Current Issue
Published on July 1, 2012

SHOP FORUM: Do any dealers do auto body repair?

A shop owner in Franklin, Mass., writes:

"Hello all. Does anyone out there do auto body repair as well as mechanical? We are thinking about buying an existing auto body shop and are wondering how it's working out for everyone."

A shop owner in Farmington Hills, Mich., replies:

"I would think the general public would like a ‘one-stop-shop' to take their vehicles to. What little I do know about the collision industry is that it is a whole different animal. Talk with several collision shop owners in your state. How do they feel their industry is doing? Are the insurance companies dictating how they repair cars and at what price? There have been new EPA regulations on painting. Is the shop you're interested in compliant? Are there Google comments about this shop? And if so, are the comments good? I hope this is helpful, and I wish you luck."

A shop owner in Mattapan, Mass., responds:

"We have had both a service business and body shop for more than 35 years, and it has worked for us. Some of the keys for us have been that it is all under one roof, we have built up relationships with the insurance companies over several years and the service department and body shop feed off one another in terms of repeat customers. Each department is managed differently—the techs have a different mindset.

Massachusetts has one of the lowest collision repair labor rates in the country, as dictated by insurance companies. It seems that survival is dependent upon high volume and good cycle times. Small body shops will struggle in Massachusetts as Direct Repair Programs gain popularity."

A store manager in Naugatuck, Conn., writes:

"Our business had started as a mechanical only repair shop until 1990 when I took over. At that time, I felt our square footage could be better put to use as a complimentary service to the mechanical repair. The premise is a good one for all the reasons already mentioned (i.e. one-stop and departmental synergy); however, the start-up was longer than I anticipated. That said, if you have the cash flow to help support an underperforming department, I believe that it is a good idea.

One possibility to help shorten the start-up would be to sell your soul to the used car dealers around you, as they are always looking for discounted paint and body work. Do this only for the first one or two years and focus on converting existing mechanical customers into body repairs. It will happen, but it will take time."

The questions and responses are posted on the Automotive Management Network website, which is operated by Deb and Tom Ham, owners of Auto Centric (formerly Ham's Automotive) in Grand Rapids, Mich. The comments have been edited for clarity and brevity.

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