BofA cites weak volumes as auto refinish coatings demand slumps

Investing.com - Bank of America reports that auto collision repair volumes remain depressed, with sales at Quality Collision down 12-14% in April and May as insurance claims continue to decline and the industry struggles to recover from cyclical lows.

The firm hosted a call on Thursday with Matt Robbins, former COO of Quality Collision, a multi-site operator with over 100 locations and approximately $425 million in revenue. Robbins said average wreck severity has risen from $4,500 to $5,500-$6,000 over the past five years due to input and labor inflation and increased parts complexity. Higher scrap values for vehicles have pushed total loss rates to nearly 24% of claims, reducing the number of cars that get repaired in the U.S.

Advanced driver assistance systems are expected to reduce accident rates over time, but ADAS-enabled vehicles represent only about 30% of registered vehicles given the average age of the U.S. car fleet. Robbins said roughly 60% of drivers with ADAS features have at least one turned off. The technology is most effective at reducing front and rear-end collisions by 50%, but these account for only 5-6% of insurance claims.

Quality Collision in January 2026 selected PPG Industries (NYSE: PPG) as its refinish paint provider after a competitive bidding process that included incumbent Akzo Nobel and Axalta Coating Systems (NYSE: AXTA). Bank of America estimates the win will boost PPG's refinish sales by 2%. Robbins noted that while AXTA can offer potential savings, execution requires tighter process controls that have caused friction at past shops.

Sherwin-Williams (NYSE: SHW) has improved its offering most over the past five years, according to Robbins, particularly in reporting and analytics tools that help multi-site operators manage costs and productivity. The firm noted Sherwin-Williams is gaining share, including some new traction at Caliber from a switch away from Akzo Nobel.

You May Also Be Interested In

• Upwork secures $150M revolving credit facility with Bank of America
• Alphabet added to Dow Jones Industrial Average, Verizon dropped
• NNN REIT exercises $200M term loan option, cuts borrowing costs