Car Dealer Insider Oct 15, 2008
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Car Dealer Insider Oct 15, 2008

More car dealers going back to the body shop to find profits

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More car dealers going back to the body shop to find profits

_News item: Criswell Performance Cars of Annapolis will be opening a new $7 million body shop this fall.

Source: The Capitol, Annapolis

_News item: The Harte Auto Group with a number of dealership locations, mostly in Connecticut, will increase the size of its body shop in Hartford from 1,800 square feet with a newly renovated space of 25,000 square feet - previously the location of their Suzuki store. The cost of the Harte body shop is reported to be $3 million.

Source: The Hartford Courant


What do these dealers know that other franchised car dealers don't? They know that body shops don't have to be money losers. Well planned and well managed body shops can be extremely profitable. After all, those independent collision repair centers that occupy prime real estate in every U.S. market couldn't stay there year after year unless they knew how to make money at it.

Only an estimated 40 percent of franchised dealers operate body shops these days, down considerably from only a decade ago. What was behind the demise of dealership body shops? A perception that the insurance companies dictated the terms under which the collision repair shops could operate to such an extent that dealers could not make a profit.

What's changed? Smart dealers have figured how to re-draw the collision repair business model in such a way that they can both accommodate the insurers and make money, surprisingly good money. And that doesn't include the ancillary parts and service sales and the elimination of sublet work.

Outsourcing options

But getting back into the body shop business or expanding a small operation into a much larger one, requires a leap of faith for dealership owners, one that many dealers are reluctant to take. After all, getting the insurers on your side is by no means a sure thing.

To help spread the risk, a growing number of franchised car dealers are... (319 of 1275 words)

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