The bodyshop sector, like the battered vehicles it deals with, appears in urgent need of a makeover. Extending the analogy further, a growing number of crash repair operations have been so mangled by recent business conditions that they are no longer ‘roadworthy’ and, as a consequence, have ceased to trade. At present the UK has an estimated 6,500 bodyshops compared with around 12,000 in the mid 1990s. Moreover, there is a widespread expectation that the number will continue to decline, perhaps to just 4,000 by the end of the decade, implying a two-thirds casualty rate over 15 years.
One of the most alarmist assessments comes from Plimsoll Publishing which, based on a survey of 1,000 crash repair operations, claims that 33% of bodyshops face failure during the present year. Another finding from the same survey indicates that 60% were loss making or just about managing to achieve breakeven and that 43% are unable to afford next year’s scheduled pay rises. Why should this be so at a time when demand for crash repair services is so high and continues to increase? The explanation in part stems from the trend towards rationalisation and consolidation which has been evident in other motor trade activities. In the case of bodyshops, structural change has been hastened by the impact of rising costs, falling invoice values and hence squeezed profits.In addition, though, there are a variety of especially challenging circumstances which are exposing the inadequacies of weaker businesses and stretching the ability of even the strongest to survive and prosper.
There is, for example, the need to comply with an increasing raft of legislation covering environmental and health and safety. Some observers believe that many bodyshops are under threat of closure as a consequence of the EU directive on water-based and low solvent paints which takes effect at the start of 2007. At present a mere 30% of UK bodyshops conform to this directive, and there is scant evidence that more than a handful of the more marginal independent operators are planning to make the necessary investment, which means that closure is the only alternative. This seems all the more likely as many of the owner-managers of these smaller operations are coming up to retirement.
Another critical issue concerns skills and training, with a dearth of new recruits and a clearly ageing workforce. In response, Thatcham is expanding its training capability and in May last year launched an apprentice programme. According to Thatcham’s chairman Andrew Torrance: “It’s clear that repair shops need to upgrade the skill base of their workforce.” Earlier this year, training provider Emtec introduced a training programme specifically for bodyshops. Meanwhile – as with other skilled jobs – there are instances of labour shortages being plugged by workers from Eastern Europe.
There is also the need for retraining as vehicle manufacturers use new body materials, including aluminium, and the complexity of contemporary vehicle design requires the use of new repair techniques.
As if this were not enough, there’s conflict within the industry over the best way to police standards. The Office of Fair Trading’s voluntary code of practice has been embraced by the Vehicle Builders and Repairers’ Association as a means of avoiding the threat of compulsion.
In the opposite corner, the Body Repair Industry Campaign (BRIC) believes that the OFT scheme is inadequate and a compulsory licensing system is needed. At the beginning of May the organisation made a fresh submission to the OFT to request a market study on the repair market. Shaun O’Reilly, BRIC research director, notes that the body repair sector has had 13 different voluntary schemes over the past 30 years. “These have all failed because, quite simply, the cowboys don’t join in,” he said.
Another issue involves the targeting of customers. Insurance companies and vehicle manufacturers can provide a high and usually regular level of demand, but margins typically are thin and there is the obvious danger of over-dependence on a single customer. Independent and franchised dealer bodyshops alike complain about labour rate pressure from insurance companies and fear the increasing prevalence of labour-only schemes. In contrast, there’s the potential to generate high profitability from retail customers, but to exploit this market requires a conscious effort and a need for management time and a marketing budget.
It’s against this background that bodyshop management systems can claim to tick most of the boxes in the drive to improve efficiency, from streamlining administrative processes to providing ‘snapshots’ of how the business is faring.BMS providers include Audatex, Autoflow, BMS Solutions, BodyNet, EMACS, MAM Software and Pinetree Consulting. Last year’s feature on bodyshop management systems in Motor Industry Magazine (June 2004, pages 31-34) highlighted a selection of the tools on offer. The past year has seen various enhancements, and detailed descriptions – along with the latest developments – are available on each supplier’s website.
A year ago Audatex introduced a new estimating system called AudaEnterprise. Described as a web-based multi-user system, it replaces the less advanced AudaWorkstation which is being phased out. Audatex claims that AudaEnterprise is more efficient and speeds up the estimating process.In mid-year Bodynet launched an additional module – RepairTracker – to its web-based bodyshop management system. This provides real-time information on repair work, enabling the owner to be kept informed of progress along with other information from the repairer that is relevant. An online questionnaire provides the repairer with feedback concerning the level of service received during the repair process.
An important feature of RepairTracker is that work providers now have a complete reporting suite and no longer need repairers to transfer work data at additional cost to a third party reporting system. Peter Kenny, Bodynet managing director, notes that RepairTracker helps to reduce IT costs and that the industry “finally has a system that can help with customer service and bodyshop planning without the need for any additional investment.”
Leading suppliers of bodyshop management systems