Firms in this category repair automotive tops, bodies, and interiors, or engage in automotive painting and refinishing. This includes non-factory customizing of vans, trucks, and automobiles. Firms building custom-designed vehicles on a factory basis are classified in SIC 3716: Motor Homes. Franchise operations are classified under SIC 6794: Franchises, Selling or Leasing.
Automotive Body, Paint, and Upholstery Repair and Maintenance
For almost as long as there have been cars, "scratch and dent" shops have been in business to rejuvenate them. Not long after cars became affordable for most of the public, car owners began looking for ways to "jazz up" their vehicles to suit their individual tastes. Such customizing uses the technology and expertise of the body and paint shop to convert mass-produced cars, vans, and trucks into special-use vehicles.
Although the operations must be physically separated, many body shops also have onsite painting facilities. Generally, these shops strive for a craftsman image, emphasizing quality rather than speed of delivery. Consumers, however, chronically placed auto repair shops in general, and body shops in particular, high on their complaint lists. Franchising, therefore, was an important segment of the industry, combining the small, personal craftsman image with the impact of nationally-recognized and trusted trademarks. In 2007, franchises accounted for only 20 percent of all shops and about 35 percent of all revenue.
According to Dun & Bradstreet, in 2006 there were an estimated 58,200 top and body repair and paint shops, employing 254,700 people. Together, they shared more than $14.86 billion in annual revenue. Most firms in the industry remained relatively small, employing fewer than 10 workers, many of which were owner-operated "mom-and-pop" shops.
In 1937, the price of painting a car ranged between $85 and $350 and took from six days to two weeks to complete. Then came the assembly-line paint job, pioneered by Earl Scheib Inc. of California, offering the same job for $19.95 and same-day service with a three-year guarantee. Scheib's technological innovation led to a basic division in the paint and body shop industry that continues to persist.
Small shops provided detailed precision work using high-grade materials and tools developed for the modern automobile. In the 1980s, the major auto manufacturers switched to unibody construction and metallic paint finishes. Consequently, frame straightening and quality paint application began to require specialized equipment costing hundreds of thousands of dollars. Those shops, which could not afford the massive capital investments in this technologically advanced machinery, became noncompetitive.
In 1987, more than 3,000 converters supplied specialty vans to car dealers and individual buyers. However, the product was often unacceptable to consumers, prompting Ford, General Motors, and Chrysler to establish "consignment pools" of preferred converters. That policy and increasing competition for a dwindling market share drove the number of active converters down to between 300 and 600 by the early 1990s. This number was predicted to decrease even further as larger, better-capitalized conversion firms, such as the Starcraft Corporation, forced out the craft-shops through intense price and service competition. Firms manufacturing for the consignment pool are classified under SIC 3716: Motor Homes.
Assembly lines also provided quality work by specializing in repainting and confining their bodywork services to surface preparation and minor repairs. During the early 1970s, MAACO Enterprises Inc. of Pennsylvania combined the best of both systems with its franchising concept. Instead of creating a chain of company-owned shops, MAACO used its name and national image to tie together a system of 553 independently-operated facilities in 1999. A 1997 issue of Entrepreneur magazine ranked MAACO number one in auto appearance services. MAACO claimed that they painted and repaired more vehicles than anyone else in North America. In March 1997, MAACO painted its 10 millionth car in a special...