Finally, repairers are pushing back over some of these aftermarket parts. Now if we could just increase labor revenues, we might see sustainable profits, don’t you think?
Actually, there’s a disconnect about what’s driving the push-back against aftermarket parts. There may well be a correlation between part price and part quality, but the real reason—the important reason—for the push-back is that substandard parts potentially lack the ability to perform properly in the event of a collision.
As manufacturers continue to lighten vehicles by building them with various composites, there is rising pressure in the auto body business to make sure that repaired or replaced parts function as well as they did before a collision. Lower and lower tolerance for error requires that, and that is bringing to light another concern: increased liability exposure due to OEM requirements.
So the discussion of aftermarket parts’ effect on profits is not the driving force here, nor will it have much impact on a repair center’s bottom-line performance. There are, however, other potential pay-offs being left on the table.
Forget higher labor rates, so-called funny time or other quick fixes as a means to sustainable profit.
Instead, arm yourself with OEM procedural information, document your blueprint for repair, and have your frontline estimators follow a standard practice checklist. (Since January, it has included operations that may have been charged one way but now must comply with NESHAP rules, and most DRP agreements state that a facility must abide by all local, state and federal laws.)
Then, continue charging for work performed and materials used. Do those things and I think you may be surprised at the pay-off.
Ray Fisher is the president of ASA-Michigan. This article represents his opinion and does not reflect the views of ASA-Michigan.
