IMI Magazine

Join the club

In the past two years there has been a proliferation of bodyshop groups. Independents have got together and even regional groups have joined forces to provide greater national coverage. The common aim is to offer a stronger proposition to work providers who are looking to reduce the number of partners in their supply chain. Zurich was the first insurer to embrace this concept when, in 2008, it reduced its approved network from around 134 bodyshops to just four regional groups. 

The potential benefits to insurers are that they no longer have to manage over 100 or so individual businesses. There is one contact point, a reduction in administration costs, improved communication, greater cost control and, in the right model, more consistent customer service.

The potential advantages to repairers are that they no longer feel isolated, are more attractive to insurers, have a new found strength as a group in negotiations, better buying power, a stronger status, and, more importantly, more work.

There are three main types of group: Established, independently owned ones such as Nationwide with 73 shops and Just Car Clinic with 23; franchised dealer groups such as Pendragon with 31 bodyshops and Vertu (trading as Bristol Street Motors) who have seven; and the newer, so-called affinity groups made up of individually-owned bodyshops who unite to form a stronger network to compete against the established groups.

Early scepticism
Fix Auto was the first such affinity group in the UK. Its origins are in Montreal, Canada, where it was founded 18 years ago. The brand was introduced to the UK in 2005 and recently signed up its 40th shop. Members pay a fixed monthly fee of £995 for access to a team of people who provide business support and representation to new insurer clients. Fix Auto was met with a great deal of scepticism in its early days, so has the rise of the affinity group phenomena been a threat or a help to its growth?

"It's been hugely helpful," said managing director John Matthews. "When I started in 2005, I was selling into a market which really didn't understand or accept there was a need for this. Back then, it was a question of whether it would work, with bodyshops asking 'should I, or shouldn't I?' Now it's a case of which group is best for me? Our primary goal is to make our shops more profitable and we do that in many ways,  including business improvement, attracting new clients and central purchasing."

Other, more recently formed groups, such as Vizion, SWIRG (South West Independent Repair Group), IRG (Independent Repair Group) and Synergy, are different in their approach and requirements for membership. 

Synergy is the largest, featuring 164 independently owned Kitemark certified bodyshops and 320 vehicle manufacturer approvals. There is no charge for membership, although there are referral fees on each job sent to members. Vizion charges a monthly £250 subscription, while SWIRG is free to members as it is supported by Morelli and DuPont. Based in the South West, SWIRG comprises 11 bodyshops with manufacturer approvals, BSI Kitemark accreditation and an aluminium specialist facility. It handles the biggest repair volume for the Co-op and is talking to other work providers to secure new contracts.

'Strong offer'
Kevin Vokes, bodyshop manager of Hammonds (pictured) began IRG in East Anglia when Hammonds' contract with Zurich was terminated. As a group, it has won new contracts and secured a larger repair volume from existing clients. "We have pre-agreed postcode territories, 18 manufacturer approvals and BSI Kitemark, including certification for CAT A and CAT B aluminium capability, which is a strong offer," said Vokes.

Vizion requires members to have at least one prestige vehicle manufacturer approval, Kitemark accreditation and the AutoFlow bodyshop management system. Members have defined postcode boundaries and work is directed by vehicle manufacturer approval - BMWs go to BMW approved bodyshops, Aston Martin to Aston Martin approved shops, and so forth. "2009 has been a year of building infrastructure and selling the concept," said Gary Brench, Vizion's consultant. "Trials are underway and we are beginning to see volume as potential clients prototype the concept.

"We have 60 members and intend to expand to 150 by the middle of 2010," he added. "Our requirements are stretching, so we are looking at a slower network build phase than other bodyshop groups. For change to happen, we think we need to get the right components in place, otherwise we will still be faced with the same issues the industry has now two or three years down the line."

With Synergy, work is currently allocated on the nearest repairer to the policyholder, but this is likely to change so that a number of factors such as capability, capacity and location are taken into consideration. "We are also assessing which members are adopting the Synergy ethos, which centres around group purchasing commitments and information sharing and we have now graded members in accordance with their participation in the group," said Synergy's Neilson Jones. "Those who participate more in the group will receive more work."

Newest group is National Accident Repair which went live late last year. Its concept was discussed two and a half years ago among some of the most prestigious names in the industry. Nine regional groups make up National, including Seward Group, Just Car Clinics and Howard Basford. Acting as a consultant is Mike Monaghan, formerly with the Motor Vehicle and Repairers' Association, which is now part of the Retail Motor Industry Federation.

'Simple focal point'
"The aim is to provide a simple focal point for the repair needs of any organisation with national or regional accident repair requirements," said Monaghan. "All sites will be Thatcham BSI Kitemark accredited and provide high levels of transparency through IT systems on their key performance and service standards."

Tracy Howard, chairman of Howard Basford, added: "The National is simply about providing a focused, high quality repair solution. The organisation is keen not to stray into procurement agendas or even claims management services. We like the simplicity of the business model which says we are first and foremost about repairing vehicles."

Clearly, bodyshops are keen to be part of something, but with the appearance of so many groups, how many will have a clearly defined 'unique service proposition' to compete in the market? In addition, the ability to make quick decisions that do not compromise individual members cannot be easy if you have to gain agreement from tens or hundreds of individual business partners. It will be interesting to see the changes and achievements in 12 months' time.

Heather Grant