Thursday, 21 June 2012 09:53

Information Shops Can Use Presented at East Bay CAA Meeting

If we’re only as good as the information we possess, people like Richard Forness are an invaluable asset to any collision repairer anywhere. As a highly-respected industry expert, national account manager for Audatex (a Solera company), Forness is a popular speaker who talks to body shops throughout the country about the current state of the industry and where it’s headed. On May 22, this 25-year veteran who ran a series of highly successful body shops in the Greater Minnesota-St. Paul area, shared his views and offered useful statistics with the 60-plus East Bay CAA members in attendance.

To view a pdf file of this article with photos, click HERE.

By closely observing the collision repair industry while traveling throughout the Western U.S. for his job with Audatex, Forness has been able to keep body shop owners and collision-related vendors on the cutting-edge of new developments that can impact their businesses. It’s information that is available to any body shop owner who can find it, but compiling and presenting it in a logical way provides a complete picture of the world of collision repair, Forness explained.

“We need to know, because we’re held at a higher level by the public and our customers,” he said. “Knowledge is power and by having the facts, you can be a better owner and operator. We need to understand these new vehicles, so that we can educate our customers in the right things. It’s vital because we can’t risk peoples’ lives with partial knowledge, especially in this volatile marketplace.”

First, auto accidents are on the decline, which is good for the human race, but not profitable for the collision industry. Previously, the average driver in the United States was in an accident once every eight years. Now, it's about every nine years, according to Forness. But, don’t fret about the number of accidents, Forness explained, because the news is still positive overall.

“In 2011, there were 22 million accidents in the U.S. and more people with insurance were filing more claims than in 2010,” Forness said. “People are driving less, but there are more people out there driving, so they tend to offset each other. These numbers have gone up for the first time since 2008, so that means there’s more work out there right now.”

Another obvious factor affecting the collision industry is bad weather, Forness said. And although it isn’t as important in northern California (where we get rainstorms and earthquakes that are way too infrequent to count on), bad weather helped the rest of the country’s body shops in 2011.

“There were almost 3,000 severe weather events last year, with 1,894 tornadoes and a wide range of incidents involving hailstorms, hurricanes and high winds. As a result, there were more claims in 2011, and we can cite bad weather as one of the main reasons,” Forness said.

Another interesting trend in the collision repair industry involves the continuing spread of aftermarket and recycled parts, Forness said. “The use of OEM parts in repairs is still dropping, and in 2011, there was another drop in their sales overall. America’s cars and trucks have reached a record age of 10.8 years, and despite all of the price-matching programs offered by the carmakers, body shops and insurance companies are incorporating more and more aftermarket and recycled parts in their repairs. The proliferation of computer alternative part search engines is also making it easier for body shops to locate these non-OEM parts.”

The parts climate is also changing as new vehicles embrace technological changes while attempting to meet increasing CAFÉ standards. “Too many cars now are being designed like aircraft,” Forness explained. “As they try to design cars that weigh less while maintaining structural integrity, we’re seeing more complicated parts mixes, consisting of more parts made of plastic composites, carbon fibers, magnesium, high-strength steel and more aluminum. Also, the drive toward making parts using more eco-friendly materials includes things such as coconut fibers, soy foam for seat cushions, mushroom roots for use in bumper covers, kenaf (a tropical plant), and Ford Motor Company is researching the use of cooked chicken feathers for use in some of its cars.

One alarming statistic is that more drivers are uninsured, Forness said. “In 2007, 86% of the drivers out there were insured, but now it’s down to 82%. It’s caused by the recession, which is still lingering, and high unemployment. When the economy further rebounds, the insured rate will increase, but until it does, that’s a scary number.”

One answer that all body shops want to know is: will I be in business next year? Forness provided statistics to offer a glimpse into the future of body shops in this country. “There are approximately 34,000 collision shops out there in the United States, and 500-1,000 of those are closing every year. But, for those who can survive, there is good news. As the overall number of shops decreases, the average revenues per shop will grow around 2% every year.”

After the presentation by Forness, East Bay CAA Chapter President Tiffany Chichon-Silva announced that the chapter’s annual golf tournament, originally to be held on June 2, will be re-scheduled for sometime in August.