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Thursday, 23 September 2010 16:25

CARSTAR Media Conference Outlines Changes and Forecasts for 2010

CARSTAR held their 2010 National Media Conferences on Tuesday, September 14, to discuss the changes the company is making in order to better compete in the current economy.

Chairman and CEO Dick Cross began the conference call by outlining CARSTAR’s forecast for the coming year. He said that the successful shops are going to need to not only provide extraordinary performance, but also be able to document it and be prepared to show it to customers.

“We think our collision industry is going to change,” said Cross.

Dan Bailey, President and COO for CARSTAR, also discussed some of the trends facing the collision repair industry in this economy, including several of the mergers going on between companies and the consolidation of multi-location networks.

Both Bailey and Cross talked about how although CARSTAR has lost some stores in the last few months, that a lot of the stores lost were not participating as much as they could have been in the CARSTAR system. They also mentioned how a lot of stores had been defeated by their balance sheet; that some stores couldn’t balance their debt with the loss of value that a lot of things had after the economic downturn.

Cross and Bailey acknowledged that about eight of its franchises have closed in recent months but they said others have doubled their revenue or acquired struggling or closing shops as additional locations.

Bailey and Cross also fielded questions about steering; both felt that shops needed to hold their ethics about customer choice.

“We’re on the sidelines with that issue. We promote that every customer has the right to choose where to have their repairs done but we are not on one side or the other on this issue,” said Bailey.

But Cross also mentioned that stores that have DRPs are likely to get a bigger piece of the repair work available, if the customer does not speak up about a preferred shop they would like to use.

Cross and Bailey both stressed that body shops are entering an era where shops are compared through objective performance-based competition. There is a smaller body of work to compete for and shops need to excel in order to receive business.

CARSTAR has confirmed that going green can make economic sense these days, Bailey and Cross said that CARSTAR has two shops that are green certified and 35 stores that are spraying waterborne paint.

Cross wrapped up the conference by saying that CARSTAR is attempting to get all of their shops on a similar store software. CARSTAR has been working on this for over a year and is now in talks with Mitchell for an appropriate program.

“We still have some road to go before we can launch,” said Cross, adding that CARSTAR is shooting for Q1 of 2011 to launch the program.

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