Are you getting your piece of the profitable ADAS pie?

April 3, 2023
Unlike previous model years, now every car and light truck coming off the assembly line has some form of ADAS. It’s not going away.

Is your shop ready to make money?

It's a stupid question, I know. But many automotive business owners and managers are kicking and screaming their way into the future of automotive repair. And I can guarantee that those who scream the loudest will be the ones who lose breath the quickest, subsequently closing their shop doors indefinitely. Then, there’s the other end of the spectrum. Those body shops who are cheering about having dessert before dinner and helping themselves to a slice of the $53 billion-plus pie that was served-up in 2021. That's how big the market was, according to IBISWorld industry research reports. The numbers aren’t out for 2022, but rumor has it that it will take the cake. 

At the forefront of this profit pastry cart: advanced driver assistance system (ADAS) repairs, calibration/recalibration. Pushing the wagon are the corporate-owned body shops and dealerships across the U.S. And they have too much work to handle. They need help. They need independent shops to help service ADAS systems on a growing number of vehicles. In fact, according to Statista data for U.S. ADAS unit production volume from 2014 to 2021, there are more than 18 million-plus roadworthy vehicles. Unlike model years before, now every car and light truck coming off the assembly line has some form of ADAS. It’s not going away.

How the big boys set up ADAS

So how does the corporate world outfit its shops when it comes to repairing the technology? In bulk purchasing, of course.

There are discounts in numbers: If you are a corporate-owned body shop or repair facility, the capital outlay will be less than the individual independent shop. Also, the bay areas need a facelift to support the surrounding structure to be ADAS calibration/recalibration friendly. The ideal calibration/recalibration bay is approximately 1,000-plus square feet. This, too, will come with a volume-markdown per contractor’s reach within regional and/or states.

I’ve been in hundreds of corporate body shops. Most companies use the same blueprint or a close variation with modular walls. For these flexible stores, morphing into ADAS ready bays wasn’t difficult.

Then, there is the equipment purchase price point. Again, corporate advantage: wholesale pricing. Even though the larger, corporate structures have significant purchase power, there are nuances that the individual body shop can take away from how corporate is orchestrating their ADAS capabilities.

Learning from the corporate world

The independent shop structure: There are ways to decrease construction costs to make this technology fit your bay. Contract with family members, friends and customers who are licensed in the local, construction industry. Barter shop labor to construction labor and/or parts. There are various ways to make this happen. But before you do, make sure that your accountant is aware of how you make these capital improvements on your leased or owned building.

When Virginia-based SOS Repair started their family shop in 2011, the service menu concentrated on automotive basics just like the other 89,000 body shops in the U.S. (according to IBISWorld). In 2019, shop family members — Steve Davey (father), Melissa Anderson (daughter), and Chris Davey (son) decided to add ADAS to their services and dedicated a bay for calibration/recalibration purposes.

“I wouldn't say the space was completely 100-percent ideal, but it was enough to get us started,” said co-owner and ADAS technician Chris Davey. “Since then, we’ve redone the floor and added on to this (ADAS) dedicated bay,” Davey said. “I do some smaller work as well in the (ADAS) bay... airbag installs and stuff like that. It’s all 'clean work,' is what I would call it. The area stays clean for ADAS.”

Equipment options

Now that we have the multifunctional, dedicated space in our place, it’s time to check out the equipment brands versus our shop needs. First and foremost – before we even look at any type of ADAS equipment – we need to ask ourselves a lot of questions:

  • Does my shop currently farm out alignments but I'm considering adding ADAS to my shop menu?
  • How stout is my present-day aligner and rack; is it due for an upgrade?
  • Is the shop to which I sublet my alignments qualified to perform ADAS quality calibrations?
  • Do I purchase outright, or should I lease-to-own?

There are more — always more answers needed before opening up the checkbook. And don’t forget the alignment rack right down to the turntables, which are another neglected component that can have major repercussions when it’s time to "shake hands" with the static panels or dynamic drive. Then there is the machine’s ability for future updates. We all know that the well-seasoned technician can align a vehicle with an independent camber/caster gauge on each wheel hub and a tape measure. In my humble opinion, that’s not the proper equipment to verify alignment for an ADAS adjustment, but my point is it’s the automotive professional behind the wrench who is key to getting the most accurate x, y, and z pinpoint. The aligner – capable of providing before/after specs – is the tool used before anyone ever thinks about calibration/recalibration. If your aligner had served your shop well, but is getting on in years, you may want to consider looking at a system that is an all-in-one aligner and ADAS calibration/recalibration package.

In the service structure at SOS Repair, an aligner was already in place. The group concentrated on the ADAS equipment purchase; researched the best fit for their clientele and budget.

One advantage that independents have over corporate structure: The ability to look past sales brochures and pricing and deciding what is right for your shop. It’s an objective choice. Do they add-on the expense of an aligner to the ADAS equipment or purchase the latest aligner-ADAS combination? Or start out with a smaller ADAS package that can grow with the service demand? These scenarios and numbers need to be addressed along with KPI adjustments – with your (again) accountant.

Post-purchase, the business needs to market the new product offered. When Davey is out and about in the community, his business follows him wherever he goes. And people are watching his contributions. He returns the support he receives from his neighborhood by being an active member within. He’s involved with the local Jeep club, “Toys for Tots” Christmas drive and even threw his hat in the political ring and is running for a school board seat. Word gets around…people reciprocate.

“We’ve reached out to other shops in Winchester (Virginia), and as far as I am aware, we are the only independent shop that does ADAS. We set up with most of the major body shops and do their ADAS, too. Not only are we doing B2C (business-to-customer) but B2B (business-to-business) as well,” Davey explained as he was about to recalibrate a 2023 Kia Carnival from another shop. “It’s excellent! Glad we did it!”

And you don’t want to overpurchase your ADAS equipment versus your available space. For example: Do you have the area ability to calibrate/recalibrate the surround camera for a Ford F-150? The area needed is approximately 45-ft. by 24-ft. or +/- 1,100 square feet. The only larger mat made has been designed for Porsche – at $7,000-plus -- and you drive over that target. If you don’t have the room, don’t make the purchase, and instead invest in another ADAS component that suits your needs and area requirements.

Lessons learned from mobile technicians

What happens if a shop cannot dedicate a bay to ADAS? There are options. And mobile technicians are the first to discover those possibilities.

There’s a growing number of nomadic professionals who are getting a taste of that profitable pie and added ADAS into their menu. Contrary to popular belief, these calibrations/recalibrations cannot be performed outdoors. The resets need to be made in a controlled environment. When traveling techs visit shops to perform a static reset, sometimes they don’t have the required space or ideal conditions (i.e., windows, wall coverings with patterns, etc.). What’s the fix? Your local commercial realtor knows.

Contact the local board of realtors to get a couple of reliable, commercial brokers. There’s a lot of empty property out there and ADAS is a clean repair. Landlords would rather lease warehouse space by the day or week for calibration/recalibration repairs than let it sit empty and lose money. And don’t forget that this rental is part of doing business, a pass-through to the customer.

Another ADAS trick we can learn from the mobile technician is bay organization. Most mobile technicians have either a P-series truck or trailer. The items needed for ADAS are right at their fingertips, organized and ready to use. They don’t scramble for tools or targets and make the most of their time making money. Organize your ADAS bay like those traveling professionals. And take advantage of the latest in target cabinets. One scratch on a target board – damaging the finish – and it just became a piece of art to hang on the wall instead of in front of a car or light truck.

The cost of doing business

There are approximately more than 338,000 body shop technicians out there, according to IBISWorld reports. And if you were to stick an ADAS tablet in one hand and a target in the other, most would not know what to do with either device. That’s why in the dawning ADAS age, technicians must learn sensor applications and their shop equipment capabilities before performing a flawless calibration/recalibration.

It’s just not punching a bunch of tabs on a scanner. There’s a reason for the madness. And when the madness goes sideways, the technician needs the ability to understand vehicle topology and ADAS design to get back on track. Learning the equipment or the concept when a vehicle rolls into the bay is an opportunity to learn bad habits and incorrect functions. Don’t let that happen in your shop. Make time to learn about this here-to-stay technology and the equipment purchased. Most manufacturers have in-person (at your shop) hands-on training. Others have supporting videos and customer support lines. Whatever the training venue – take advantage of all qualified training.

Notice I said qualified. Internet video clips by “Shade Tree Joe” — who’s there to show you the latest shortcuts and how to make homemade targets is not the way to go. This type of medium is not a recommended course to follow within this ever-changing industry. Be aware of what you read and watch when it comes to technical training. And many social media outlets we first looked at for entertainment are now hosting training. Be careful who you watch; collaborate. It may not be the optimal choice of training opportunities.

“Training is important,” Davey said. “Last year we were at STX2022 in Orlando. And we already booked to be at training in Nashville. Not only is my sister going, this time for business classes, but I will be there, along with my dad, taking every course possible, including more ADAS.”

Part 2: Get certified. There is no better way to show that your shops’ technicians have the ADAS chops than to be certified L4 (ADAS) by the National Institute for Automotive Service Excellence (ASE). And this isn’t an exam that you can study and pass. You need to have been involved in calibration/recalibration prior to answering questions on the test. You must be either ASE-A6 (Automotive Electrical) or ASE-B5 (Collision Mechanical/Electrical)-certified before you can register for the L4 exam.

There are tens-of-thousands of body-repair shops across the country, all striving to be the best. It’s time to move forward and make your shop the “go-to” facility in your area. Get involved within the community. Get trained. Let word of mouth tell others that your facility provides great service and one-and-done ADAS results.  

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