Advanced vehicle technology will render some aspects of collision repair obsolete but will also provide new business opportunities.
Adapting to new vehicle technology has undoubtedly been one of the collision repair industry’s biggest challenges in the last decade. And, as we enter 2020, that challenge is set to grow. Not only do repairers have to continue dealing with vehicle technology in the repair process, they have to manage external challenges related to it as well.
These include: managing the customers’ expectations of a timely and original equipment manufacturer (OEM) compliant repair, the insurance industry and the need from their partners to help reduce costs at a time where Length of Rental (LOR) and Severity (average cost per claim) continue to climb and, last but not least, that while technicians continue to receive training and OEM procedures, they often still feel “behind the eight ball” in this fast paced environment.
It’s something for which I truly empathize with today’s collision repair professionals. A decade ago, substrates such as Aluminum, High Strength Steel (HHS), Ultra High Strength Steel (UHSS), Magnesium (MAG), Boron, Carbon Fibre and Transformation-Induced Plasticity Steel (TRIP Steel) were concerns largely reserved for boutique repair shops that dealt with exclusive, high end vehicles.
Today, these same substrates are becoming ever more common in garden variety vehicles, as automakers continue to look for ways to reduce weight and boost fuel economy. Identifying where these substrates are located and having the knowledge and tools to repair or replace them, is a real concern. As a “defensive strategy,” collision repairers are turning to OEM Certification programs to help position themselves as the repairer of choice in this new collision repair landscape. Beyond this sound business decision and the financial commitment required, shrinking repair volumes mean that, collision repairers across Canada are seeing repair opportunities dwindle away from external threats such as Total Loss percentages (15-25% depending on the province), Salvage Rates, aging vehicles and Advanced Driver Assistance Systems (ADAS) designed to reduce the number of collisions.
A main driver for the shrink in repair volume in the future will be the role that ADAS plays in collision mitigation. According to McKinsey Global Institute, “95% of collisions, no matter what the weather, are due to human error.” With that being said, ADAS is no longer just found in higher end vehicles—like aluminum, UHSS and other “exotic” substrates—it’s becoming mainstream and standard in even some entry-level vehicles. Driving that change is not only safety regulations, but the decreasing cost of bringing technologies to market such as Lidar and Radar. It’s predicted that by 2020, an estimated 40%* of vehicles sold will be equipped with ADAS systems. That’s a significant impact on the potential reduction of vehicle collisions.
As the collision repair landscape evolves and elements of the business become obsolete, repairers must be proactive and shift the nature of their work.
Yet on the flipside, this new landscape also brings with it, opportunities.
As vehicles become increasingly electrified and battery systems become more commonplace, there is an opportunity for shops to become specialized in electric vehicles. Even if there are fewer actual collision repairs required, there will still be service needs. These will range from tire changes and rotations to servicing/replacing brake pads and rotors as well as cooling system flushes and battery replacement.
There’s a lot of change coming to the collision repair industry, but this is not the first time it’s happened, nor will it be the last. Collision repairers across Canada are already aware that changes are coming and taking steps to act accordingly; as they should. After all, history is littered with tales of once prominent companies that fell by the wayside because they didn’t adapt to change. Just look at Blockbuster and Eastman Kodak.
*National Windscreens (2019)