TIMEOUS AND SUSTAINABLE REPAIRS FOCUS
By Steve Kessel
Recent body shop meetings drew a large number of our esteemed members to regional venues for updates and strategy collaboration. They came together to discuss a number of pressing issues that currently affect the vehicle repair trade. The issue most concerning is the lack of building on insurer relationships and the ever-increasing admin burdens in our facilities, which have now become a major concern.
There is a noted new trend where insurers in some cases, are now informing their panel approved repair centres that once a vehicle is assessed and agreed by themselves and the broker in some instances, they then don’t want to speak to the client again. In a type of hands off and “take it or leave it” attitude, body shops are left to negotiate with their insured driver clients as they try and restore the damaged vehicles to pre-accident condition.
Lack of qualified opinion is widespread in that Insurers are hell bent on parts procurement for believed best form and fit and in many instances leading to anti-competitive enforcement of collusion of single independent supply groups of parts and not in the interests of quality or reinstatement of accident damage to the position before the incident occurred. Body shops are not even allowed to source their own parts from preferred suppliers, despite having nurtured these relationships for years.
The trend to fit alternative parts that are not up to standard is a huge area of discontent. There is a major degree of collusion between parts supply and insurance companies and a general push to try and minimise costs to the insurer in an effort to micro manage the repair from start to finish on every repair undertaken.
These enforced pricing issues form part of the trade complaints to the Competition Commission, which has now for close to seven years, not acted in any way over insurance dominance to the detriment of the collision repair trade. It is doubtful that a great number of key market insurers have any long-term view of just how these increasingly complex new technologies incorporated in models will ever get repaired. For now, it is just a matter of ever more photos needed for their approval to go on with the client’s repair in question and the blatant fact that material costs like panel and paint as well as replacement sundry products has risen by over 60% of the cost of actual repair but isn’t considered. This doesn’t seem to get on the table for discussion.
Repair shops were unanimous that this needs far more representation from organisations like the CRA to drive home this fact of clear increases in the cost of body repair materials and for processes either rewarded by a paltry incalculable ID block value or totally ignored in the future. In the recent past we have created support for energy subsidisation on having to run generators under load shedding and also the developed sealer app for reward on sealers, rust proofing, stone chip and similar applications and seen as a positive trend to continue.
Another large complaint was the demand for continued settlement discounts which can range from approximately 2.5% right up to 10% for prompt payment of insured vehicles in repair. This is a full-on effort from insurance “partners” to increase their own bottom line to the detriment of the collision repair business.
An area of further demands from OEMs also came under the spotlight. Some major manufacturers have issued new service level agreements which were very one sided documents in many areas with specific unfavourable demands being noted in the repair of their brand. There is far too much crossover in these programmes which leads to unnecessary monitoring and extra profits for some organisations to enjoy and we are not really sure what’s in it for the body shop at the end of the day?
When viewed against China, the USA and other free markets in body repair, South Africa shows that there are far too many programmes in place. Only Mazda for instance, have abandoned their approval programme and outsourced it to the CRA, RMI and other trade bodies who under our all-embracing new consumer act actively control and resolve any complaints that may occur in a repair that might end up in an adversarial mess. It is true to note that with over 600 body shops in repair, very few complaints were received against Mazda last year, which shows that the trade bodies know what they are doing and are able to mediate situations far better than most.
