For Ron Reichen, making a big investment in earning Audi repair certification has him on track for a profitable payoff. The owner of Precision Auto Body & Paint in Beaverton, Ore., sent two top technicians to two weeks of Audi school and added more than $400,000 in specialized repair equipment to earn the right—and the auto manufacturer’s stamp of approval—to repair Audi vehicles. Thanks to this new expertise, both the local dealerships that feed Precision and the area’s Audi drivers now have high confidence in the shop’s repairs. Reichen’s customer base is evolving to reflect that trust.
Admittedly, the tanking economy has altered the shop’s payoff projections. But when things do turn around, the certification has Reichen and his team positioned for 15 percent annual growth.
MAKING THE CUT
Reichen’s choice to pursue authorized manufacturing status stemmed from the type of repairs the shop was already performing. “We were doing repair work for sponsoring dealerships, so it was a natural progression to stay abreast of the product lines they were pursuing,” he says. Gaining credibility as a shop that could repair Audis—and repair them well—was a priority for Reichen.
The first step to becoming Audi certified requires that a representative from the manufacturer visit the shop. That visit determines whether the facility will gain approval to pursue training, and it’s a visit that quickly weeds out those that aren’t up to par. “It’s very intense,” Reichen says of the process, which began for Precision in 2005. “Audi sent two engineers out.” He says they inspected everything from the shop’s landscaping to its waiting area to its bathrooms.
Similarly high standards were required of Kye Yeung, owner of European Motor Car Works in Orange County, Calif. His shop was visited by representatives from Aston Martin and Jaguar, two manufacturers that have since authorized his repair center. “The shop has to be immaculate,” he says, noting that his waiting room had to be a certain size and all equipment had to be state of the art.
The standards are so high, Yeung explains, because the manufacturer sees the body shop as a reflection of itself. A less-than-impeccable shop means an Aston Martin or Jaguar owner is likely to be less than impressed. And that reflects poorly on the car brand.
OFF TO TRAINING
Every vehicle-specific certified repair program has unique training requirements. Some provide education through an authorized training center such as I-CAR or Universal Technical Institute. Other manufacturers, like Aston Martin and BMW, for instance, handle their trainings directly.
After receiving approval from Audi to pursue its certified repair program, Reichen sent two technicians to I-CAR headquarters in Appleton, Wis., for Audi training in 2007. The techs spent two weeks gaining hands-on experience through the I-CAR-based program.
Yeung also sent technicians to Appleton for certified Jaguar training, but Aston Martin required something more for its certification. “You actually travel to England,” Yeung says of training with the British manufacturer. “You spend a week [there] working with the instructors, cutting an Aston Martin apart and putting it back together.”
THE EQUIPMENT NEEDED
Each car manufacturer has its own equipment requirements depending on vehicle technology. While Reichen’s techs were away at training, he began preparing his shop to repair Audis. Because the vehicles have aluminum bodies, he invested $400,000 in a special clean room to accommodate the cars. “It’s a designated room in the facility that metal cars can’t be in. The dust is collected in a special vacuum system,” he says. Tools and equipment used on steel cars can’t come into contact with aluminum vehicles, such as an Audi, because they could cause corrosion.
Like Reichen, Yeung also invested in buying the proper equipment to repair aluminum body luxury cars. He spent $60,000 apiece on six racks needed to work on Jaguars. Of the special room designated to repair the vehicles, he says, “It’s a shop within a shop. The tool costs are so high because you’re buying things that can’t leave that room.”
CONTINUING EDUCATION
“Staying on the cutting edge of technology to maintain our expert status in knowing exactly how the manufacturer wants the car repaired,” says Reichen, was part of his motivation for pursuing the Audi certification. That commitment to training and education has allowed the shop to draw Audi customers from beyond its normal six-mile-market area. Now they come from as far as Alaska, Washington and northern California.
Reichen says one of the most valuable things about being Audi certified is that he and his staff are continually learning. “[It] keeps us qualified and connected with the latest technology as it changes,” he says. “It prevents us from becoming lethargic about our skill sets, [and] it allows us to set ourselves apart from run-of-the-mill shops.”
In fact, Audi requires that technicians be re-certified every two years. In the meantime, they receive Audi repair updates via CD. Four times a year, Reichen meets with an Audi certification representative to review and discuss his shop’s handling of Audi repairs.
—Kye Yeung, owner, European Motor Car Works
WHAT TO CONSIDER
While becoming manufacturer certified offers long-term benefit, it’s critical to prepare for the near-term costs and to assess whether the potential gains are big enough to off-set the early commitment. Reichen, for instance, has yet to recoup his company’s initial investment. Because of the tough economy, he projects that won’t happen until sometime between 2011 and 2015. Still, given what Reichen knows about Precision’s location and the fact that his shop’s clientele is dealership-driven, he believes the investment in certification was the right move.
“We did a significant demographic study before we aligned ourselves [with Audi],” he says. “We’re six miles from Nike’s world headquarters and a big Intel plant that employs 4,000 people.” He knew that the income level of these folks made them likely Audi buyers. “You have to position yourself in the right area,” he says. “How many cars are in the market area to support your business?”
Yeung agrees. His California location gives him an opportunity that can’t be found just anywhere. “Demographically, how many Astons am I going to repair? L.A. is saturated with these cars, but if you’re in the Midwest, the ratio of people driving those cars is far [smaller],” he explains.
Precision also feels confident its Audi work will be supported by referral business. “Much of the work comes from dealerships,” Reichen says, emphasizing the importance of not only knowing your market, but also knowing how to market to your market. He’s developed relationships with local dealers, who’ve come to trust the quality of work. That, in turn, means more business for the shop.
WORTH THE INVESTMENT
Since earning the Audi certification, those specialized repairs constitute 25 to 27 percent of Precision’s business. Less tangible but no less important: employee morale is up. Reichen explains that because the equipment needed to repair aluminum cars is so expensive, shops are able to charge higher labor rates, and techs, then, earn higher pay. “It lets techs that participate in the program have lives,” Yeung says.
Higher labor rates offer another benefit, too: They help “offset the cost of the equipment needed to fix these cars,” Yeung points out. Once those equipment costs are covered, the niche marketing really starts to pay off. “You’re participating in a program a lot of people don’t have,” Yeung says. “Right now, with the economy and its downturn, you have people doing as much marketing as they can. [But], because we have a niche in the industry, we have a continuous workflow. If you have a Jaguar, there are not a lot of places you can go. Basically, [a certification like this] reduces your competition.”
