The Motor Trade Association says it is concerned many in the collision repair industry are struggling to survive while insurance companies are earning record profits.
Insurance Council figures show that, in the year to September 2012, insurance company profits from commercial and private motor policies rose by $43 million over the previous year.
In the same period, the cost of claims rose only by $6.5 million.
The association says the number of panelbeaters' apprentices is falling and employers are struggling to pay workers what they are worth.
It also says repairers are required to have more advanced equipment - an extra cost they can't afford and which is pushing them out of business.
The association says 80% of the industry's work comes from insurance companies.
Advocacy and training general manager Dougal Morrison says the hourly rates negotiated between insurance companies and repairers have also remained stagnant over the last couple of years.