MA AASP Joins Right to Repair Coalition
The Massachusetts Alliance of Automotive Service Providers (AASP) announced that it has officially joined the Massachusetts Right to Repair Coalition. AASP is a large coalition of full-service, high-tech mechanical repair shops and auto collision repair shops that reach into every corner of the state.
“Many of the finest auto repair companies in Massachusetts call AASP their trade association,” said Art Kinsman, spokesman for the Massachusetts Right to Repair Coalition. “So we are excited to welcome AASP to the Massachusetts Right to Repair Coalition.”
The Right to Repair legislation and the Right to Repair initiative petition for a ballot question would establish a level playing field where independent repair shops can compete fairly with their franchised dealer counterparts. Car manufacturers would simply be required to sell all dealer-quality repair and diagnostic information to independent repair shops.
AASP’s mantra has always been ‘education matters’, and as such, they have long been a great resource for automotive information and knowledge. AASP’s endorsement of Right to Repair is important because it highlights that today’s automotive technicians can serve consumers best with a combination of extensive training and proper access to all repair and diagnostic information necessary to repair today’s sophisticated vehicles.
AASP joins such other associations such as the New England Tire and Service Association, American Car Care Centers, the Service Station Dealers of America, the Automotive Recyclers of Massachusetts, the Massachusetts Locksmiths Association, Midas, Meineke, the MassachusettsMotorcycle Association, Valvoline, Bridgestone-Firestone in supporting Right to Repair legislation in Massachusetts. Right to Repair is also supported by consumer advocates such as AAA and the Consumer League for Economic Auto Repair (CLEAR) and the American Military Society who advocates for the economic well-being of soldier’s families at home.
Potential Economic Impact of Parts Bidding on Collision Repair
From 2007 to 2009 State Farm Insurance, the nation's largest auto insurer, tested a parts ordering program with repair facilities who participated in their DRP program in California and Indiana. That program revolved around a parts discount to State Farm from the auto manufacturers, which was facilitated through an electronic parts ordering program. In April of 2011, nearly two years after the conclusion of the previous test program, State Farm released an online video discussing future parts ordering initiatives. That same month, Insurance & Technology published an article referencing a report released by Stephen Applebaum and the Aite group, which clearly stated that "State Farm is leading the way to greater control of the auto repair procurement process with its announcement of a new electronic parts-ordering initiative."
Below is a real example of the resulting quotes from the bidding process for parts necessary to repair front-end damage on a job requiring only 4 parts: 3 bumper components and a lamp.
These slides are screen captures of pricing bid on by OEM dealers where the PartsTrader program is currently testing in the United States. As you can see, one dealer maintained the OEM MSRP list price, while the other two offered a 15.46% discount off the list price, reducing the list price by $54.42. You will also notice that the margin on the discounted parts is 2% lower than the part with the MSRP pricing. What this means is that the repair facility will make $25.00 less profit on this part and the dealer will make $29.42 less in profit. The insurance carrier will save $54.42 due to the reduction in the list price. Will the consumer ever see any of these savings, or do these savings increase the carrier's profit margin?
On this part, the two of the dealers have offered a 23.52% discount on the list price, with a 2.01% decrease in margin. This equates to a $5.66 loss in profit to the repair facility, a $7.97 loss to the dealer and a $13.63 savings to the insurance carrier.
On this part, two of the dealers have offered a 23.39% discount on the list price, with a 2% decrease in margin. This equates to a $2.57 loss in profit to the repair facility, a $3.62 loss to the dealer and a $6.19 savings to the insurance carrier.
As you can see, on this part, two of the OEM dealers have offered a 22.09% discount on the list price, with a 2% decrease in margin. If the shop selected OEM, this equates to an $18.29 loss in profit to the repair facility, a $25.20 loss to the dealer and a $43.49 savings to the insurance carrier. However, this slide also contains 3 "Recycled Grade A" part options. The cheapest used part is listed at $25.00 cost. Hypothetically, if the repairer were to bill this part with a 25% markup, that part would list on the estimate for $31.25, producing $6.25 in profit to the repair facility. In comparison to the OEM part with the OEM MSRP, the used part could equate to a $62.65 loss in profit dollars to the repair facility, while saving the insurance carrier $165.61.
Looking at this scenario, a small repair with only 4 front-end parts, the numbers appear to be staggering. If the cheapest part was selected in each of these occasions, the overall parts order would result in the repair facility losing $95.88 in parts profit in comparison to if all the parts were ordered using traditional OEM MSRP; conversely, this program will save the insurance company $239.85.
Every collision repairer could ask themselves, is this a win-win situation? For anyone looking to understand the impact on their business, there are numerous resources available to repair facilities to analyze the economic impact that adjustements to profit centers, such as this, can have on your bottom line.
Aside from the loss of real money associated with parts dollars, there are additional expenses to consider as well. There is a waiting period before an estimate can be locked while the repair facility waits for quotes. Once those quotes are received, each part price needs to be manually re-entered into the estimate before it can be committed. This particular example only has 4 parts; how much administrative cost is associated with that task if there are 40 parts? What is the cost of potentially dealing with multiple suppliers to maintain the most "competitive price"?
It is too early to have answers to many of these questions, but repair facilities in the U.S. would be well served to start looking at how programs such as this impact your business now, and how you wish to react to them in the interest of your business' health and welfare.
Sherwin-Williams Automotive Finishes and Summit Software to Host Collision Facility Digital Marketing Seminar in San Diego
The Sherwin-Williams Automotive Finishes A-Plus™ University and Summit Software and Marketing have teamed up to create a special “Digital Marketing Advanced Business Class” specifically for collision repair facilities.
This four-hour workshop will be held Thursday, April 26, 2012 in San Diego, CA (at Petco Park, home of the Padres), and includes an exclusive stadium tour, dinner and suite to later take in the Padres vs. Washington Nationals baseball game.
Designed to meet the challenges body shop personnel and decision-makers face in today’s rapidly changing digital and information age, the workshop is recommended for collision shop owners and managers. Frank Terlep, CEO and Lead Sherpa of Summit Software and Marketing Solutions will facilitate the program.
AAIA and ASE Recognize World Class Auto Technicians
Of the more than 759,000 automotive technicians working in the United States, 20 outstanding individuals have qualified for the prestigious 2012 World Class Technician Award. The Automotive Aftermarket Industry Association (AAIA) and National Institute for Automotive Service Excellence (ASE) work together to recognize these professional technicians who have tested and obtained ASE certification in 22 specialty areas during the 2011 test administrated by ASE.
The 2012 World Class Technicians are:
- Chris M. Beckhans, Centereach, N.Y.
- Thomas R. Bowles, Heathsville, Va.
- Michael C. Cain, Grapevine, Texas
- Stephen P. Clark, Sr., Kingwood, Texas
- Paul T. Dawson, Highland, Utah
- Timothy W. Feldhaus, Kettle Falls, Wash.
- Ricardo G. Garcia, Crystal Lake, Ill.
- David D. Houk, Springtown, Texas
- Victor A. Jackson, Mount Laurel, N.J.
- James W. Kendig, Springfield, Ohio
- Craig A. Lampe, Grapevine, Texas
- Kirk A. Mahaffy, Grapevine, Texas
- Robert A. McNamee, Hinckley, Ill.
- Dale B. Nicholson, Shakopee, Minn.
- Guy H. Rennow, Grapevine, Texas
- Jeremy K. Richardson, Windsor, Pa.
- Thomas A. Southward, San Diego, Calif.
- David M. Utz, Villa Ridge, Mo.
- James R. Whelan, III, Petersburg, Va.
- Jeremy J. Wiggins, Huffman, Texas
“The AAIA World Class Technician Award is for automotive diagnostic and repair professionals what the Super Bowl is for professional football players or what the Stanley Cup is for hockey players,” said Kathleen Schmatz, AAIA president and CEO. “Just imagine the knowledge and skills needed by a technician to pass 22 ASE tests. These folks are truly the best of the best and we are proud to be associated with them through our annual recognition in conjunction with ASE.”
“This recognition partnership between AAIA and ASE goes back 26 years and represents the most significant achievement award available to our ASE-certified professionals,” said Tim Zilke, ASE president and CEO. “ASE is grateful for the support AAIA provides to our service professionals in recognizing these outstanding individuals each year and we celebrate over a quarter century of this commitment to excellence with AAIA.”
Since the World Class Technician recognition was established 26 years ago, only 1,833 technicians have been honored. Recipients receive a special certificate signed by the presidents of ASE and AAIA, a logo medallion and embroidered shoulder insignia. Additionally, their name is perpetually inscribed in an honor book located in the Automotive Hall of Fame in Dearborn, Mich.
