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“The collision repair industry is in constant change,” said Russ Verona the moderator of the NACE congress session entitled International Issues in Collision Repair. One change that has evolved through time is that this is truly a global industry.
In Sunday's session, which was a panel discussion format, it was evident that collision repair, regardless of where it is practiced, has many common issues and concerns about the future.
Direct repair programs (DRPs) are having a defining influence on collision repair in Australia, said David Newton-Ross of Netwon International Marketing. There are 20 companies providing auto insurance in that nation. Of those, two write a large majority of Australia's policies and those two companies virtually control their approved shops because those shops rely on them for survival. The insurance companies, Newton-Ross said, provide work to the shop and, in turn, seek concessions.
Paraphrasing the 1960's folk song, “Where Have All the Flowers Gone?” Newton-Ross addressed another industry concern with the question, “Where Have All the Children Gone?” Finding young people interested in collision repair is difficult in Australia, he said.
“We're competing with other industries. People don't want to get their hands dirty. They think our industry is polluted,” Newton-Ross said. However, a very good apprentice program is in place that offers hope for the future, he said.
The Technical and Further Education (TAFE) program incorporates both classroom and shop experiences for youth interested in entering collision repair. At the completion of the three-year program, students earn a professional accreditation in collision repair. Still, Newton-Ross said, they are losing some of these students to other industries.
In the United Kingdom (UK), repairers and insurers have a difficult time relating to one another, said Michael Monagham, managing director of the Motor Vehicle Repairers Association (MVRA).
The MVRA was formed in 1988 to bring both entities -- collision repair and insurance -- together to establish better working relationships. Their success in achieving this objective has been limited. “Both believe their priorities and concerns should be represented exclusively,” Monagham said.
Currently in the UK, there is an oversupply of body shops. Insurers, he said, are using this to their advantage because shops are dependent on insurance work for survival. Insurers direct work to shops that are willing to give concessions.
Looking forward, Monagham believes the global repair industry can anticipate Internet claims processing, more outsourcing, a shortage of skilled workers, and an increase in Insurer-owned shops.
Roger Foss, national body shop development/technician recruiting manager with Toyota Motor Sales USA, said the automaker's worldwide objective is to integrate body and paint into their total customer service program as an added incentive to retain customers.
To accomplish this, Toyota wants to establish a network of repairers with high standards, expand training for both dealer personnel and approved Toyota service center personnel, attain the highest possible number on customer satisfaction rankings, and improve environmental issues.
Turning from Toyota's global market to the United States, Foss said, “Quite frankly, we're so far ahead of the other OEMs that it amazes me.”
Toyota has a program for technician recruitment and development that can be summarized as “grow your own,” he said. Toyota works to recruit the right people with the right abilities then provide them with the training their job requires. “The best employees are those we train in the Toyota system,” Foss said.
“As an industry, we've done a pretty poor job in communicating the career opportunities that exist in automotive repair,” he said. Through its involvement with technical schools and the Automotive Youth Education System (A-YES), Foss said Toyota is working to educate today's youth about the opportunities available to them in this industry.
Tom Mack, the executive vice president of I-CAR International, said I-CAR developed on “outward vision” two years ago that focuses on the “ideal state” of the industry.
From I-CAR's perspective, Mack said, the ideal industry would result if everyone working in collision repair would have proper training and skills that would enable them to complete their role in the repair process to ensure that the finished product is a properly repaired and safe vehicle.
Utilizing “outward vision,” Mack said, has enabled I-CAR to quit thinking about itself, but how it can help the industry. The result will be a far-reaching industry training alliance that will be introduced in January 2001.
The final speaker Sunday morning was Charlie Baker, publisher of Insight Magazine, who said that some of the trends that are currently being experienced and that will likely continue include the evolution of larger shops commanding larger market share and pressure to incorporate cycle time reductions.
Vehicle manufacturers, he said, will also utilize more subassemblies resulting in fewer parts. General Motors Corp. will have 18 to 20 percent fewer parts on some key models, Baker said. Subassemblies will push up the cost of repairs, but may reduce labor costs.
Baker also talked briefly about “wannabe trends,” those aspects of the industry that haven't become as prevalent as expected. Heading his list of “wannabes” was Internet and dot-com companies. “There are too many right now and they are catching on slower than those companies would like,” he said.
The use of salvage parts, which, he said, has seen a slight increase, will continue to rise. Insurers will write more estimates that specify the use of salvage parts.
At the conclusion of the panelists' presentations, Verona concluded the seminar by stating, “Our industry must share, must learn from other countries. Learn from the best and avoid the rest.”
As the number of Direct Repair Program (DRP)-affiliated shops in the collision industry increases, success for non-DRP shops can often become a difficult goal to achieve. How are non-DRP shops to succeed in a DRP-oriented world?
Loren Lowe, President of Collision Group, Inc., of Rochester, New York, demonstrated to collision shop owners and managers how to succeed in the DRP environment without becoming a DRP shop.
Most importantly, said Lowe, is developing a business plan that includes strategy and innovative methods for achieving success. Lowe urged independent shop owners to make use of “free” opportunities to advertise their business to potential customers. For example, Lowe suggested becoming an “expert” and providing professional opinions in a variety of fields.
“Several radio and TV stations in Rochester need 'experts' to offer professional opinions when they have stories about the automotive industry,” said Lowe. “Furthermore, the local sheriff or police departments often need expert witnesses to testify in court.”
Lowe urged session participants to take part in these outlets, since the publicity generated is often very valuable. And, explained Lowe, “you'll at least get some business from the people that you help as an 'expert' whether or not those outlets generate other business.”
Other creative marketing strategies that Lowe explained would help and independent shop make an impact on the market were things like developing a logo, a slogan and a design that appears on letterhead, employee uniforms, on the floor, on company papers, and on the vehicle that is used to shuttle customers.
“I know that television and other advertising can be expensive,” said Lowe. “The thing is, you need to take advantage of any and every free or low-cost avenue that is presented to you. Since you have a shuttle vehicle that drives customers to and from your shop-you need to make a moving billboard on that automobile.”
Lowe explained to the audience that he believed shops could be more successful as the independent organizations they were originally designed to be-rather than depending upon DRP agreements and insurers to provide business for their shops. “DRP agreements mean an insurer has many agreements with many shops-even in your area,” said Lowe, “and the insurer can be selective about which shop certain business is sent to. I believe you can still succeed-and be profitable-as an independent shop today.”
Most importantly, Lowe stressed, was that each shop determine for itself whether or not to become a DRP-affiliated business. “If you're not going to be a DRP,” he said, “then you need to develop a strategy that capitalizes on each strength that your shop offers. Allow your customers to see the determination with which you work, and the quality with which you service their vehicles.” “These steps will help you keep your current customers, drive new customers to your shop, and allow you, as a non-DRP shop, to thrive in a DRP environment,” said Lowe.
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