Repair shops today are in a unique and challenging spot, where tech meets tradition, as the industry is gears up for big changes ahead in 2024.

In 2023, the industry faced unprecedented challenges –– from labor shortages to the growing demand for efficiency and consolidation. We recently sat down with industry expert and consultant, Mike Anderson of Collision Advice, who shared some predictions on the future of collision repair, and here’s what he had to say:

1. Labor Shortages: A Roadblock in the Repair Process

Labor shortages were a hot topic in 2023. As many of our colleagues consider retirement, there are fewer entry-level technicians to fill these roles, creating a significant talent gap. This shortage not only hampers the speed and quality of repairs but also puts immense pressure on existing employees.

While the repair technician shortage took the main stage this year, the shortage of administrative personnel is a new challenge the collision repair industry will face next year.

• In 2024, shops are likely to intensify their efforts to attract and retain both skilled technicians and administrative staff. From offering competitive wages and benefits to investing in comprehensive training programs, the industry is set to prioritize talent acquisition and development.

Collaborations with educational institutions and vocational training programs may become more commonplace to nurture the next generation of collision repair professionals. And as the labor shortage continues, shops will need to consider using software solutions to automate repetitive tasks.

2. AI Technology: Driving Efficiency and Precision

AI is expected to play a pivotal role in making shop employees more efficient and streamlining repair processes. Advanced AI systems can assist technicians in diagnosing and assessing damages, thereby reducing the time required for manual inspections.

Predictive maintenance powered by AI algorithms can also become a staple in collision repair shops. By analyzing historical data and identifying patterns, AI can predict when equipment and tools are likely to require maintenance, minimizing downtime and enhancing overall operational efficiency.

• In 2024, we’ll see more AI-driven automation to revolutionize administrative roles within collision repair businesses. From appointment scheduling and inventory management to customer communications, AI-powered systems will begin to handle more routine tasks, allowing administrative staff to focus on more complex and strategic aspects of their roles.

As a force multiplier, AI is best when combined with human intelligence, empowering shop employees to work more efficiently and effectively. The collision repair industry is poised to embrace AI not as a threat but as a strategic ally in the pursuit of excellence.

3. Industry Consolidation: The Rise of Mid-Tier Multi-Store Operators

As the industry grapples with increased competition, rising operational costs, and the need for advanced technology, smaller independent shops will continue to be challenged to thrive in isolation. Mid-tier MSOs, with multiple locations and the ability to leverage economies of scale, are primed to capitalize on these challenges, increasing the pressure on remaining independents. To remain competitive, independents will need to focus on creating extraordinary customer experiences, from speed-to-respond to highly personalized services.

• In 2024, we can expect to see further consolidation within the industry with the rise of mid-tier MSOs, allowing them to centralize administrative functions, share resources, and implement standardized processes across multiple locations.

This consolidation not only enhances efficiency but also positions these operators to invest in cutting-edge technologies and training programs that may be financially unattainable for smaller, independent shops.

Additionally, the rise of mid-tier MSOs could lead to increased collaboration and partnerships within the industry. Strategic alliances may emerge as a means of pooling resources and expertise, fostering a sense of community among collision repair businesses.

For mid-tier MSOs and independents alike, revenue growth in 2023 will be critical as operating costs continue to rise.

That's a Wrap On 2023

As the collision repair industry navigates the twists and turns of 2024, the road is marked by both challenges and opportunities. Shops that embrace innovation, invest in talent, and foster collaboration will be best positioned for growth and success in the future.