge graph.

Striving to provide a descriptive and accurate picture of the employee structure of the collision repair business, the How's Your Business survey asked respondents to provide the number of employees based on job description. During this process, it is noted that often owners removed themselves from the listing or had employees that performed multiple tasks such as estimators and office staff or parts, production and general mangers.

According to survey results, a collision business has 1.4 apprentice techs (less than one year experience), 1.5 entry-level technicians (one to five years experience) and four experienced technicians (five-plus years of experience).

Facilities also have 1.4 entry-level painters (one to five years of experience), two experienced painters (five-plus years of experience) and two estimators. Office personnel and administration include two office staff persons, one general manager and a part manager. Again, the same individual may perform multiple tasks depending on annual sales and volume.

Salaries and wages among collision business employees continue increasing similar to inflation. Apprentice technicians earn an average of $19,490. Entry-level technicians earn an average of $26,655 for 2003. In prior surveys, apprentice technicians and entry-level technicians were grouped together, diluting the salary. Experienced technicians increased their wages from $47,536 in 2002 to $51,670 in 2003.

Entry-level painters are paid an estimated $27,033. Experienced painters (replacing journeyman painters) averaged $54,061 in 2003. An estimator's annual salary averaged $47,824 in 2003.

Office staff/claims staff received an annual salary of $30,253. Parts managers earned $35,266, production managers earned $51,365 and general managers earned $66,512 in 2003.

Technician compensation demonstrated change in this year's results. Hourly compensation went from 60 percent in 2002 to 37 percent in 2003. Flat-rate wages held close to last year's results at 38 percent from 42 percent in 2002. Twenty-five percent of technicians were compensated from a percentage of the labor rate. Hourly-plus-commission wages were earned by 13 percent of technicians.

Salaried technicians went from 4 percent in 2001 to 29 percent in 2002 and back down to 11 percent in 2003. A plausible reason for such change is better clarification of the wage type options. Salary plus commission (7 percent) and team plan pay (6 percent) complete the ways of compensation used by collision business owners. Allowing respondents to check all forms of payment which apply account for the greater than 100 percent results.

Benefits and training are a common element of an employee's overall compensation package. Ninety-seven percent of independent collision repair facilities offer their employees a paid vacation. Paid holidays come in a near second at 86 percent. Medical insurance is being offered by 84 percent of collision businesses. In some situations, the employee funds a portion of the payment. Technician training (83 percent) and uniforms (81 percent) round out the top five benefits offered by collision repair businesses in 2003.

Retirement plans such as 401(k) plans are being offered by 52 percent. Life insurance (38 percent) and management training (34 percent) are also provided by collision businesses. Dental insurance (32 percent) and eye care (27 percent) complete the top 10 benefits.

This year the benefit of a Cafeteria 125 plan was added to the list of options. Twenty-four percent are offering such a benefit. Tool reimbursement is occurring at 19 percent of facilities.

In doing an overview of benefits offered by collision repair facilities, it is apparent that insurance accounts for five of the 12 benefit options.

Management and technician training, although listed as benefits, are important elements in the survival and success of any business. Eighty-seven percent of businesses value training enough to allow technicians to attend training during the workday.

Results show 81 percent of collision businesses fund the education of their technical staff. Fifteen percent are sharing the cost of training with their employees. A slight 2 percent require sole funding from their employees. The remaining 2 percent do not participate in training.

It is estimated that 17 percent of the registered vehicles (36,720,000) are involved in vehicle collisions annually. Of that, 15 percent are totaled and another 28 percent elect to not repair their vehicles. That leaves approximately 21 million vehicles up for repairs. This is according to Collision Repair Industry Insight's annual State of the Industry report.

To perform these repairs, training is paramount. The survey asked respondents to provide an average annual amount of training undergone by staff based on position. Entry-level technicians (painter and frame) received 29 hours of training in the past 12 months. Experienced technicians attended 24 hours of training. And managers received 27 hours of training. By better segmenting the various positions within a collision business, the 2003 survey more accurately portrays the amount of education collision repair professionals are receiving. Overall, employees received, on average, 27 hours of training during the past 12 months versus the 18 hours reported on last year's survey.

This year, the survey asked how much was spent on training the staff. Owners reported spending an average of $1,081 for entry-level technicians, $1,363 on experienced technicians and $1,599 on managers.

Similar to years past, technicians garner a large portion of their training from paint companies (86 percent), I-CAR (79 percent) and jobbers (60 percent).

Association seminars (53 percent), industry seminars (47 percent) and in-house programs (45 percent) round out the top six sources for technician training.

This year's results saw a notable reduction in the use of equipment manufacturers for training from 63 percent in 2002 to 42 percent in 2003. Incorporating trade magazines into training increased from 36 percent to 41 percent. Training at NACE for technicians was cited by 36 percent of the population. OEM training grew from 19 percent to 33 percent.

Independent training providers gained 10 percentage points this year, reaching 26 percent. Product manufacturer training, like equipment manufacturer training, saw a pronounced drop from 68 percent in 2002 to 21 percent in 2003. A possible reason for the reduction in product and equipment training is the weakened economy, drops in annual sales and lack of new product and equipment business buying power.

Community or technical colleges (14 percent) and Web-based training (11 percent) complete the list of technician training options. Respondents were allowed to select all aspects of training that apply, creating greater than 100 percent.

ASE certification is a prominent element among collision technicians. According to survey results, nearly four of 10 technicians are ASE certified. A note here is that respondents, although asked about the number of ASE certified technicians, would incorporate other positions into this response, therefore broadening the ASE certified category.

Two of the 3.4 painters have paint manufacturer certification and 5.5 technicians are I-CAR trained.

A common mantra in the industry is the need for qualified technicians. To understand that need better, the survey asked respondents about technician retention. According to results, 1.2 technicians were promoted in 2002, 1.2 technicians left their facility in 2002 and 1.4 technicians were hired in 2002. These numbers show a slowdown in the technician turnover rate from the 2002 results of 1.5 leaving and 1.7 being hired in 2001.

When asked to select the employee type the business felt it would have the most need for in the upcoming year, experienced technicians (44 percent) received the most votes. Entry-level technicians (30 percent), estimators (11 percent), experienced painters (7 percent) and management (5 percent) followed. Although respondents were asked to select only one, often more than one position was selected. Also, a fault of the survey was that an option to select none was not available.

The main source of new hires comes from referrals (58 percent). Following in the distance are attracting from other businesses (13 percent), classified advertising (13 percent) and career and technical schools (9 percent). Five percent of positions are filled from apprenticeship and industry programs. Only 1 percent of new hires came from high school programs.

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Sales

Gross Sales - Click here to enlarge graph.

The 2003 survey results showed the average repair order in 2002 to be $1,859 with 43 percent attributed to parts and 51 percent to labor. The remaining 6 percent goes to incidentals such as tape and cleaners. This is an increase from the 2002 survey results of $1,786 in 2001.

Categories of repair order amounts allow for a more detailed description of the industry. One percent of respondents averaged $500 or less per repair order. Six percent averaged between $501 and $1,000 per repair order. Nineteen percent averaged between $1,001 and $1,500. The majority (43 percent) averaged between $1,501 and $2,000 per repair order. Twenty-two percent billed an average of $2,001 and $2,500 per order. Six percent averaged $2,501 and $3,000. The remaining 3 percent billed between $3,001 and $4,500 average tickets in 2002.

The average cycle time continues to be 5.5 days for the past few years. Written standard operating procedures continue to be used by 65 percent of the population.

With 43 percent of a repair orders' value being attributed to parts, respondents were asked the percentage of parts used in their business that were OEM, recycled OEM, non-OEM (aftermarket) and recycled non-OEM. Seventy percent of parts were OEM; 14 percent were recycled OEM. Thirteen percent were non-OEM; and 9 percent were recycled non-OEM. When combined, these figures are greater than 100 percent. This is due to variations in part type choices and amounts submitted greater than 100 percent.

Respondents averaged 87 repair orders per month in 2002. This is a slight increase from the 84 repair orders per month averaged in 2001.

Similar to repair order amount, number of orders was also placed into categories to provide clarity and segmentation. Thirty-eight percent of businesses completed up to 50 repair orders monthly. Thirty-six percent completed between 51 and 100 repair orders. Fifteen percent accomplished between 101 and 150 repair orders. Eight percent of larger facilities were able to complete an average of 151 to 200 orders. An additional 2 percent completed 201 to 250 repair orders per month in 2002. The remaining 2 percent moved 251 or more orders out the door monthly. The total is greater than 100 percent due to rounding.

Even with an increase in average ticket amount and number of repair orders, the collision repair industry continues to feel the effects of a weakened economy. Thirty-eight percent of respondents noted an average of 15 percent sales reduction when comparing sales in 2002 to 2003. This is nearly matched by the 42 percent citing an average of 13 percent increase in annual sales from 2002 to 2003. The remaining 20 percent held sales steady.

For those experiencing a sales increase, owners citing improved customer service as the cause took the lead with 65 percent. This was followed by insurance company relations (53 percent), marketing and advertising (40 percent) and services provided (37 percent). Technician proficiency (35 percent), weather conditions (28 percent) and the addition of a new account (20 percent) also were attributed as the causes of increased sales. Use of a management system (13 percent) and labor rates (10 percent) closed out the reasons for a sales increase for the 42 percent of respondents. Here respondents were asked to check all areas that apply, creating greater than 100 percent.

Reasons for a decrease in sales were also collected from the 38 percent noting a sales reduction. Overwhelmingly, the economy was cited as the main reason for change by 87 percent. This was followed by weather conditions (44 percent) and insurance company relations (26 percent). Minor players in the reduction of sales include the loss of an account (9 percent), technician proficiency (5 percent), marketing and advertising (5 percent) and customer service (2 percent). Respondents were asked to check all that applied, creating greater than 100 percent.

When comparing profits in 2002 to profits in 2003, 41 percent noted an increase. This relates to the 44 percent that also see an increase in customers and the 43 percent with an increase in repair orders per month.

A decrease in profit (39 percent), customers (29 percent) and number of jobs (35 percent) for 2003 corresponds with the 38 percent citing a decrease in overall sales for 2003. The remaining percentages are held within the no change or difference area from 2002 to 2003.

Direct repair program participation within the collision repair industry appears to have become a constant. The survey says 89 percent of businesses participate in an average of five DRP programs. This participation accounts for 49 percent of the business' volume. One variation this year is the number of programs in which a facility participates. In 2002, the average collision business was involved with seven programs. This changed to five for 2003.

A positive factor in 2003 was the reduction in the average number of comebacks from 4.5 to 3.3.

Relating to comebacks and beyond, business owners revealed the percentage of parts that were rejected due to fit and quality. Aftermarket parts had the highest rate of rejection, 35 percent. Salvage parts followed with 23 percent. OEM fared best with a 5 percent rejection rate.

Optimism exists among collision business owners. When asked what they expected sales to do in 2004, 86 percent are projecting an increase. Eleven percent is holding on for no change. Two percent are bracing for a sales decrease in 2004.

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Customer Profile

The customer base of independent collision repair facilities is 52 percent female and 48 percent male. Fifty-four percent of the customer base is repeat customers. This is consistent with the 56 percent of repeats from last year.

Currently, 62 percent of businesses conduct some type of customer satisfaction survey. The analysis of those results helps to ensure a strong customer loyalty base and provides valuable information on areas of strength and weakness.

The average customer base extends 27.5 miles from the collision business' location. This number provides a broad-based marketing area from which the business owner can build a marketing plan.

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Marketing and Advertising

Marketing and advertising is a fact of doing business for 91 percent of the independent collision repair population. This year showed a slight reduction in the average amount of advertising dollars from $17,685 in 2002 to $17,054 in 2003. Reductions in advertising often occur when sales falter. This is often counter- productive to increasing sales and customers.

Collision repair businesses use several forms of advertising. Word of mouth dropped to second place this year behind the Yellow Pages, with Yellow Pages being used by 85 percent and word of mouth at 84 percent. The benefit of word of mouth is that it does not require investing in someone else. But, it does require investing in one's self and the business' employees.

Community involvement such as local sports groups and local causes is supported by 55 percent of collision business. Traditional advertising such as newspapers (34 percent) and radio (30 percent) continue to have a decent showing for advertising types. The Internet dropped a few points from 41 percent to 29 percent, although 55 percent of businesses report having a Web site or Web page. There continues to be a disconnect between having a Web presence and using the presence to its fullest advertising capacity.

A new type of advertising added to the list this year based on past year's write-in options is church bulletins. Twenty-nine percent of respondents reported using a church bulletin to advertise.

Direct mail (15 percent), a neighborhood shopper (14 percent), cable television (11 percent), billboards (11 percent) and broadcast television wrap up the advertising options enlisted by collision repair businesses.

An element of community involvement is providing customer "know-how" programs to the locals. Currently, 15 percent of collision business owners participate in "know-how" programs. This is a nine-point reduction from 2002.

As mentioned previously, customer service is having the largest impact on sales, and perhaps it is also affecting the public's perception of the collision repair industry. Fifty-five percent of business owners believe the image of the industry is improving. Thirty-nine percent feel the image is staying the same and 6 percent are noticing an image decline.

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Industry Issues

This year the survey asked business owners to report how industry concerns impacted their business: strong, average or weak. Similar to the mechanical repair industry, keeping up with technology is cited by 69 percent as having a strong impact on their business. This is followed by 61 percent citing labor allowances as having a strong impact on their business.

Other issues having a strong impact include receiving payment for necessary repairs (57 percent) and cycle time (57 percent). Recruiting technicians (51 percent), retaining technicians (50 percent), aftermarket parts fit (49 percent) and industry image (48 percent) close out the issues having a strong impact on collision repair businesses.

Issues with an average impact on business include regulatory compliance (57 percent), severity calculations (54 percent), recruiting middle management (52 percent), repair information availability (52 percent) and recycled parts quality (47 percent).

Consolidation is an issue cited by 41 percent as having a weak impact on the industry. This contrasts with survey results from previous years that reported consolidation as having a strong impact on the industry.

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