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ABP Club Survey: Tighter Repairer Margins

ABP Club Survey: Tighter Repairer Margins

Posted by Grant Georgiades on November 29, 2016.

Leading trade organisation the Auto Body Repair Club have uncovered some shocking statistics in their annual industry survey.

The ABP Club gathered feedback from 28 of the country’s largest body shops that account for £588 million in turnover across 245 repair sites.

The Club’s Chairman David Cresswell talked attendees through the results. On the surface the outlook for beyond 2016 appears positive as the collision repair specialists experienced:

84% increase in sales
69% increase in profits

The survey  found that profit margins in the body repair industry have bucked a decade long downward trend by rising to 4.4% from 3.26%.

These figures appear to provide a more optimistic vision of the future but concerns remain.  The margins in UK Body Shops are the lowest in Europe. The average repair cost of an insurance claim is £1510 – yet a body shop will make just £66 in profit.

 

The year on year motor insurance premium rises published by the leading organisations below should be another plus for repair garages:

AA 16.% increase to £585 from £503
Association of British Insurers 9% increase £440 from £402

However the ABI also revealed that vehicle repair costs have risen by 25% in the last 3 years. Inflation and more sophisticated car technology have been blamed for the steep jump by insurers. In an increasingly competitive market Cresswell fears that the increase will,

Inevitably lead to more pressure being placed on body shops
to reduce costs.

With a lack of trained staff and the higher fees being charged by accident management companies challenging times lie ahead.

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Audatex Data Body Shop Stats

Attendees at the ABP Club Convention were  given the following  breakdown of the Average Claim Repair Cost of £1510 based on research by repair workflow software provider Audatex:

£533 Labour
£317 Paint
£660 Parts

The amount billed for labour has only increased 25% in the last decade. Invoiced hours have dropped in 2016 to 15.95 from 17.41 in 2006.

In contrast, and perhaps the most startling fact in all presentations at the convention, was that paint costs have risen by 90% in the past 10 years. For many outsiders to the industry that dramatic rise is likely to prove startling.

In the last year the cost of parts has also jumped sharply by 6.3%. This figure is concerning insurers as they see the impact of improved vehicle tech hitting their bottom line.

On average 28 images are now sent during the repair process to the client. This is up dramatically from 10 in 2006 and suggests greater demand being placed on accurate estimates and quality workmanship.

 

Read more: Trends in the Bodyshop Repair Industry

 

 

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Recommended business service provider

Also at the convention Plan Insurance Brokers were announced as the ‘ABP Club – recommended business service provider’ for motor trade combined insurance.

Harry Charles, MD of Spray Tech who were winners at last year’s Night of Knights praised Plan for saving him over £15,000 on his motor trade renewal.

Marketing Director of Plan Grant Georgiades said,

We really enjoyed the ABP Club Convention and the Night of Knights Awards. The venue, positive atmosphere and professionalism of the businesses we met was incredibly impressive.

It was also great to be a part of the ABP’s membership benefits launch. We’re very proud to be the ABP’s recommended business service provider for motor trade combined insurance and are look forward to helping more members, like Spray Tech, reduce costs significantly.

Plan were very pleased to sponsor the Best Franchise Dealer Body Shop Repair group category at the ABP Club’s Night of Knights awards which was won by Swansway Group. The event recognises and promotes those within the industry that set the highest standards.

 

Follow the link to learn more about our motor trade insurance products. Our expert team of specialists will tailor highly competitive cover for you from a panel of leading motor trade insurers.

Meet the Author Grant Georgiades

Marketing Mastermind with a love of dark chocolate, Grant is the youngest of the 3 Georgiades brothers. His industry experience is applied to writing blogs on all manner of topics….. but don’t ask him anything about engines.

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