BODYSHOPS urgently need to restore profit margins or the industry faces collapse, the Vehicle Builders and Repairers Association has warned. Ron Nicholson, director general of the VBRA, said four of the association's members had gone out of business this month, and more would follow unless major steps were taken to improve hourly labour rates and reduce external costs.

Foremost among these costs are courtesy cars, repair estimating systems, and arrangements between insurers and paint suppliers which require bodyshops to operate multiple paint systems to satisfy different work providers. Nicholson said repairers should be able to select the paint company with whom they wish to do business, that the industry should establish a single standard estimating system, and that the cost of providing courtesy cars should be tackled immediately.

David Wallace, managing director of Acoat Bodyshop Services, said a dialogue had to begin between the insurance and repair industries which looked at retaining profit for bodyshops while containing costs for insurers. He said the focus on labour rates was far too narrow because repairers face very different costs depending on location and the size of the business.