Preparing for the Future With Andrew Shepherd

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Now is the perfect time for many shops to focus on training and hone repair procedures. PHOTO Huw Evans

The pandemic has created a unique opportunity for the collision industry to plan ahead.

During the COVID-19 pandemic, Collision Management went across the country, asking repairers about how business was operating at a local level. As a follow up to that story, we interviewed Andrew Shepherd, Director, Industry Programs, AIA Canada and Executive Director, I-CAR Canada to gain a feel of the situation from a national perspective. Here’s what he had to say:

Collision Management: Since the COVID-19 pandemic began how has the situation from your perspective evolved related to the collision repair industry across Canada?

Andrew Shepherd: I think it is important to note that unlike the mechanical sector, the basic statistic in the collision industry is the number of kilometers or miles driven.

What we’ve seen is that for collision repairers, the fewer kilometers driven as a result of COVID-19 lockdowns has reduced the number of collisions and the amount of work available. There is no doubt that the collision industry has taken a fairly severe hit as a result of the pandemic.

AIA Canada conducted a survey at the end of April and beginning of May and although it covered the entire aftermarket, about 65 percent of the study was weighted towards collision. Over half of the shops surveyed said they had seen a 50 percent drop in business during April and a similar pessimistic prediction for May.

We have just sent out a second survey, so it will be interesting to see how things have evolved since the last one.

Have there been some significant changes to the way shops and key stakeholders operate that will likely be carried forward as restrictions are lifted and we return to the new normal?

I see both micro and macro changes as it relates to moving forward. On the micro side, public insurers such as Manitoba Public Insurance (MPI) and Saskatchewan Government Insurance (SGI) are now paying collision shops for sanitizing vehicles as part of the repair process which has definitely been a progressive move.

You’re also seeing trends from private insurers, particularly in the U.S. that are also adopting a similar approach. Moving forward, I think consumers are going to continue to be sensitive to that and shops are likely to continue with pre and post-repair sanitizing of vehicles for the foreseeable future.

On the macro side of this, trends are pointing to the fact that smaller shops will likely continue to go out of business.  Currently, we have approximately 4,000 collision shops across Canada right now and it is very easy to see that number dropping by another 10-15 percent.

An interesting development is that because we’ve seen such widespread consolidation and the growth in large networks, there could be a situation where these smaller, more rural shops that are already part of a network are able to leverage that network’s resources in planning, business strategy and even financial support to weather the storm.

For those smaller shops that are still independent, I think it will be much tougher and you’re likely to see more of them continue to fall by the wayside.

Given that different provinces have instigated different restrictions and different rules at different times related to lockdowns and social distancing, how do you think that will impact the collision repair industry collectively as we move forward?

I wouldn’t say there has been a big difference in the way collision shops have been impacted by lockdowns in different parts of the country. What I will say is that AIA Canada lobbied very hard to have the aftermarket declared an essential service during the pandemic, particularly in Ontario and also Quebec, where tough restrictions on collision repairers were eventually loosened.

Overall, I don’t think we’ve seen a massive difference in how collision shops were treated compared with other businesses but I do feel that collision repairers found it easier to adapt than some other businesses and were able to implement practices such as virtual estimating, keyless drop-off and pick up for customers, as well as processes to protect their staff while working and limiting or removing customer access to the shop.

With that in mind, I think many collision repairers are positioning themselves to reopen and when they do, business will likely rebound.

CM: With a predicted surge in private vehicle purchase and use expected in the coming months (as many consumers are likely to remain reluctant to use public transit), how do you think collision repair shops can work to prepare themselves for a significant increase in collisions and business opportunities?

I think there are a couple of points I’d like to mention. The first one is that there is a real, long-standing challenge for collision shops, especially in reaching out to younger vehicle owners and adapting their communication tools to do it.

We have seen many cases over the last few years where businesses that are dependent on a website and a phone number are not going to reach younger people and that is something that still needs to be addressed. Second, if I were a shop owner, I’d be focusing my eyes further on the horizon than just anticipating a short-term ramp up in vehicle use as a result of COVID-19 and social distancing.

Waves like this rise and fall so I think a key takeaway is ensuring that as a repairer, you have the fundamentals of your business right. You need to have some agility built into what you are doing and be able to incorporate in-demand services such as sanitizing vehicles. Longer term, the technology aspect isn’t going away, so I think it is very important to keep your eye on the bigger picture.

What about smaller, more rural repair shops, do you have anything further to add on this subject, such as what their customer base or insurers will need to do, if a shop is no longer in business in these communities?

I think that if things continue, there are many shops that simply won’t be able to sustain a significant loss in income for several months. As I said earlier, there are many smaller, more rural shops that have joined the large networks and are able to leverage their resources.

For those that aren’t able to survive, their customers are going to have to work with insurers to cover the cost of towing that vehicle to larger shop and be ready to look for insurance policies that make provisions for things such as longer-term rental cars.

In terms of training programs, such as those offered through I-CAR, how is the process likely to evolve in this new normal, while continuing to deliver effective learning solutions for the collision industry in Canada?

As far as I-CAR is concerned, a major product line for us has been online learning. In Quebec, as part of the Concerted Actions Program for the Maintenance in Employment (PACME), the province has even introduced a grant which will reimburse up to $100,000 of an employer’s training expenses if normal business operations have been impacted by COVID-19.

Initiatives like this provide a very immediate and practical solution for shops to move quickly when it comes to training. In other developments, although our welding programs have been closed during COVID-19, we are starting to see some of the provinces less impacted by the pandemic starting to open up their technical colleges again.

In our case, when I-CAR conducts welding training, its often done in large shop environments and is tightly controlled and adaptable. We have been able to adapt these classes to webinars and have an ongoing, fairly aggressive webinar program and once we can resume physical training, we should be able to re-emerge fairly quickly.

Another interesting point is that some training requirements have not shifted during the pandemic. SGI for example, is still requiring all of its shops to be I-CAR Gold Class certified by March 2021. I think that is very positive and proof that there are those that have their eyes on the horizon and recognize the importance of having a highly trained workforce.

Now is the time for savvy shops to maximize training so they can be ready for business once it starts to ramp up again.

There has also been a viewpoint that many OEMs will be pushing back or temporarily shelving battery electric and AV plans—how do you think that is likely to impact the collision repair industry?

It can be hard to predict the future but I will say that when things like this happen, it can be relatively easy for a shop to decide not make the investment in EV certification, training and equipment to repair something like a Tesla and instead send it to a shop that already has.

If we do see the number of EVs significantly increase then I think most shops will be able to move quickly and pivot to a new business orientation, including the arrival of autonomous vehicles, whatever the pace of that introduction may be.

Collision shops are more than capable of adapting to change, but I think it’s important to understand that when that happens it won’t be a massive infrastructure or process shift, it will be a skills shift. And the shops that have and will continue to make investments are the ones ready to do that.

Do you think there might be opportunities for people displaced from other industries to work in the collision repair sector to help address the shortage of qualified, trained professionals?

From my perspective, there is a bit of a two-sided answer to this question. I think that savvy collision repairers are moving toward hiring more people with digital skills while simultaneously adopting a more assembly line approach to vehicle repairs.

This scenario means you can hire for more specific skills and does present opportunities of inflow for employees from other sectors of the economy. On the flipside, the number of vehicle collisions has been relatively stable. More and more vehicles are hitting the roads with ADAS technology and the number of shops is staying the same or declining.

Furthermore, the skills shortage concept has not been statistically proven and when I look at Atlantic Canada for example, where the number of shops over the last 10 years has declined by a significant number, those technicians that have been displaced are generally looking for work in other collision shops, so it is very difficult to prove that there is a skills shortage, especially in a crisis and for the government; particularly when serious statistics aren’t available.

Is there anything else you’d like to mention?

I think just the importance of training. Savvy collision operators know that training isn’t an optional expenditure but rather the solution to staying agile. By doing this and anticipating new challenges and focusing on their business, they see training and learning as key to staying profitable.


Categories : Collision, Editorial
Tags : Management

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