Collision repair isn't a monolith and it requires a blend of approaches compared to other industries. While consolidation has transformed many industries by delivering cost efficiencies and market power, collision repair keeps breaking the pattern and exposing the limits of scale-first thinking.
Collision repair isn't a monolith and it requires a blend of approaches compared to other industries. While consolidation has transformed many industries by delivering cost efficiencies and market power, collision repair keeps breaking the pattern and exposing the limits of scale-first thinking.
Since late 2023, private equity firms have pumped over $9 billion into the sector. Yet despite the cash infusion, 2024 saw 800 single-location shops close their doors, many without an exit. Market dynamics have shown that scale alone doesn’t guarantee success in collision repair.
That collapse wasn’t just financial, it was operational. As consolidation intensified, the labor pipeline thinned, margins compressed, and complexity outpaced capacity. Today, the technician shortage continues to worsen. The problem isn’t scale. It’s scale without capability.
In this context, the real advantage in collision repair isn’t footprint, it’s fidelity. Footprint refers to shop count. Fidelity means staying true to OEM standards, cultural continuity, and operational integrity. Just as vehicle complexity, insurer dynamics, and OEM standards have changed the work, so too must they change the strategy.
Collision repair is no longer about spreading fixed costs across more locations. It’s about developing, integrating, and sustaining capability across an increasingly demanding system. Scaling for volume alone leads to collapse. What the industry now demands is capability-building, not just capacity expansion.
Market challenges have demonstrated what happens when financial engineering outpaces operational readiness. Rapid expansion driven by outside capital has repeatedly created the illusion of success, even as core systems struggled to keep up. Eventually, mounting debt, missed projections, and operational strain exposed the underlying fragility. Emergency cash infusions weren't enough to salvage equity.
As consolidation intensified, the technician labor pool shrank, margins compressed, and repair complexity soared. Scale became synonymous with strain rather than strength.
Meanwhile, more disciplined operators—those who invested in internal systems and operational depth—maintained healthier financial ratios and long-term viability. Strategy and structure go hand in hand.
Different operators have taken different approaches, with varying results based on their strategic focus. For many smaller operators caught in the middle, the result was closure. Unless strategies change, the same behaviors will keep producing the same outcomes.
Here’s the paradox: just as MSOs attempt to standardize and simplify, the work itself demands deeper specialization. ADAS, EVs, OEM procedures, and new materials have shifted the skill burden dramatically. Repairing a 2023 model vehicle is not like repairing a 2013 model. Calibration systems can cost up to $500,000 per location. EV repairs require over 90% OEM parts. The average labor hours per repair continues to climb. Technicians know this. So do insurers.
Valuation tells the story. Shops with extensive OEM certifications can now command 6.5x EBITDA multiples. Volume-driven MSOs are stuck at 3x–4.5x. Investors are rewarding specialization over size. This creates an unavoidable strategic choice for consolidators: double down on standardization and fight the complexity, or embrace it as a competitive differentiator. The market data suggests which path creates more value.
The industry is splitting.
On one side are MSOs treating shops as cost centers. They seek optimization through uniformity, often at the expense of technician autonomy, procedural rigor, and cultural continuity. Their growth is acquisition-led. Their risk is integration-fueled.
On the other side are capability builders—regional MSOs and forward-looking consolidators who prioritize training, certification, and integrated workflows. Their growth is steadier, their margins are stronger, and their technician retention rates are higher.
This first group often treats cultural continuity as expendable. But when shops retain their identity and internal cohesion, cultural continuity creates both employee retention and operational leverage. When technicians trust their leadership and processes, quality consistency becomes scalable. Strip that away in pursuit of standardization and shops lose more than morale, they lose the operational knowledge that makes high-quality repairs repeatable.
While some high-growth players appear to be scaling rapidly, the evidence suggests that growth is often acquisition-driven rather than the result of internal capability-building. Training and certification may play a supporting role, but they’re not always the strategic foundation. By contrast, shops with deeply embedded OEM specializations and high technician engagement—like those in QCG’s portfolio—demonstrate how capability-led models perform when structure and skill align. Understanding both the human and market dynamics helps explain why certain business models better align with the realities of modern collision repair.
Quality Collision Group (QCG) offers a capability-first model tailored to the demands of modern collision repair. Founded by former technicians and shop owners, QCG is building a capability-first MSO with a selective acquisition strategy and a long-term operational view. Rather than scaling at the expense of culture, QCG protects the craft through structural practices that reinforce what made each shop valuable to begin with.
As EVP Blake Farley explains:
“I was open with the team on the possibility of us growing and taking on another partner, but not betraying our vision or walking away from our soul or losing our North Star direction on where we were headed as a team.
That was the wonderful thing, that QCG not once discouraged us. [They’re] the guys that are gonna augment you and say, ‘Hey, we’re gonna step right in line with you. We only do it one way. We know that you only do it one way. If there’s anything we can do to assist you, better your business, let us know. We’d love to help.’”
That culture of continuity—led by people who know the work—translates technician realities into system-wide structure. Farley continues:
“My personal experience with my team when we joined QCG, we were operating more profitable because we got to work with some of the top echelon in the collision space, comparing notes; now we’re on the same team. Profitability was one of the key pieces that we discovered.
The soul of the team was even more emboldened because the team got larger and there was more people on the team that thought just like we did. So we gained a lot of momentum there, we shared a lot of stories, and we got to influence those guys as well to show those guys, ‘hey, this is what we’re doing down here. This is what we’re seeing that’s effective, here’s some negotiation tactics.’
Year over year we are going to separate ourselves from those that are focusing on ‘get the car in and get it out’ versus ‘repair the car properly, then all else will fall in line.’”
The QCG model is grounded in operational realism, not abstract corporate theory. Five principles make that structure explicit:
While it’s too early to declare which models will stand the test of time, QCG’s approach is coherent, grounded, and purpose-built for the realities of the modern shop. In an industry where surface-level transformation often disguises strategic drift, QCG is doing something rare: building the foundation for what lasting excellence actually looks like.
The failure of traditional consolidation models reveals a fundamental misread of what collision repair demands in 2025 and beyond. As complexity deepens and capability gaps widen, the real risk isn’t operational variance, it’s scale lacking substance.
The market is already separating operators who treat complexity as a cost from those who leverage it as a competitive advantage. QCG represents one path forward, but the broader question facing every operator is strategic: will you build for a commodity future or for the capability-driven market that vehicle technology requires?
The accelerating divide between cost-center consolidators and capability builders is more than a strategic fork in the road. It’s a litmus test. Operators who embed capability into their foundation—instead of scrambling to retrofit it at scale—are the ones who will define what collision repair becomes.
09/08/2025
References
CCC Intelligent Solutions – Crash Course Q3 2024 Report
FenderBender – Methods to Help You Value Your Shop Accurately (2024)
Focus Advisors – 2024 Year-in-Review and Consolidation Outlook (2025)
Romans Group – Annual Collision Repair White Paper (2025)
Repairer Driven News – Industry Insights on Private Equity and Market Dynamics (2024–2025)
