Ronak began the presentation by discussing some of the recent major technological advancements of the automotive industry and their significance to collision repairers and their business. Some of those advancements included onboard safety systems and controls, telematics and web-connected vehicles, accident avoidance, autonomous driving capability and hybrid power systems.
The Vehicle CAFE (Corporate Average Fuel Economy) requirements were also discussed.
“We’ve got organizations that have geared up their entire business strategy around lightweighting and new CAFE requirements,” Ronak said. “So we’ve got all this stuff to increase the vehicle efficiency---they’re using different materials for construction and they’ve got different construction techniques, including something call friction stir welding.”
Ronak said friction stir welding is used on vehicles such as a Honda Civic, and its purpose is to join dissimilar materials together, e.g. aluminum and metal. He asked if anyone in the audience had ever heard of friction stir welding, and later on, laser welding.
“How many of you guys have a laser welding system in your shop to be able to laser weld cars back together as per the OEM instructor method?” Ronak asked. “Nobody, right? Well, this is a problem because in order for you guys to be able to reproduce these procedures, you’re going to need to the equipment the OEMs use to construct the vehicle.”
Ronak and Griffith continued on to discuss some facts related to current automotive technology, starting with the major, if most basic, one---overall, new technology displaces old technology. The money put toward investing in specific facilities, training and equipment for a specific new technology is currently experiencing shorter periods of return on investment.
In response to new auto technology, it is critical that businesses invest in their employees and tools to ensure they remain current. Doing so will help ensure their capability of repairing and servicing this new technology.
They continued on to emphasize that the old days are gone---there is no long-term return on training because of the nature of annual technology progression. Technicians trained on present-day technology already need to be retrained for tomorrow’s OEM technology. Businesses should factor and adjust the cost of recurring annual training into the cost of providing that OEM trained labor resource annually, because eventually, OEM certification will become mainstream.
Griffith later continued on to discuss shops’ best opportunities for OEM certification, the first one being the performance of market research. He advised shops to analyze their current existing work mix by brand, their market area’s mix of registered vehicles, and to compare their data with the market.
He displayed a screenshot of data provided by CCC ONE’s management system as an example of how to pull such information, including which cars a shop is actually repairing.
“[This] will help you make a better decision on what OEM certifications you might go after,” he said.
For example, Ronak said, if 30 percent of a shop’s business is on GM vehicles, the shop manager may want to look at GM certification.
“If 2 percent of your work is Hyundai or Kia, maybe that’s a little lower profile,” he said. “However, maybe you’ve got three or four smaller percentages that cumulatively add up to 20 percent and they all have common certification requirements. It might make really good sense for you to target that particular group of OEMs, even if it’s a small incremental charge for something extra for one of them, if the base amount of things that they need is pretty consistent.”
Griffith later addressed another critical component of OEM certification---determining which OEM opportunities make the most sense for one’s shop. He said there are two types of costs involved with certification: hard costs and soft costs.
Soft costs, he explained, involve the efforts required to ensure one’s “house is in order.” Having the proper equipment, ensuring one’s training is up to date, and preparing for a potential background check by the OEM all compose these “soft costs.”
He said the depth of the background check will vary by OEM, but may include items such as a criminal check on the owner and/or manger of the facility, social media reviews and reports to organizations such as the Better Business Bureau. A shop having a history of repairing and reselling previously salvaged vehicle was something that Griffith emphasized was quite likely to be an issue for an OEM.
“I doubt I have anyone in this room who’s doing this, but if you’re buying salvaged cars and flipping them and reselling them, chances are the OE is not going to be interested in certifying you,” he said.
Hard costs of OE certification, Ronak explained, are the monetary expenses required for certification. He advised that shops ensure there is enough work for that OEM in the shop’s market to justify the monetary output required. Shops also need to do their market research to confirm whether there are other certified area shops for that OEM that overlap, because there needs to be enough work to support everyone.
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