A number of years in the past, Corina Diehl — proprietor of Diehl Automotive Group — determined to roll the cube and construct a 26,000-square-foot standalone collision heart in Pittsburgh.

The ultimate price: About $2.5 million.

The calculated gamble has changed into a smashing success. For the reason that Diehl Collision Middle opened in October 2019, annual income has elevated by double-digit percentages, regardless of the pandemic, which hit full drive quickly after its opening, Diehl stated.

In 2020, the primary full 12 months of operation, the middle generated a mean of $243,000 in gross sales per thirty days. In 2021, common month-to-month income rose to $326,000 — a 34 % enhance in contrast with 2020. In 2022, common month-to-month income elevated to $412,000 — a few 26 % bounce over the 2021 determine, Diehl stated.

The middle already is booked out for repairs by midsummer, she added, as are six different collision-repair services owned by the auto group, which operates 21 shops in Pennsylvania and Ohio.

“It has been loopy,” Diehl advised Automotive Information. “I might say the middle has exceeded our expectations.”

The collision heart’s success affords a blueprint for sellers fascinated about creating new income streams and diversifying into providers with excessive revenue margins. There’s not a lot competitors from different sellers for collision-repair providers. Solely about 35 % of the 16,752 franchised dealerships nationwide do bodywork, in line with the NADA Information 2022 midyear report.

Furthermore, that quantity has been slowly declining since 2017, when it reached 39 %, in line with the report.

There is not any must persuade Diehl concerning the inherent potential. Actually, the collision enterprise has been so profitable that over the last three years, the Diehl group bought three extra car-repair retailers in suburban Pittsburgh — unbiased outfits whose house owners needed to retire. The group owned three medium-size restore retailers earlier than it constructed the Pittsburgh heart, Diehl stated.

“The acquisitions made sense as a result of all three shops have been worthwhile. And when it comes to comfort for our prospects, they gave us a very good geographical circle of retailers situated round our Pittsburgh-area dealerships,” she stated.

The collision heart advantages the auto group in different areas as nicely. For starters, the dealerships can promote elements to the collision facilities. Whereas Diehl could not pin down the income generated by promoting elements to the restore facilities, she stated there isn’t any doubt that total elements gross sales have elevated considerably because of this.

As well as, the collision facilities function a springboard to new-car gross sales.

“We have already had about 30 vehicles declared complete losses this month,” Diehl stated in January. “In order that’s 30 individuals who we are able to introduce to our salespeople and attempt to promote them a brand new automobile.”

Providing collision repairs additionally diversifies the corporate’s service choices and makes it extra handy for patrons preferring to keep away from the effort of going someplace else for repairs, she stated.

“It makes us a full-service one-stop store, which helps us take full care of our prospects,” Diehl added.

An array of things contribute to the collision restore heart’s success. For starters, the corporate already owned the land the place the middle was constructed, which is an enormous benefit given the excessive price of actual property.

Then there’s the power itself, which options 20 collision-repair bays, two heated downdraft paint cubicles, two heated paint stations and 4 estimating and supply bays. The spacious facility is designed to maximise effectivity, Diehl stated.

Technicians are licensed to work on nearly all manufacturers of vehicles, together with a twin certification from electric-vehicle startup Rivian to work on each electrical vehicles and electrical fleet vans. The collision heart is the one dual-certified Rivian facility in western Pennsylvania, Diehl stated.

“Getting technicians OEM-certified is pricey, and a few manufacturers are costlier than others,” Diehl stated. “Nevertheless it’s nicely well worth the expense to have the ability to deal with extra prospects.”

Different circumstances have additionally generated income development.

The brand new-car scarcity, for instance, has helped goose gross sales as a result of shoppers are opting to restore their automobiles as an alternative of shopping for new ones, Diehl stated.

“We have additionally been profitable as a result of we do high quality work, we’ve got the appropriate crew in place and the Diehl model is well-recognized within the Pittsburgh space,” she stated. “We have constructed up an excellent status.”

Aggressive pricing has contributed to success as nicely.

“We do quite a lot of value purchasing to make certain we’re aggressive within the market,” Diehl stated. “We continually monitor that and do the identical in our service departments.”

The collision facilities supply a five-year assure on repairs, which differentiates them within the market, she stated.

Regardless of the middle’s success, it wasn’t all seashells and balloons initially. After the pandemic started, automobile insurance coverage collision claims dropped as enterprise lockdowns dramatically decreased the variety of automobiles on roadways.

“It was a scary time,” Diehl stated. “We took in much more fleet-repair work to get by it. We reached out to everybody and anybody for enterprise — did every thing we may to tug vehicles by the doorways — and discounted our costs.

“Nevertheless it labored,” she stated. “Automobile sellers are superb on the survival recreation.”

The continued elements scarcity makes working a collision heart tough. Some automobiles have been stranded at Diehl services for as much as three or 4 months. Loaner automobiles are arduous to return by, too, Diehl stated.

Common communication with prospects helps ease their frustrations, she added.

Given the labor scarcity and extra particularly, the dearth of certified technicians within the auto trade, it is easy to imagine staffing the brand new heart — which employs 16 individuals — additionally could be a problem. However that wasn’t the case, Diehl stated, noting the brand new facility made recruitment simple.

“A brand-new facility makes it simpler to draw new expertise,” she stated. “Guys who’re working in dumps get excited once they see our superb service bays with 18 toes of labor house up above.

“We’re additionally a family-owned auto group, which I feel makes it simpler to search out staff,” Diehl stated. “I nonetheless stroll by my retailers and discuss to staff and maintain crew lunches with technicians with out the service managers current.

“I am very accessible and might help them by making adjustments,” she stated. “The enter I get when managers aren’t within the room may be very efficient.”

To seek out staff, Diehl stated the corporate makes use of job recruitment platforms resembling Certainly.com, and works with a community of device vendor representatives who know technicians. Technicians referring candidates who get employed are rewarded with bonuses.

The corporate works intently with native vocational and commerce colleges to determine job candidates, and supplies technicians with a brand new set of instruments, valued at about $9,000.

“It takes quite a lot of monetary stress off them,” Diehl stated.

Technicians should stick with the corporate for 3 years earlier than they will go away and take the instruments with them, she added.

Diehl was on Automotive Information’ record of 100 Main Girls within the North American Auto Business in 2020. What recommendation does she have for different sellers who could be contemplating coming into the collision-repair area? For starters, rent a supervisor who is aware of the restore enterprise in and out.

“It is an enormous funding, so it’s important to put somebody in cost who understands the collision enterprise,” Diehl stated.

“It might’t simply fall underneath an current supervisor’s job obligations.

“It is a distinctive enterprise, not like gross sales, elements and repair,” she stated. “So if you do not know what you are doing, it will bleed you to dying financially.”

Simply as importantly, sellers should wholeheartedly embrace the collision enterprise, not simply dabble in it, Diehl stated.

“It’s important to lean in arduous,” she stated. “Do not do it midway.”