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Comparing Collision Repair in Different Countries

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If I received a pound ($1.55) every time someone asked me what the differences are between the U.K. and U.S. collision repair markets, I’d be a lot richer than I am today. It seems there is a clear curiosity as to how others repair vehicles and how industry works, not just between our nations, but also in Australia, New Zealand, Asia and Europe.

From the U.S. side, I regularly have people say to me that they have heard that the U.K. is a very “advanced” market, and when questioned by colleagues back here about the U.S. industry, they seem to have this presumption that your market is “behind” ours. The same happens when talking about Australia. In all of these seemingly prosperous (depending how you look at it) nations, people assume collision industries in different countries are either ahead of or behind one another.

I try to take a more pragmatic approach to this, one that views none of these industries as ahead or behind—they are just different. What do I mean by different? Let’s start by looking at the core product—the car. Whether you repair a new Range Rover Sport in the U.S., U.K., Australia or Qatar, the car is still the same. It is aluminum (or aluminium) monocoque, incorporating bonding and riveting technologies. Therefore, the repair technique to be used must also be the same—wherever you are—in order to safely reinstate the vehicle back to its preaccident condition.

This means that you are only behind or ahead with regards to the actual vehicle repair if you are not using the correct method of repair stated by the vehicle manufacturer. It’s obvious that in any country you visit, there will be collision shops repairing to differing standards, and there will of course be those who do it “right” and those who don’t understand how to repair it at all, and that’s a completely different subject. However, with regards to why or how an industry may be different, you have to look a little deeper.

It’s all of the influences that surround the repair that seem to make the difference. As we’ve sort of established, it’s not really the repair itself, but how insurers, suppliers, customers and the economic climate behave that is key. Although, particularly in emerging markets, the challenges for vehicle manufacturers in getting their vehicles repaired correctly can be somewhat of a nightmare.

Let’s start with the economy. Now I don’t know very much about economics, but what I do know is that the pressure exerted on an industry affects how it behaves. Let’s take a look at the U.K. I was with a good colleague from the U.S. who was over here in England looking at collision shops and our robotic technology in order to see how it could be applied in Denver. One of the first things he noticed was the price of gasoline. A quick calculation showed that we pay $9 per gallon for the stuff, compared with about $3 back in the U.S.

“How on Earth do you manage to run your vehicles?” Brad asked. Well, we do. Then, having seen an invoice for parts, he saw how much sales tax we pay—20 percent. I won’t mention the words that came out of his mouth, but when compared with his home market, clearly there is a massive difference. It’s those types of examples that have an influence upon why collision repair markets differ.

Then there’s customer expectation. Let’s define “customer.” In our industry, it’s more likely to be the insurance carrier. These guys pay the bill in most cases, so what’s their expectation? In about 1995, an insurer over here decided that it would be able to give great customer (driver) service by giving them a courtesy vehicle while their car was in for repair. This soon escalated to other insurers jumping on the bandwagon and doing the same. Then the terms suddenly got worse. Quickly, courtesy vehicles were being mandated by insurers for shops to supply. That’s right, in order to repair certain insurers’ work, you needed to supply a free courtesy car to every customer. I know of many shops that now have a fleet of 50 vehicles—supplied at their cost, absorbed into the repair! Now you’re starting to see how the markets can be different.

Another example: Paint. Logic would tell you that a collision repair shop would choose its suppliers and paint based upon technical merit, service and price, etc. Not here. In our market, paint has really become a commodity, as it all performs exceptionally well and it’s difficult to differentiate between brands. This meant that paint companies needed to find other methods of selling to shops. Understanding that the bill payer is in many cases the insurer, then why not go to the insurer, dangle a big carrot about paint savings, and get your product mandated? That’s exactly what happened. In order to repair vehicles for one of the U.K.’s largest insurers, you have to use a certain brand of paint. Not only that, but you have to buy from a nominated jobber and the discount you purchase at is negotiated directly between you and the insurer. Happy days!

Hopefully you get the idea that our markets are neither ahead, nor behind, but just different. What I have come to understand is how repair markets evolve, and this is really important. Because the U.K. pressures are so much greater than in other markets, collision repair has probably evolved faster here (don’t assume evolved means better).

And here’s the interesting point to this. Maybe we can reasonably predict what is actually going to happen in the U.S., based on other different, but more evolved markets. Maybe we have a crystal ball as to the next trend, and maybe if we know this, the U.S. industry can better prepare for the future.


Jon Parker is managing director of the Byteback Group, a U.K.-based information technology and services company aimed at advancing the collision repair industry. Parker can be reached at jparker@fenderbender.com.

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