Sept. 27, 2012—More than 125 Ohio repairers raised concerns about the possibility of reduced profits caused by State Farm Insurance’s parts procurement pilot through PartsTrader during industry meetings facilitated by the Automotive Service Association (ASA).
The ASA held two consecutive meetings in Ohio Sept. 18 and 19 in Cleveland and Cincinnati—which were open to the entire collision industry—focused on State Farm’s electronic parts ordering pilot.
The ASA said repairers continue to have apprehension about the discounted manufacturer’s suggested retail selling price (MSRP) that is included in the PartsTrader program. Shops are concerned that lower profit margins will result if suppliers elect to provide a discounted MSRP along with a price quote for a part.
The ASA said several Ohio shop operators also continue to question the reasoning, efficiency and alleged benefits of the program that have been touted by State Farm.
State Farm has said its PartsTrader process should improve part availability, process efficiency, order accuracy and create a better experience for customers.
“We continue to present to State Farm the concerns of ASA members. If State Farm cannot provide data showing how this application benefits collision repairers operationally and financially, ASA will respond appropriately on behalf of repairers,” said Denise Caspersen, manager of the ASA’s Collision Division. “ASA has provided State Farm with a timeline for data and will be meeting with State Farm to assess future actions.”
State Farm’s PartsTrader program is currently being piloted in Grand Rapids, Mich.; Tucson, Ariz.; Birmingham, Ala.; and Charlotte, N.C. State Farm recently announced that is expanding the pilot in Chicago, which will be used by roughly 450 Select Service shops in the market starting in December.
“The reason we’re doing this is because [Chicago] is such a big metropolitan area. We want to test the scale and technology of the program in a larger metropolitan area,” said Dick Luedke, media relations specialist for State Farm. “That allows us to scale the program and the technology in that unique environment. Obviously, Tucson and Birmingham are good size metropolitan areas, but Chicago is much larger so we want to do it there.”
Luedke said State Farm does not currently have plans to launch the PartsTrader pilot in any other markets. By December, the program will be used in five U.S. markets, which includes roughly 600 Select Service shops overall.
