STORY SHOP CONSOLIDATION: Where Do We Go from Here?
After nearly 35 years at the helm of Precision Collision in Lorton, VA, Robert “RT” Plate knew the importance of staying on top of industry news and trends. Although he was aware that consolidators were entering his market, he originally had no desire to sell the enterprise he had spent decades building. But all that changed when he received offers to sell from three different companies around the same time. Ultimately deciding he was ready for a new career path in order to spend more time with his family, Plate sold his shop to Service King in February 2016. Like Plate, Maryland industry mainstay Bill Denny never intended to sell his business to a consolidator. However, a family illness
prompted him to reevaluate the future of his long-running shop, Bill Denny’s Automotive, Inc. (Havre de Grace). In November 2015, he sold his popular facility to Caliber Collision. These are just two examples of the growing presence of consolidators in the WMABA community – a trend that is forcing even the most successful independent shop owners to reconsider their standing in the industry. But if you believe that the sky is about to fall for independent repair businesses, take a deep breath. Although Denny is confident that the decision was the best one for his family under their circumstances, he believes that independent shops still have great chances for success in this new age of consolidation. “If they’re a small operation probably doing $1 million to $1.5 million, they can probably survive if they have a good customer base. But they have to be extremely good with customer service and CSI.” Denny also feels that location will play a big part in an independent’s ability to exist down the road. “If you’re out in the outlying areas, I don’t think you’re going to have the same problem [as metro-area facilities] because the consolidators are not going to come out into rural areas and buy shops. That’s not their footprint; that’s not their plan.” Despite saying goodbye to his flagship business through the Service King deal, Plate remains active in the industry and continues to run Global Glass, the Lorton-based automotive company he launched in 1999. Now armed with plenty of personal experience with the consolidation process, Plate has some words of advice for shop owners who want to keep their facilities. “If you don’t have a marketing plan, you’re going to be left behind, period.” Before selling Precision Collision, Plate worked with automotive industry marketing specialists Absolute Perfection Media in developing a customer outreach campaign that included a successful presence on YouTube. This effort resulted in a 20-percent increase in Plate’s business – strong proof that forward-thinking shops can grow in the market without a consolidator. What are some other ways that independent shops can continue to grow in a consolidated environment? According to figures from the Autodata Corporation and the Certified Collision Group, 63 percent of all vehicles sold last year in the US were part of a certified collision repair program – that’s over 11 million vehicles of the 17 million sold. Additionally, industry analysts predict that auto manufacturers will control 80 percent of the repair market by 2019. Naturally, OEMs are going to need plenty – in fact, thousands – of certified repair facilities to handle this demand. This could open the door to new business opportunities for entrepreneurial repairers.
Official Publication of the Washington Metropolitan Auto Body Association (WMABA)