Fixed Ops Journal - October 2022 - F10

FIXED OPS JOURNAL
The complexity of the collision repair business is
growing due to the proliferation of electronics.
REPAIR
continued from Page 9
them under our umbrella and really make a
positive experience for them, we chose to
keep ours open at this point, " she says. " Our
customers know that if they get into an accident,
they can call somebody they know and
trust. Th ey've built a relationship with their
salesperson and their service adviser, who'll
get them into the body shop. "
But she acknowledges there have been disruptions
in the last couple of years, such as parts and
technician shortages and supplier issues that
have made collision repair more challenging.
Jensen says the store now has a strategy
aimed at solving one of the most pressing issues
facing all body shops - recruiting technicians
and painters.
" In service, we have a trainee with almost
every tech. Now we are putting trainees with
the body shop techs, " she says. " We are aggressively
growing our own. "
Mike Anderson, owner of Collision Advice,
says Bowman is making smart decisions.
" For dealerships, their knowledge base is
PAGE 10 OCTOBER 2022
more on the sales and service side - and a
body shop is not really their area of expertise, "
Anderson says. " But getting out of collision repair
is a huge mistake. Dealers should embrace
collision repair and educate themselves
on how to run that business.
" It's a huge opportunity, " he adds.
Anderson says automakers will drive collision
repair business to dealerships by using
the data they collect from vehicles through
such systems as General Motors OnStar service,
which can automatically direct a
wrecked vehicle to a certifi ed GM dealer for
repair - a notion echoed by CCC's Gotsch.
Other reasons to stay in the collision repair
business, he says, include:
 Consumers trust dealers to fi x cars more
than they do independent shops.
 43 percent of vehicles brought in for regular
service need some kind of bodywork.
 Collision repair helps dealers protect their
brand by not sending customers elsewhere to
get their vehicles fi xed.
Most dealership and independent body
shops are booked from two weeks to four
months, he says, and even a small dealership
collision center could easily book $3 million
to $4 million in annual sales, with gross profi ts
of more than 40 percent and net profi ts of
well-run shops hitting 15 percent.
Each dealership has to make its own decision
on how much it wants to invest in collision repair
to chase those profi ts, consultants say.
After years of struggling, Baxter fi nally
turned around its body shops and made them
profi table, Quinn says. But the net profi ts were
still lower than Baxter's competitors.
" We were watching the industry statistics on
body shops and we were missing about 5 percent
net, " he says. " We were netting about 10
percent. If you look at body shops, they usually
do between 12 and 17 percent.
" So, if we are doing 10 percent, 15 percent to
17 percent is about a 50 percent diff erence in
the bottom line, " he adds.
Because Baxter owns a percentage of the
three shops it sold, the group's net profi ts from
collision repair are higher now than before it
sold, Quinn says.
" We don't have the headache, " he adds, " but
we're getting more income from these stores
than when we were running them. " 
Fixed Ops Journal - October 2022

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