THE FUTURE OF THE CAR BODY REPAIR MARKET IN THE UK

Transcription

1 THE FUTURE OF THE CAR BODY REPAIR MARKET IN THE UK Published by: Trend Tracker Limited 116 High Street, Chapmanslade, Westbury Wiltshire, England, BA13 4AW Tel: Fax: Website:

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3 CONTENTS Page No. Section 1 Preface 1 About Trend Tracker Limited 1 Car Body Repair Research 1 Primary and Secondary Research Sources 1 Other data suppliers Methodology 2 2 Copyright Warning 2 Section 2 Executive Summary 3 Section 3 Market Background 5 Market Drivers 5 The UK Economy 6 Emerging from recession Returning to growth Slower household spending growth High household debt Households under Pressure 9 Average earnings Unemployment Consumer confidence Car Ownership Trends 12 Households and car ownership Reliance on cars Driving licence holding Annual mileage Demand for Cars in the UK 14 New and used car sales The size of the car parc 14 15

4 Section 4 Market Size and Trends 17 Total Market Value 17 Grey areas 18 Total Market Volume and Average Repair Costs 19 Section 4 - Market Segmentation 1 21 Insurance-Funded Private Car Repairs 21 Step change Non-fault credit repairs Fleet and Company Car Repairs 23 Private and Trade Repairs 23 Section 4 Market Segmentation 2 25 Labour, Paint and Parts 25 Parts expenditure Labour expenditure Paint and materials expenditure Section 4 Market Segmentation 3 29 SMART Repairs 29 A new market segment? A maturing market Sectors within SMART repair Section 5 Accident and Repair Rates 33 Car Usage and Claims Frequency 34 Total Losses 35 Weaker residual values 37 Section 6 Repairs by Vehicle Make 39 Average Repair Cost Trends 39 Repair Volume by Vehicle Make 40 Repair Costs by Vehicle Make 42 Average repair costs by make Average labour cost of repairs Average parts cost of repairs Average paint and materials cost of repairs

5 Section 6 Repairs by Vehicle Make (cont/.) Charts of Repair Costs by Vehicle Make 44 Repair Gross Margins 51 Labour gross margins Gross profit by make of vehicle Overall gross profit by make of vehicle Section 7 Bodyshop Supply Structure 55 Number of Outlets 55 Independent and Franchised Dealer Bodyshops 55 Trends in Outlet Size 57 Small bodyshops Medium-sized bodyshops Large Independent Bodyshops and Groups 59 Nationwide Crash Repair Centres Just Car Clinics Franchised Dealer Bodyshops 62 Dealer group bodyshops 63 Insurance Company Approved Repair Networks 64 Independent Bodyshop Networks 65 Network developments Network consolidation Carbodybids.com Vizion National Accident Repair Group (NARG) ECP Network Synergy Group Insurer-Owned Bodyshops 68 UKAARC Solus Other insurer-owned bodyshops Repair Capacity 69 Bodyshop Profitability 70 Labour rates 71

6 Section 8 Motor Insurance Trends 73 Market Background 73 The rise of the aggregators and the fall in profitability A commoditised market? Ancillary income Circumventing the referral ban General Insurance Trends and Profitability 76 Motor Insurance Market Trends 77 Combined ratio 78 Major Motor Insurers 78 Motor Insurance Policy Trends 80 Trends in policy premiums Usage-based motor insurance Trends in Private and Fleet Motor Claims 83 Rising Claims Costs 84 Motor Insurance Competition Investigation 85 Provisional findings 86 Potential Remedies 87 Clarification of legal entitlement Theory of harm (ToH) 1: Separation of cost liability and cost control ToH 2: Possible under-provision of service to those involved in accidents ToH 3: Market concentration or horizontal effects ToH 4: Add-ons ToH 5: Most favoured nation clauses in PCW and insurer contracts Proposed measures to increase competition 87 Challenges to CC/CMA Findings 89 Final Report 89 Disappointment with findings 89 Subrogation 90 Legal challenges to inflated subrogation costs 91 Bodyshop Own-Brand Insurance 92

7 Section 9 Bodyshop Information Technology 93 From Opinion to Standard Times 93 Computerised Estimating 93 Thatcham Times Vehicle manufacturer times Estimating Systems 94 Evidence from CMA Inquiry 95 Bodyshop Management Systems 96 Section 10 Strategic Outlook and Forecasts 99 The Economy 99 Economic outlook Sustainable growth Rebalanced economy Interest rate risk More austerity measures 99 Impact on Car Body Repairs Motor Insurance Claims 101 Market Size and Trends 101 Four-year car parc Market drivers Repair demand Market value and average repair costs Supply Structure 105 Repair Capacity 107 Technical repair capacity 109 Insurance Market Competition and Regulation 109 Bodyshops as insurers Regulation Section 11 - Appendix 111 Appendix PowerPoint Executive Summary 111