Reinventing Dealer Body Shops

April 1, 2010
Body shops at dealerships facing closure are reinventing themselves.

When it comes to business, “roll with the punches” could be Bill Pratt’s motto. Pratt, the owner of Southeast Automotive in Nashville, used to do business as Southeast Chrysler Jeep Dodge, until he lost his franchise last year. But you won’t find him hanging his head, or shutting his doors. That’s because he reinvented his business: Pratt now focuses on selling used cars and has rebranded his collision repair shop as a Napa AutoCare Collision Center location. “We have their signs, sell their parts and get their support,” he says. “We like it.”

For many dealership-based body shops, such reinvention is the key to staying in business these days. After all, nearly 2,500 dealership rooftops have closed in the past two years, according to the National Automobile Dealers Association, and a recent report from the organization shows that only 36 percent of new-car dealerships had body shops in 2008, a decline from 2007.

Denise Caspersen, manager of the collision division at ASA, understands why: “One reason body shops aren’t at every dealership is [that many] haven’t found a good way to make them profitable,” she says. “But if a body shop is successful in providing quality repairs, has great standard operating procedures and is making a profit, it’s definitely in their best interest to continue what they’re doing.”

The body shop at Vic Jenkins Automotive, formerly Vic Jenkins Chevrolet in Gallatin, Tenn., fits that description. Owner Scott Jenkins transitioned to being a used-vehicle dealership, and his 25,000 square-foot collision repair center remains part of that operation. “We have a good following in service and collision repair, we have the largest collision repair center in the area, and we’re a direct repair facility for most of the major insurance companies,” he says.

Jenkins made an arrangement with a large GM dealer in Nashville to stock GM parts. He’s now marketing the body shop as an “all makes, all models” operation. “We’re still the same shop, with the same employees, doing the same quality work,” he says.

Even some dealerships that have completely closed remain hopeful that they can reinvent—or reincarnate—themselves. Gina Russo, of Lochmoor Chrysler-Jeep in Detroit, shuttered the dealership last October after losing her franchise.

Today, she’s looking forward to the arbitration process and getting a chance to reopen. “Our body shop would be part of that going forward process,” she says.

Even body shops that do manage to reinvent themselves face challenges. As Pratt discovered, changes need to be made in terms of parts and signage. Dealerships in wind-down mode can still do warranty repair work, but the affiliated collision center won’t be able to rely on that source of income after the wind-down period ends.

Despite the challenges, Pratt considers the change a blessing in disguise: “We’ve found that selling used cars and operating a full-service parts, body shop and service department is actually easier and more profitable, with [fewer] headaches.”

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