Fixed Ops Journal - June 2018 - F13

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Low-key is key to dealership group's
body shop success. Balise Auto
Group deliberately keeps separate the
identities of its 4 body shops and 24
new-vehicle dealerships. autonews.
com/fixedops/bodyshop

So long, mom and pop
National collision repair companies, such as
ServiceKing and Gerber, and smaller independent shops continue to dominate the industry. In 2016, the Auto Care Association
says, there were 41,047 body shops in the
United States, but only 6,349 of them were
dealer-owned.
Still, Stone notes that in the region where his
company operates, "a lot of mom-and-pop
shops" are getting out of the business.

"It's very technical - you
are not just banging steel.
You are working on
batteries and hybrids,
frame machines and
getting these cars back to
within 3 millimeters spec.
You have to offer a
lifetime warranty."

advanced electronics and aluminum panels,
would cost at least $1.2 million. But that can be
just the beginning.
This year, Bill Brown Ford in the Detroit suburb of Livonia, Mich., christened a body shop
that cost nearly $2 million.
The store, which does a lot of business with
truck fleets, installed two oversize paint
booths to handle the tall version of the Ford
Transit van and large F-series Super Duty
trucks. The shop has a special area for aluminum repairs.

BRIAN STONE
Balise Collision Repair Centers

Return on investment



General Motors has started welding steel to
aluminum in the Cadillac CT6 sedan. Ford's
aluminum-bodied vehicles - F-series pickups and Ford Expedition and Lincoln Navigator SUVs - have moved aluminum repairs into the mainstream.
Automaker-affiliated dealerships have advantages in the competition to repair such vehicles, dealers and analysts say.
"It's very technical - you are not just banging steel," says Brian Stone, service director at
Balise Collision Repair Centers, a four-store
operation owned by Balise Auto Group, which
has 24 new-vehicle dealerships in Rhode Island, Massachusetts and Connecticut.
"You are working on batteries and hybrids,
frame machines and getting these cars back to
within 3 millimeters spec," Stone told Fixed
Ops Journal. "You have to offer a lifetime warranty.
"I honestly believe that a body shop can be
your biggest profit net out of any of your fixed
operations, if it is run correctly," he adds.
An industry veteran who has managed dealership and independent collision repair centers concedes: "The dealer lost hold of the customer on the collision side years ago. But now
they have every opportunity, with the manufacturer, to regain ownership of that consumer.
"It won't be a matter of [customers] calling
their insurance company first," says the industry veteran, who asked not to be identified because he is not authorized to speak for publication. "They'll call their dealer first, or OnStar. Or the telematics in the vehicle will notify
the dealership and/or manufacturer that the
car has been in a wreck. The first one who gets
hold of the customer should be the one who
steers or guides the customer."

Jeb Balise, center, CEO of
Balise Auto Group, visits
one of the four body
shops his New England
dealership chain operates.

"Because of costs and accreditation, it is hard
for them," Stone says. "Where those are dropping off," he adds, his shops have a higher local
profile as a result. He notes his shops are certified to fix all the new-vehicle brands Balise sells,
and some brands the group doesn't handle.
A state-of-the-art body shop is a capital-intensive investment, even after it starts generating revenue.
If the shop is to succeed, a dealer must be
committed to spending on continual training
for collision techs and for expensive new
tools. When business slows, cranked-up marketing often is needed to generate a steady
flow of body work.
Nick Notte, senior vice president at the InterIndustry Conference on Auto Collision Repair,
estimates that a 15,000-square-foot collision
center, stocked with the tools and scanners
needed to repair vehicles with such features as

But the profit potential for body shops is also big, Stone says - as much as 20 percent per
repair order. The quality of collision repair is
also a major factor in retention or defection:
I-CAR estimates that of owners who had a bad
experience with a collision repair, two-thirds
get rid of their vehicle within a year and 60
percent change vehicle brands.
Dealership body shops make money not just
from collision repair, but also from selling repair parts to local independent shops.
About two-thirds of repair parts are supplied
by automakers through dealerships, although
that share has declined slightly as sales of aftermarket and recycled collision parts have
grown.
"The investment might cause you to swallow
a little bit hard," Notte says. "But once you do it
and have the right [collision manager] in
place, with the right equipment and the right
technicians and the right training, you can be
very successful." 

JUNE 2018

PAGE 13

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