By Mike Davey
Hamilton, Ontario — March 21, 2017 — Collision repair industry consolidation has been playing out in Canada for the last 20 years. According to the results of our latest reader survey, consolidation is going to continue to impact the Canadian collision repair industry.
Consolidation can be either a saviour or a boogeyman for facility owners, depending on how they think it will impact their business. Our next survey focuses on a somewhat lighter topic, that of colour matching tools. You can take the colour matching survey here.
Looking at the landscape of respondents may help to illuminate their answers. The majority of the shop owners and managers who responded to this survey are independents. About 67 percent of total respondents identified themselves this way. A further 27 percent of respondents indicated they were owners or managers of a banner, network or chain shop. The remaining 6 percent of respondents come from various roles within the industry, primarily shop staff.
Opinions vary on how long further consolidation will take, according to respondents to our survey. A sizable minority of our respondents (29 percent) believe that collision repair business is still fragmented compared to other industries and consolidation will proceed much as it has in previous years. The majority (67 percent) believe that consolidation will also continue, but at a slower pace than in previous years.
The final four percent of respondents were roughly evenly split between “Not Sure” and “Other.” One of the “Other” respondents may have summed up the feelings of many independent operators with the comment they left: “I HOPE NOT!”
The survey also offered respondents a chance to choose “No, the industry is at peak consolidation.” Not one respondent chose it.
Respondents who indicated that they were managers or owners of a banner, network or franchise shop were asked “How has consolidation changed the culture and/or operations within your facility?” Please note that respondents could choose more than one answer, so the percentages given in the chart below do not add up to 100 percent.
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Next, the survey looked at whether consolidation had been good, bad or indifferent for various groups. First, we asked about the impact on the collision repair industry as a whole. A minority believe it to be good, but the minority is a large one (41 percent). A slightly larger number of respondents believe it to be bad for the industry as a whole (45 percent). The smallest group (14 percent) believe consolidation is essentially indifferent regarding its total impact.
We also asked the same question, but in regards to its impact on motorist and the insurance industry. The results from the motorists question were very similar to the results regarding the collision industry. The same cannot be said of its impact on insurance companies.
A full 77 percent of respondents indicated that consolidation has had a positive impact on insurance companies, with 10 percent indicating it had negative impact. The remaining 13 percent think consolidation has largely had no impact on insurers.
Next we asked respondents to consider consolidation in related industries: insurers, jobbers and suppliers and the coatings companies. In all cases, the majority of respondents believe we’ll see consolidation in these areas as well.
Looking at the insurance industry, 24 percent believe we’ll see more consolidation in the next six months. The remaining 76 percent also believe we’ll see consolidation this area, but that it will take longer to play out.
We’ve already seen quite a bit of jobber consolidation in the last year, but 11 percent of our respondents aren’t expecting significantly more in this area. They are, however, in the minority. Another 19 percent believe we’ll see jobber consolidation over the next six months. The majority of respondents (70 percent) think jobber consolidation will take longer.
Looking at coatings manufacturers, 53 percent of respondents believe we’ll see consolidation over the next few years. A further 21 percent think we’ll see this happen within the next six months. The minority (26 percent) think we won’t see much, if any, consolidation among coatings manufacturers.
Collision Repair magazine’s next survey focuses on colour matching tools. You can take part in the survey at this link.
