Page 18 - Australasian Paint & Panel magazine July-August 2022

18
News • In Focus
PAINT&PANEL JULY / AUGUST 2022
AMA ASKS FOR MORE
YOU KNOW IT’S A CHALLENGING ENVIRONMENT WHEN THE BIGGEST PLAYER IN THE MARKET WITH THE BEST ECONOMIES OF SCALE CAN’T MAKE MONEY ON AVERAGE REPAIR COST AGREEMENTS.
S
AM STREET CAUGHT UP WITH
Mathew Cooper, group chief operating officer at AMA Group to discuss recent site closures and amalgamations and the AMA Group strategy in regard to achieving appropriate remuneration for
repairing cars going forward.
AMA Group has announced the clo-
sure of its Prestons site in NSW - Gemini Prestons and the amalgamation of two sites in WA. The closure of the Prestons site was because an agreement couldn’t be reached with a work provider to ad- just a fixed cost contract that didn’t cov- er the cost of repairing the cars.
Cooper said: “In many cases the cost of repair was twice what the average fixed price was. So, it was significant, it wasn’t just $50 here or $50 there, it was
a significant differential that we had on that contract. There’s only so long that you’ll invest to try and adjust and change and get the right commercial outcome before the losses get to a point where you’ve just got to let it go, and that’s where we got to with this one.
Presumably at one point AMA could have repaired the car for the agreed price - what has changed?
“When you get these average price models, it’s still very dependent upon the types of cars and the types of acci- dents that occur and where those cars come from. Over time in this facility, we ended up with a higher mix of premium vehicles and a higher mix of heavier hits. They were being towed from all over Sydney to this facility.
“So, when you have those two ele-
ABOVE: Mathew Cooper AMA CEO.
ments change, the average cost of repair has to go up, and that’s all calculated in the insurer systems as well. So this is not just us doing our own calculations as to what something costs to repair. We’ve done all these calculations in the insurer’s system, which is a globally rec- ognised system, and has calculated the average repair cost to be higher than what the average was expected to be.
Inflation wouldn’t have helped. “That’s relevant as well because it’s included in the average cost. There are inflationary issues right through the industry at the