Alan Goldstein wants you to watch the video. Everyone should see it, he says, because, if you haven’t already, it’s time for the same wake-up call that he received.
The video is only a few minutes long. It’s a simple crash-test comparison; two seemingly identical late-model Hondas—one straight from the factory, and the other already having had its driver’s side A-pillar replaced. And that’s the catch, as the second vehicle had only the A-pillar replaced in a hypothetical test repair performed by Honda. According to the automaker’s repair requirements, the entire high-strength steel door ring should be replaced. No sectioning is allowed; Honda is very clear about that.
Honda filmed a comparison using the parameters of the Insurance Institute for Highway Safety’s standard “small overlap” test, a simulated collision in which the front left of the vehicle hits a small surface at 40 mph.
So, you can guess where this is going, right?
The first vehicle with uncompromised factory standards smashes into the barrier, crumples at the left fender and shoots out to the right. The crash looks severe, but on a closer look, the driver’s side door ring is completely intact (the door can open and close without any hindrance) and both dummies in the vehicle are completely fine. Now, as for that second vehicle, well, this is why Goldstein wants you to watch the video.
“At first, it looks like the exact same crash,” he says. “Crumples in the front, vehicle goes off to the right. But then you see that the door ring crumples in. The door won’t budge when you try to open it. And those dummies? Let’s just say they didn’t make it.
“I’m just shaking my head. This was a repair done to welding [specifications] that just four years ago were standard; just four years ago.”
Goldstein saw the video in early 2015. At the time, he was in the middle of a two-year revival of what was once a three-location, $5 million repair business in Fort Lauderdale—a business he’d recently come out of an early retirement to buy back (he left to co-star on a PBS TV series about vehicle restoration).
“I’m a bit [obsessive compulsive],” Goldstein says, “and I wasn’t happy with what they were doing with the business.”
His “OCD tendencies” led him to overhaul the shop’s equipment (“I wanted the best of everything,” he says) and implement new, more stringent training requirements for staff (“I-CAR Gold became the minimum,” he adds). And the concept of OEM certification started to pique his interest, which is why he watched that video in the first place: He saw it at a presentation given by Honda about its ProFirst Certified program.
“It’s a different game today,” Goldstein says in a blunt, terse tone that gives away his roots as a transplanted New Yorker. “We hear it all the time from everyone—OEMs, consultants, I-CAR—how fast the industry’s changing, how you need to do this and that to keep up. Sometimes you need to see it for yourself and hear it from other [shop operators].”
“It’s not about those plaques you can hang up,” he adds. “Safety and doing things right is the No. 1 reason for certification. This is our way of ensuring that we’re still able to work on vehicles that come into our shop. It’s how we can keep our reputations, how we can keep our businesses. But don’t just listen to me. Everyone needs to see it for themselves.”
A New Era of OEM Involvement
In early July, General Motors sent a mass email to collision repair shop operators and a number of industry professionals asking for feedback on its OEM repair procedures. Borrowing an I-CAR catch phrase, the email stated that the “collision industry is in the midst of a technical tsunami.” GM wanted to know shop habits—who’s using what, how well it works, why certain processes are in place, etc. GM wanted to know how shops, faced with myriad modern challenges that had never previously presented themselves, were coping with a shifting landscape. GM wanted to see how it could better help shops perform safe, quality repairs.
Most importantly, GM wanted feedback from the collision repair industry.
Let’s repeat that quickly with some added emphasis: One of the most established and largest automakers in the world wanted feedback from the collision repair industry. “We want to hear from you,” the email, which was provided to FenderBender by a number of industry professionals, stated in underlined text.
This is a concept and idea that may have surprised and bewildered some collision industry folks in the past, but today, it’s becoming far more common. In fact, Scott Biggs, CEO of the Assured Performance Network, which is the largest exclusive facilitator of OEM certification and recognition programs in the industry, says automakers have become involved in the collision repair process at an “unprecedented rate” in the past couple years.
Just a month prior to that GM survey going live, Fiat Chrysler Automobiles released a statement that it now mandates post-repair diagnostic scans of all its vehicles. Both Honda and Ford have increased involvement on the shop level in developing and advancing their own, respective certification and recognition programs.
Then, of course, there’s the consumer focus. According to the J.D. Power 2016 U.S. Initial Quality Study (IQS), 49 percent of vehicle owners list “expected reliability” as the No. 1 reason for choosing an automaker. Now, when a vehicle owner experiences no issues with the vehicle within the first 90 days of ownership, 54 percent stay with that automaker for their next vehicle purchases. If there’s one vehicle problem? That loyalty rate drops to 50 percent. Three or more problems? It’s down to 45 percent.
“There is a direct correlation” between vehicle issues and brand loyalty, says Renee Stephens, J.D. Power’s vice president of U.S. automotive quality.
Biggs echoes a similar sentiment.
“When a consumer is in an accident, if the vehicle drives even the slightest bit differently down the road, studies have shown the attribute that the OEM, the brand,” he says. “They become far less likely to stay loyal to that OEM, and trust me, OEMs know this very well.”
The industry is changing drastically, Biggs says. As vehicles become more complex, as OEMs fight for consumer loyalty, automakers are looking to play a larger role in the entire lifecycle of a vehicle.
“It’s about time,” says Mark Tantillo, owner of Certified Collision Services in Monroe, N.C. “I’ve been doing this 37 years … and for the longest time, [OEM involvement] stopped at dealerships. The bottom line is that we, as collision repairers, need repair information. We need best-practice procedures. The OE needs to tell people how the car needs to be repaired, and we (as an industry) need to make sure that the cars are being fixed right by the right people.”
The Rise of Certifications
At the time this article went to print, APN had just exceeded 2,100 shops that passed through its program and became certified by at least one automaker. Roughly 700 more shops were at various stages of finishing certification requirements. Those numbers are spread across five OEMs (and an all-encompassing APN certification). Other higher-end automakers handle their own programs. BMW, Audi, Mercedes-Benz, Jaguar and Tesla alone add several hundred more certified shops to the pool.
It’s a pretty simple equation, Tantillo says. You take rapidly changing technology in vehicle manufacturing, whether that’s advances in high-strength steel and aluminum alloy structural designs or the plethora of computer systems and accompanying sensors wired throughout each vehicle; then you pair that with the increased OEM involvement in the collision repair process.
“You look at it that way, and certifications simply make sense,” Tantillo says.
His business, which opened a second location in 2015, has eight OEM designations, including Honda, Nissan, Infiniti, FCA, and Ford’s aluminum recognition program. Certified Collision Services was also one of the first shops to join the APN program when it launched a few years ago.
The reason: business advancement.
“It ensures you have everything you need—from training to facility to software to tools—to work on everything that comes into your shop,” he says. “It’s a confidence boost for customers, and it’s a morale boost for your techs—not to mention it ensures [the techs] stay on the leading edge.
“I looked at it at that time, probably around 2011 or 2012 or so, and thought, ‘This is the way things are going. If I don’t start now, I’ll be behind.’”
Over the past year, FenderBender has conducted extensive interviews with more than two dozen shop operators whose businesses are a part of at least one certification program. Nearly all have identical opinions to Tantillo. Better trained techs. Top-level facilities and equipment. The knowledge and confidence to complete repairs safely and correctly. Business advancement. Sure, many admit, all of those items can be (and must be) checked off regardless of whether your business is part of an OEM program.
“The difference,” says Goldstein, whose Fort Lauderdale Collision has five certifications, “is that you have some oversight and someone who helps you along the way and gives you that list, ‘This is what you need; this is what you need to do.’ It gives you that confidence boost and it keeps you pushing to improve.
“It’s not an argument about insurance work or DRPs. It’s about fixing vehicles correctly.”
The ‘Added Wrinkle’: Consumer Awareness
Marc LaFerriere was tired of praying for hail. No matter the success his business had, he simply couldn’t envision sustaining it.
Dents Unlimited had started as a mobile PDR business, but an enormous hail storm in 2006 changed everything. Work flooded in, and LaFerriere needed a larger permanent home for the work, eventually renting a 17,000-square-foot facility in his homebase of Columbia, Mo. A typical year for Dents Unlimited, LaFerriere says, had been roughly $500,000.
In 2006, the business grossed $2 million. He bought the building at the end of the year.
“That storm allowed us to change the course of the business,” he says now. “Moving into that facility—buying it—our business model needed to change.”
He bought a frame rack in 2008, and slowly, Dents Unlimited became a full-on collision repair facility.
What does LaFerriere’s story have to do with the rise of certifications? Well, first off, it’s an example of how certified shops come from all origins (Dents Unlimited now has five OEM recognitions). It also throws in an “added wrinkle” to the narrative, LaFerriere says.
“The benefits are clear—better training, better equipped to take in whatever comes through the doors, and that extra confidence that we’re doing things the right way,” he explains, “but there’s the whole other part of it: Will it gain me customers? That has to be an important part, right? We went from PDR to full, certified collision repair. You have to wonder: Will customers recognize that?”
J.D. Power’s 2016 U.S. Tech Choice Study points to the increased importance technology plays in choosing a vehicle, particularly on younger demographics. Biggs connects the dots, and says that consumers are far more aware of the sophistication of their vehicles than many in the industry think. It’s causing them to be “more selective” with their repair choices.
And the OEM reaction has already been seen. Nearly every OEM with a repair certification program has a consumer-facing mobile shop locator application. APN also has multiple apps. And Biggs says adoption has already increased at a rapid pace.
“Over a million and a half consumers have already downloaded FCA’s consumer-facing app, and hundreds of thousands have already downloaded our own app for finding shops,” he says. “It doesn’t take long before that really gains a large foothold and consumers look for that.”
OEMs also do additional marketing to vehicle owners in the form of glove box pamphlets and other hard-copy materials, as well as various digital promotions of their networks.
LaFerriere says that consumer awareness hasn’t been an issue, and should only improve moving forward.
Dents Unlimited generated more than $2 million in collision-only revenue in 2015, and is on pace for a nearly 10 percent growth rate in 2016. (The shop also did roughly $750,000 in PDR and mechanical work in 2015.)
“We’re growing,” LaFerriere says. “I attribute a lot of that to becoming certified.”
The Industry’s Return on Investment
Many in the collision repair industry point to the cost of entry as a hindrance to OEM certification, and even more feel that’s a major reason why the rise in certified shops hasn’t been even steeper.
But, all three shops featured in this story say it all depends on how the shop operator chooses to look at it. Essentially, there are two types of thinking: The first is that all costs associated with becoming a certified shop—facility upgrades, equipment, tools, training, etc.—should be considered part of the investment; the other simply considers those pieces to be the cost of doing business today as a collision repair shop.
“That’s simply the way it is today,” Goldstein says. “We put a lot of money into this, into getting up to this level. In all, it was probably $225,000 worth, counting a frame machine and measuring equipment I bought a while before starting this [certification] process. Granted, I opted for the top option each time, but I didn’t spend that money just to get certified. I did it because those tools and equipment and changes to my facility allow us to properly work on today’s vehicles.
“Look, these repair procedures are all outlined by the OEMs. The equipment required is all listed. If you don’t make these investments, you can’t perform the proper work. That’s all there is to it.”
Tantillo agrees and insists that the roughly $150,000 he put into tool and equipment upgrades over the course of the last four or five years should be viewed as a long-term investment required by the changes in vehicle technology, not certification requirements. It’s a cost, he says, that’s simply necessary to “simply being in business five years from now.”
The actual costs of the certifications, Goldstein says, are “nominal.” His shop spends roughly $11,000 per year for all its recognitions, including I-CAR status and a number of other non-automaker programs. In all, the OEM certifications make up roughly half that number. The return on those costs are swift. Goldstein says just on his Honda certification alone, he’s received an additional five to 10 vehicles per month from the automaker’s marketing. Just one ticket easily covers the monthly certification costs for all programs.
“We have this wall in our lobby that we jokingly call our ‘Wall of Fame,’” Goldstein says. “It has all our plaques and everything on it. Just lots of plaques for the certification, for I-CAR, everything. We take a lot of pride in it, and our customers see it, too, and I think it adds to their confidence in us.
“This is the way that our industry is going. That’s why we’ve made this effort. We want to be leading the way and doing it right. Not everyone’s on board with it yet. But we are. Sometimes, you just have to see it for yourself to get that push.”