The Top 3 Challenges for MSOs in the US After-Sales Market
Multi-site operators (MSOs) are no more prominent than in the United States (US). The American after-sales market is increasingly mature and sophisticated and worth $340+ billion. We’ve explored some key challenges facing US MSOs and their strategic and tactical responses.
1. Technician Shortage & Talent Retention
The challenge:
The industry faces a severe shortage of skilled autobody and repair technicians, especially with the rise of electric vehicles (EVs) and ADAS (Advanced Driver Assistance Systems) requiring specialised skills.
MSO response:
Partnering with trade schools, vocational programs, and apprenticeship initiatives to create a pipeline of new talent (e.g., Caliber Collision’s Technician Apprentice Program).
Offering higher wages, signing bonuses, and career growth opportunities to attract and retain skilled workers.
Implementing AI-driven estimating tools and automation to reduce reliance on manual diagnostics and repairs, lowering the barrier to entry for recruits.
2. Consolidation & Market Competition
The challenge:
The MSO sector is rapidly consolidating, with major players like Gerber Collision, Caliber Collision, and Crash Champions acquiring smaller operators. This creates competitive pressure on independent shops and mid-sized MSOs.
MSO response:
Scaling operations by acquiring strategic locations to increase market share and negotiate better DRP (Direct Repair Program) agreements with insurers.
Investing in centralised management systems (ERP/CRM) to streamline operations across multiple locations.
Enhancing brand differentiation by focusing on customer experience, certifications (I-CAR Gold Class, OEM partnerships), and service guarantees.
Raising quality standards across the network and demonstrating consistency to insurers.
3. Rising Parts & Repair Costs
The challenge:
Inflation, supply chain disruptions, and the increasing complexity of modern vehicles (EVs, ADAS) drive up parts and labour costs, squeezing MSO profit margins.
MSO response:
Expanding in-house parts procurement and logistics to reduce dependence on third-party suppliers.
Forming direct OEM and aftermarket partnerships to secure bulk discounts on parts.
Leveraging AI-driven estimating and repair process automation to reduce cycle times and labour inefficiencies.
Ensuring back-office operational functions are optimised through greater economies of scale and scope from integrating acquisitions. For example, finance, procurement and recruitment.
MSOs have recently faced rapid expansion and are typically led by entrepreneurial leaders with deep-rooted, sector-specific expertise and know-how. Whilst increased size solves several challenges, it also creates new ones. For example, if acquisitions are not integrated well, the branded customer experience and repair quality become inconsistent across the network, and diseconomies of scale emerge. This subsequently creates requirements for new levels of management or system development and so lessens potential acquisition synergies. Another, and perhaps overarching, challenge is to manage costs and sustain a more significant and hungrier organisation that produces profitable work in a market with declining structural repair volume.