Page 32 - Australasian Paint & Panel July-August 2019

Industry Insights
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PAINT&PANEL JULY / AUGUST 2019
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the latest PDR and repair techniques. Previously it would have taken a couple of years to have the cars repaired through traditional shops. It looks as though the vast majority of cars will be repaired in a nine month period.
Severe drought conditions have result- ed in extra claims for animal hits, pre- dominantly kangaroos. IAG alone reports 28,000 motor claims for kangaroo colli- sions from March 2018 – March 2019. For many country repairers animal hits ac- count for the majority of their work.
INSURER INFLUENCES
The Australian market is dominated by 'the big two', Suncorp and IAG, who are both umbrellas for many insurance brands. Senior executive Mark Milliner moved from Suncorp to IAG and appears to be replicating some of the initiatives since abandoned by Suncorp such as customer hubs which means customers don't see where their cars are being re- paired. IAG has recently announced its intention to run their own shops called Repair Hub in urban areas for driveable repairs. This is a joint venture between the insurer and two repairers. IAG has also announced that it is setting up its first shop in Auckland.
Insurers have demonstrated a prefer- ence for dealing with larger entities and,
as consolidation finds its stride, the independents could find the market place more challenging unless they have diversified or carved out prestige or fleet niches. Meanwhile insurers have taken aggressive action to lower costs, for instance cutting out 'not at fault' courtesy car companies by making deals with major hire companies and forming strategies to deal with the 'third' party market where repairers can charge high prices for fixing not at fault customer's cars (particularly prevalent in Victoria).
It's been a tough couple of years for insurers thanks to a series of cata- strophic events such as bush fires, floods, cyclones and hailstorms. On top of that, the Government launched a Royal Commission into misconduct in the banking, superannuation and financial services industry, the full repercussions of which have not yet been realised. While the Commission didn't have time to deal with the nu- merous submissions on car insurance and the auto repair landscape, there is Government interest in further in- vestigation. Also a parliamentary in- quiry in Western Australia at the end of 2018 recommended that the Aus- tralian Competition and Consumer commission undertake an in-depth
Meanwhile insurers
have taken aggressive action to lower costs”
inquiry into 'possible anti-competi- tive conduct and misuse of power in Australia’s smash repair industry'. There has also been an increase in the number of inquiries into the industry which appear to have stemmed from the Royal Commission.
OEM INVOLVEMENT
In terms of manufacturer involvement Holden launched its repair network in 2018 as did Tesla. There are a number of manufacturer approved repair networks, in the main for European cars. Subaru has a mature, established repair net- work, Toyota launched its network in 2017 and Suzuki also has a network. None of the other 'Asian' manufacturers have networks yet despite the likes of Mitsubishi, Honda, Hyundai and Nissan enjoying significant market share. Hav- ing a manufacturer 'badge' is highly de- sired in the repair community with 81% of our survey respondents saying that they intended to apply for one in the next 12 months.
Holden is the latest manufacturer to launch a repair partner .network