Our latest comprehensive report on the UK Car Body Repair Market, published in January 2019, shows the total market value for UK primary car body repairs is expected to grow by 14% from £4.75 billion in 2018 to £5.43 billion in 2023, excluding VAT.
The total market value is increasing at unprecedented levels, rising by 28.5% between December 2012 and December 2017, when the Retail Prices Index had only risen by 12.68% during the same period.
The volume demand for repairs has declined slightly over the past five years, falling slightly from 4.39 million repairs in 2012 to 4.31 million in 2017 and it is expected to remain at this level, given a minor tolerance on the 4.31 million repairs, through to 2023.
A concern for motor insurers will be combination of a slight decline in available bodyshop repair capacity and a constant demand for repairs, in particular when weather patterns and regional supply variations cause increased accident frequency rates and insufficient capacity, respectively. Any resulting backlogs will increase costs and will also leave customers frustrated.
This matter is exacerbated by a shortage of the ‘technical skills’ required to repair the burgeoning numbers of hi-specification cars, such as those with Advanced Driver-Assistance Systems (ADAS) and complex hybrid or electric powertrains, meaning motor insurers are paying a higher cost for repairs, which in turn may dent profits!
Repair organisations, such as the National Body Repair Association (NBRA), have long been highlighting the issues that the repair industry’s skills shortage brings and this is highlighted within the latest Trend Tracker report via a survey¹ of bodyshop owner/managers. Over 35% of respondents (bodyshop owner/managers) to a survey stated they view the skills crisis as their main concern – their greatest threat – as modern vehicles have become ever-more complex to repair.
“It appears that we are witnessing a perfect storm,” says Mark Bull, director of Trend Tracker and Auto Body Projects. “As repair demand remains constant whilst available capacity has declined and technical capability is at a premium, the balance of power is returning to the repair sector, many of whom are negotiating from a stronger position in regard to contractual terms.
“Gone are the days when an insurer could transfer work volume from one repair business to another to effect a better market rate; it’s now more a case of collaboration with chosen partners to secure longer-term quality capacity, and that often means the bodyshop has greater negotiating leverage around rates.”
Bull concludes: “Following our extensive in-depth research, we say this with a large degree of confidence as ‘unsustainable labour rates’ and ‘bottom-line discounts’ also remain a major concern for bodyshop owner/managers, who strive to invest in their staff, facilities, equipment and training to meet future demands.”
The report can be purchased via the Reports and Data tab on this website.