New View of Collision Repair

The Canadian automotive landscape is evolving rapidly. New mainstream vehicles are being introduced to the driving public, constructed with more technology, connectivity and advanced materials. Couple that with contraction and consolidation in the collision repair industry that continues to accelerate, decreasing the number of collision repair facilities and increasing the size of networks, banners and multi-shop operators (MSOs). And then add that insurers are also experiencing consolidation – with both insurers and collision repair facilities facing lower profit margins.

As the dynamics of insurance claims and vehicle repair economies continue to undergo such profound change, the relationship between the two stakeholders – how they work together on a day-to-day basis – will become more and more important to a successful industry.

From the repairer perspective, there are two major changes in particular that stand out. The growing trend of insurers implementing “procurement” programs within the repair supply chain is creating challenges – increased complexity and downward pressure on margins. At the same time, the investment in equipment and training continues to rise significantly to keep pace with advanced materials and quickly evolving vehicle design.

These trends have the potential to have a significant negative effect on both the profitability and the long-term sustainability of collision repair facilities.

In other countries, the collision and insurance industries have dealt with similar volatile conditions in a less than pleasant way, with a negative effect on the entire system.

Today, Canadian collision industry stakeholders – including repairers, insurers, original equipment (OE) manufacturers, suppliers, rental car providers, technology and service providers, as well as others – have an opportunity to create a “Canadian” solutions to today’s challenges, through collaboration, co-operation and respect for one another’s long-term sustainability. The health of the industry demands a concerted effort.

COMING TOGETHER

The Canadian Collision Industry Forum (CCIF) is the only national independent forum and voice for the collision repair industry. For more than 15 years, CCIF has sought to bring together industry stakeholders to share information, discuss industry issues and provide a national opportunity for networking.

However, facing evolving dynamics in the industry, in 2013, CCIF recognized that change was necessary to respond to industry needs and to take action. CCIF will serve as the action arena to create the Canadian solutions.

The key difference in CCIF has been the linkage to the Automotive Industries Association of Canada (AIA Canada), the national trade association representing the automotive aftermarket industry in the country. The aftermarket is a $19.4-billion industry employing more than 420,000 people.

AIA Canada – the mandate of which is to promote, educate and represent members in all areas that impact the growth and prosperity of the industry – represents manufacturers, re-builders, manufacturers’ agents, warehouse distributors, national distributors, buying groups, wholesalers, machine shops and retailers, and through its councils, the interests of collision repair shops and automotive service and repair outlets.

AIA Canada assumed management of CCIF in January, a development that offers promise about where CCIF and the entire industry is headed. A new formal structure has been established to allow for increased focus on CCIF’s top business priorities.

In that vein, the CCIF Steering Committee – members of which include collision repairers, insurance companies, suppliers and OE representatives – was established to provide guidance and direction for CCIF.

In addition, the AIA Collision Council has been established to provide strategic oversight to AIA’s activities in the collision repair industry, including I-CAR Canada and projects arising from CCIF meetings.

CCIF PRIORITIES

One of the first actions taken during the CCIF management transition was to determine the industry’s top three priorities at CCIF. These are as follows: profitability, complexity of vehicle repair and people. This was done by utilizing a voting technology called the “VOICE,” or vote on industry change and evolution.

The technology will continue to be used to take the pulse of the industry on important topics and decisions during all CCIF meetings, the agendas for which will focus solely on CCIF priorities and finding ways to address those concerns.

JOIN THE CONVERSATION

The new direction has received a positive reception from all sectors of the collision industry, demonstrated by increased engagement and participation at CCIF events. In fact, the increased engagement of OEs has lead to sharing of information that the collision repair industry desperately needs, not only to understand the new technologies being introduced, but also to plan for the investment needed to properly and safely repair vehicles today and tomorrow.

As well, more insurers are attending CCIF meetings, perhaps recognizing the value of being at the table, participating in the conversation, and collaborating to ensure they help create a sustainable and healthy collision repair industry able to properly repair their insured’s vehicles.

Drawing on the resources of AIA Canada, CCIF recently engaged DesRosiers Automotive Consultants Inc. to launch and administer the Business Conditions Survey, the first information-gathering resource of its kind in Canada.

The survey’s long-term goal is to measure the size of the collision repair industry, track industry trends and measure the sustainability of repairers. The growing number of participating repairers already represents almost 60% of collision repair volume in Canada, providing a valuable snapshot of industry trends.

Further, CCIF’s new communications strategy is meant to improve information-sharing among stakeholders, to ensure more timely details about meetings, past presentations and current projects.

LOOKING AHEAD

There are significant challenges ahead in the collision repair industry, but the challenging environment should not be viewed as a “doom and gloom” situation. With the challenges (and changes) come huge opportunities. Equipped with a vehicle to create and test new, co-operative solutions, collaboration can help support a sustainable industry.

Failing that, Canada could fall into the trap that other countries have – conflict, and all of its negative consequences.

CCIF is committed to the first option – understanding the needs of one another, working together and creating a sustainable future for all stakeholders.

For success both today and tomorrow, improved efficiency within the claims process is essential. It is also necessary to ensure repairers have the capacity to remain profitable enough that they can make the required investments in equipment and training to deliver the promise that insurers make when they write an insurance policy.

Both insurers and repairers share the same customer – the driving public – and both have a responsibility to restore and maintain the safety and integrity of their vehicles after a collision.