As consolidators move into your neighborhood, they will become your biggest competition. The major consolidators—Crash Champions, Boyd Group, and Caliber—have increased their holdings by over 400% in collision and related industries, leaving a smaller percentage of business for independent auto body shops.
Automotive manufacturers are requiring body shops to be certified before repairing vehicles and purchasing parts. Some independent repair shops have obtained certifications to meet manufacturers' demands. This trend will continue, with manufacturers instituting more specific requirements for their brands. However, investments in certifications, equipment updates, and training to meet these requirements are becoming increasingly costly for independent collision repair shops.
Integrated vehicle technologies have advanced to the point where most independent shops struggle to competently perform even basic repairs. Automotive brands are recognizing that many individual repair facilities lack the skills, equipment, and processes necessary to repair all vehicle makes. As technologies continue to evolve, the costs of hiring certified technicians and updating tools will rise significantly, further challenging independents.
Companies like Copart and IAA are leveraging their global scale, technological advancements, and industry consolidation to achieve worldwide exposure, resulting in very high returns on salvage total loss vehicles. As a result, insurance companies are opting to total vehicles more frequently rather than repair them, saving money and reducing liability. This trend further decreases the volume of repair work available to independent shops.
Major consolidators are actively recruiting new employees through educational institutions, offering financial incentives, paid training, and guaranteed employment with full benefits. Independent shop owners face the challenge of a shrinking talent pool, as consolidators lure away skilled workers, creating a "brain drain" in the industry.
Major consolidators are also acquiring industry-related companies, including vendors for glass, paint, and supplies. Independent shops may unknowingly be supporting their competitors through business transactions with these vendors, which are often owned by large consolidators.