Page 27 - Australasian Paint & Panel Magazine

IBIS GLOBAL FOCUS
AMA will find a way for a demerger of the crash repair business which Gemini founder Andy Hopkins would run, while the rest of the business would be privatised leaving the other major AMA partner Ray Malone in charge of a procurement business which would supply the repair chain. Meanwhile there is credible intelligence that a smaller venture captital company is in the process of setting up a rival repair network which could be launched towards the end of this year.
In response to this the buying and networking group Car Craft has seen a steady rise in membership. Car Craft is a group of just over 100 repairer businesses which is well established in Western Australia, Queensland , the Australian Capital Territory and South Australia. It is also setting up in Sydney and Melbourne. The group of independent repairers is taking part in the AMBRA shop grading scheme, has a strong emphasis on training and is working hard to become a significant player in the marketplace and offer an attractive alternative to consolidators for insurers.
The rise of larger groups could lead to smaller entities turning more towards third party and rectification work. There is a trend for consumers to raise their excesses to lower their insurance premiums and there is opportunity for some smaller shops to target these below excess repairs.
Another impact of fixed price repairs and larger operations leveraging economies of scale to repair cars more economically is increasing competition among repairers, which is to the advantage of the insurance companies. Bodyshops are having
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to find ways of being more efficient in order to make profit and this is particularly hard on smaller enterprises.
The franchise Fix Auto set up in Australia two years ago and has 14 franchisees in three states.
The first ‘repair pods’ have recently been launched in Australia for fast repairs. Hail repairs are another growing sector as large scale hail and weather-related events have become more common.
HOW ARE INSURERS INFLUENCING THE REPAIR SECTOR AND WHAT IMPACT DOES THIS HAVE? The insurers have been favouring the approved network approach and sending as much work to their network repairers as possible. One of the two largest insurers IAG caused consternation in the industry in September when it made choice of repairer an option that consumers had to pay extra for. Previously, consumers had a choice of repairer, now they must choose an ‘any repairer’ option if they want to use a non-approved bodyshop. This could cost at least $80 more to select this option and consumers are unlikely to tick a box to spend more on a policy. If consumers do choose
a repairer outside the approved networks there are a number of caveats such as cash settling for the repair and: ‘You can’t claim under our lifetime guarantee if you arrange repairs after we cash settle your claim – that is, we do not authorise repairs.” IAG has also being trialling a genuine parts scheme which the Australian Motor Body Repaiers
Association has many concerns with the scheme especially how it will impact repairers’ parts margins.
Suncorp directs as much work as possible through its repair chain Capital S.M.A.R.T. The chain initially repaired driveable cars whose accident damage was in a rigid scope. It has now branched out with S.M.A.R.T Plus which deals in light structural repairs that are out of scope of the rapid shops. Captial S.M.A.R.Ts repair around 40% of Suncorp’s vehicle claims.
Another significant directive from IAG is that all of their approved repairers must become I-CAR Gold. I-CAR is a training organisation aimed at upskilling technicians and other bodyshop staff. Attaining I-CAR Gold involves a commitment to ongoing training for a number of staff within the business and can take up to two years to achieve.
Another trend is that when insurers have a good working relationship with repairers they encourage them to open more shops to undertake more repairs for the network. This will support a rise in MSOs even if it is on a small scale of two to five sites.
IN WHAT WAY ARE VMS INCREASING THEIR INVOLVEMENT/INFLUENCE IN THE SECTOR? Vehicle manufacturers are becoming increasingly involved in the repair sector as their vehicles become more complex they feel a need to protect their brand and ensure their vehicles are restored to pre-accident condition. The majority of the major vehicle manufactures have approved repairer networks with Holden shortly to launch theirs
There are a number of manufacturer customer assistance systems coming online in the next 12-24 months which could
“The insurers have been favouring the approved network approach and sending as much work to their network repairers as possible.”
July / August 2018 PAINT&PANEL 27