The issues and the future of both the collision repair and mechanical repair industries were outlined in detail at Thursday's Opening General Session of the inaugural Automotive Service & Repair Week (ASRW). International Autobody Congress & Exposition (NACE) Chairman Darrell Amberson of Lehman's Garage in Bloomington, Minn., joined Congress of Automotive Repair & Service (CARS) Chairman and 2008 Motor Age magazine Top Shop winner Aaron Clements of C&C Automotive in Augusta, Ga. with moderator Bob Anderson of Anderson's Automotive in Sheffield Village, Ohio, to share their views in a late-night talk show format.
"There'll be fewer people purchasing cars in years to come," says Clements. "Consumers will keep their cars longer, and as a result, some dealerships are going to close. We owe it to consumers to invest in the equipment and technology to keep these cars running."
Amberson reflected the collision viewpoint to the issue of consumers keeping their cars longer.
"With fewer new car sales, it's going to drive up the cost of new cars," says Amberson. "So we always have to find better ways to market ourselves. We can't lose site of asking for the sale from customers and we have to keep marketing strategies around that we used before DRPs."
Direct repair programs are one of the big differences between collision and mechanical repairers.
"We've always had to market ourselves and to make the right decisions they need the training involved," says Clements. "We've never had the opportunity of insurers sending work to us; we have to market ourselves to bring in the consumer."
One challenge to both segments is the issue of governmental regulation.
"In all probability we'll see more regulation of this industry," says Amberson. "There's been some interest in Congress to regulate insurers. Some insurers have gone to congress and ask to be regulated at the federal level and we believe congress will do that. ASA wants property and casualty insurers covered as well under federal regulation."
Clements agreed and brought up the recent presidential election.
"With the new change of administrations, I see more environmental issues coming to the forefront," says Clements. "New legislation may encourage cleaner vehicles and more stringent standards for older vehicles. What we have works right now as far as the Right to Repair issue. I believe if something's not broke, let's not try and repair it. Right now we have access to repair information and that's working well."
Another subject touched upon is the issue of industry unity. Amberson believes the automotive aftermarket is too fractured with too many associations. He feels the industry needs only one association to represent it.
Insurers and the state of the economy are other factors affecting auto repairers. Moderator Anderson pointed out that even with all the financial troubles everywhere today, insurers are still making money.
"It's a love/hate relationship with insurers," says Amberson. "Some have used the marketplace to increase profits at the expense of repairers. We have to recognize that we need each other."
Mechanical shops don't have to deal with insurers the way collision shops do, but the issue of labor rates is common to both.
"We use the time guide mostly as a guide," says Clements. "We'll ask techs if this is a realistic time and we use real time when estimating vehicles. We have to be low enough to get the job and high enough to make a profit. We need to give a good competitive price that still gives us a profit."
Amberson shared the collision view on labor rates.
"We need a better exchange of information," says Amberson. "We have all these different labor rates, yet insurers tell us the severity's the same. It's ridiculous. We need to get on the same page."
The trio also discussed the progress of the Database Enhancement Gateway (DEG).
"It's a very useful and efficient process and has been very successful so far," says Amberson. "Currently the DEG is on a pace to reach 1,000 Request for Reviews (RFRs) in the first year of existence and I think it's a useful and efficient tool to communicate with the information providers."
Moderator Anderson then suggested that perhaps a third-party administrator that is unbiased should perform labor rate surveys.
"We need a mechanism to adjust the rates," says Amberson. "We really need to work together for our mutual interests."
Clements agrees. "There's a lot we can learn from each other and I see us working together more and more," he says.
Amberson feels that some members of the industry are headed for tough times, while others are going to realize success.
"I see winners and losers, but I'm optimistic," says Amberson. "We can't be afraid to embrace new technology. We also need to diversify. We need to not think of ourselves as repairers but rather as businessmen."
