UK bodyshops ‘losing £240m per month’

The UK collision repair sector is estimated to be losing £240m in revenue each month as a result of the coronavirus pandemic, according to new research by Trend Tracker.

The day after the government extended the lockdown for a minimum of three further weeks to assist in controlling Covid-19, the automotive industry research specialists also revealed that motor claims notifications had fallen by more than 70% in recent weeks.

The result of this decline in volumes is seeing bodyshops either continue to operate at approximately 30% of normal capacity or shut their doors completely. The research, conducted in association with the National Body Repairers Association (NBRA) and ARC360, calculated the average bodyshop in the UK is currently losing somewhere in the region of £16,000 per month.

Mark Bull, managing director of Auto Body Projects and Trend Tracker, said: “For the accident repair sector, it has long been recognised that bodyshops operate on a marginal profit, requiring a high volume of work to maximise their available capacity. When volume and, in turn, revenues to UK bodyshops have fallen by over 70%, it becomes extremely difficult.

“In short, current terms of business between motor insurers and body repairers are not sustainable. There will inevitably be business casualties, but the post-pandemic trading environment could also provide positive opportunities for surviving bodyshops, in particular when it comes to customer relationships.

“Bodyshops and insurers have a unique opportunity to better understand their respective positions and to reset the terms of business, with a view to providing safe, quality repairs and an excellent customer service,” said Bull.

While bodyshops are facing the crisis head-on, insurers have their own challenges with cars parked-up and UK road travel plummeting by more than 70%.

With annual premiums paid, UK motor insurers are coming under increasing pressure to return millions of pounds to policyholders.