A funny thing happened 13 years ago when Craig Moe was looking for a good retirement investment. He became a shop owner. Moe was an employee for a large dealership group that decided to break off its collision repair operation as separate business. Moe invested in the shop and eventually bought it out.
Those inauspicious beginnings set the groundwork for Santa Clara, Calif.-based Car West Auto Body, a growing six location MSO (with six satellite estimating sites) that caters to dealerships and that could well be on the cusp of a trend that could eventually dictate how every shop performs repairs.
Banking on trends is what this Top Shop is all about. Moe notes that his business model provides dealers and customers with conveniences that make his business attractive. First off, his shops employ techs who must maintain at least an I-CAR Gold status with emphasis on obtaining a Platinum rating. The shops also utilize lean systems to ensure work is performed as efficiently as possible. Employees take part in a bonus plan that rewards efficiency utilizing a formula that compares the cost of the repair versus the time taken to complete it.
Dealers can feel confident that their customers are being offered top-notch repairs as part of a system that promises to return their vehicles as soon as possible. Car West also offers customers other perks, including five-day free vehicle rentals and drop off and pick up of work.
"We know our customers are busy so we make it possible to get work done without ever having to visit the shop," says Moe. If there's a problem with a repair, Car West will send a tech to a customer's home, if necessary, to address the issue.
Additionally, customers can use Car West's website to upload photographs of damage, receive an estimate and schedule service. In an effort to control expenses and assure customers they're protecting the environment, the company has begun installing solar panels on buildings it owns.
This setup attracts $36 million in annual revenue. Car West is looking to grow that figure even more with new facilities, though Moe says currently he's looking to move conservatively, adding one location a year. He believes that will change in time, and eventually he (and other MSO owners) will have to pick up locations in bunches in order to compete.
"There's no sense going into a region and adding a single shop if you're going to be competing with consolidators," says Moe. "MSOs are going to have to purchase other MSOs if they're going to survive there."
Though Moe believes MSOs will continue playing a larger role in the repair market as the cost of doing business increases, he says ultimately those shops best suited to survive will be those with ties to dealers. The basis of that belief is the increasing complexity of vehicles that will require ever-changing repair techniques.
"Within four or five years, the latest repairs are going to be very different from what a typical shop can do," he says. "We're already seeing things like new kinds of welds, rivets and glues in vehicle structures that require special training and equipment."
Moreover, to protect their customers' investment and to provide legal protection for themselves, OEMs increasingly will demand that only shops certified to perform these types of repairs will perform them.
"We're already seeing that with Audi and BMW. They only sell structural parts to certified shops," says Moe. "Eventually, other manufacturers are going to go that direction as well."
Further complicating this picture, says Moe, will be the effect of accident avoidance technology. Fewer accidents will mean fewer repair opportunities for shops. With the market compressed, only those shops financially able to both access OEM training and parts and to compete with other shops (many of them in MSOs) will survive.
Moe plans to be ready when these changes occur. "It's coming. We want to be able to repair cars when it does," he says.
"If you're going to stay ahead of the curve, you'll have to be manufacturer and dealer focused," he says.
Moe's prognostications already are helping him build his business. If they continue to play out, this Top Shop may someday be credited with creating the mold for other contest winners in the coming decade and beyond.