With significant investments in equipment and training these repairers are able repair to vehicles properly now and in the future.
Many have followed this model, but a significant majority of the repair industry is still “repairing” cars with few changes from 5 or 10 years ago. So far, the cars are going out the door, the insurance company is not being asked to pay for sophisticated repairs, and nobody had to think outside of yesterday’s box.
In 2021 the progressive repairers are ready for a future of correct repairs but many other operators are hoping it will not arrive. They are making money now and the requirements for correct repairs include expensive equipment and training (also expensive) that will be very hard to do with a group of technicians who have not had to take any training for many years.
As examples of how hard this will be for the overall industry, here are a few observations from Canada …
In America, Jeff Peevey, a knowledgeable industry participant, talked about being underwater at a presentation to the Collision Industry Conference (CIC) in early 2020. His point was that what had been described as a tsunami of change a few years ago was in fact not a tsunami, it was a sea level change, and most repairers are still on the old beach, underwater.
]]>In 2021 these changes have not been made, but the crisis has not yet arrived. This does not mean that the 2016 prediction was wrong—just that it was off by a year or two.
Economists recognize that there is a lot more to finance than just numbers, and many of their principles apply to a very broad range of circumstances and behaviour.
Rudi Dornbusch was an economist who worked at several prestigious American universities from the 70s to the early 2000s. Students of international macroeconomics are fond of quoting “Dornbusch’s Law.”
It is not a rigorous statement and there are many versions with slightly different wording. One of the most concise is;
“Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine”.
Dornbusch was certainly not thinking of the collision repair industry of 2021 when he wrote this, but it applies exactly. Those progressive operators who have been preparing for many years and are repairing cars properly now will not be taken by surprise.
]]>At 2021, these changes have not been made, but the crisis has not yet arrived. This does not mean that the 2016 prediction was wrong—just that it was off by a year or two. So far we are still getting away with clean and shiny cars after a repair.
The consumer continues to be busy with all the other concerns in his or her life (in most cases of more immediate urgency) and as a result there has been minimal engagement on the part of the car-owning public. In this vacuum the major players in the repair industry are still continuing to compete and protect their own positions; they have not yet reached a significant level of collaboration.
It is starting to look like it will be the vehicle manufacturers who will take the lead in educating the vehicle owner about safe repairs. They are faced with at least three significant challenges:
Money is a constant theme and the very large operators cannot afford to take a stand that will put them offside with their essential insurance company relationships. Just like no insurance company wants to be the first to raise rates, none of the large national chains wants to be the first to tell the insurance company that a new and more costly repair is required. They may know it is required and they will get to it when they need to (which will be at a point between Accepted and Expected), but they will not rock the boat at the Not Accepted phase.
An Intelligent, Researched Explanation
That operator with 300 locations cannot count on a strong local reputation in each of his locations, with that strong local reputation overcoming the significant hold that insurance companies have on their policy holders. There are also very few (zero?) national chains where a single owner can get stubborn and do the right thing because he can, knowing that it will have short-term costs.
An intelligent, researched explanation on why a procedure is needed, backed by a reputation for integrity and honesty will, with some repetition, move the procedure from Not Accepted toward Accepted. There is limited financial gain to that operator during the move toward Accepted. As time goes on, the direction taken is seen by the broader industry (including those paying, mostly insurance companies) as the correct one. With this understanding there is a general movement toward the better and more rigorous procedures, and they become Expected. There is some return here for the progressive operators, as the lessons learned in the early stages allow them to work efficiently with these procedures, which for them are not new.
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