The 10th annual IBIS, held in London in June, included as many presenters from outside the industry as it did collision repair experts. The goal, conference director David Lingham said, was to offer some fresh perspectives and a look at how comparable issues are being addressed in other industries.
Here is a wrap-up of some of the more striking and interesting comments and insights offered from the IBIS podium this year.
Future view of the OEMs
Prof. David Bailey, an automotive analyst with the Coventry Business School in the United Kingdom said that despite the growing interest in electric-powered vehicles, collision repairers can expect to see plenty of diesel and gas powertrains for the foreseeable future. Even by 2020, he predicted, only about one-third of new cars will have electric powertrains.
Although 10 automakers currently account for about 75 percent of the vehicles currently being produced, Bailey said he expects to see even further consolidation among automakers through mergers, acquisitions and alliances (such as OEMs sharing more jointly-developed platforms across multiple auto lines). Some automakers may get out of the assembly process altogether, he said, focusing on developing and branding vehicles that are actually manufactured by suppliers.
The challenge of non-OEM parts
Although Jack Gillis, the executive director of the Certified Automotive Parts Association (CAPA), spoke on a variety of topics at this year’s IBIS, he touched on the latest non-OEM parts controversy surrounding non-OEM bumper reinforcement bars and other structural parts.
He showed a video of some of the crash testing CAPA has done of such parts. One non-OEM bumper energy absorber visually appeared to match its OEM counterpart well, even down to the marking indicating what type of plastic it was made from. But lab testing showed the non-OEM part was actually made from a different type of plastic. When crash tested at 6.1 mph, the OEM absorber deformed but sprang back, with only a small amount of crushing and cracking; in the same test, the non-OEM version shattered.
“We’ve had a very difficult time finding aftermarket bumpers that are actually the same as the car company bumpers that get produced,” Gillis said at IBIS.
Standardized estimating reduces charges
Richard Nathschlager, who oversees Audatex in Central and Eastern Europe, offered IBIS attendees an overview of the industry in such countries as Poland and Russia. But perhaps the most striking statement in his presentation came during his discussion of Romania, a country in which insurers are just now establishing repair shop networks to handle the approximately one million insurance claims filed each year.
Audatex, Nathschlager said, introduced its products in Romania starting in 2005, and already nine of the country’s top 10 insurers are using it and requiring shops to do so as well. The impact, he said, has been dramatic.
“What happened was not very funny, not very nice for the repairers, because (repair costs) went down by 20 percent,” Nathschlager said.
He said some shops, however, have seen as much as a 50 percent increase in volume for those lower prices.
“This is a good example of how a standard can work and help both parties involved in the business,” Nathschlager said. “Romania shows that establishing our system in a market brings both parties together. We create common language. We create a standard. We have a common understanding now.”
Finding common ground is key
Viewing the common interests that shops and insurers share was also one message brought to IBIS by Prof. David Bland, the former director general of the Chartered Insurance Institute in the United Kingdom. Clearly more of an expert and advocate for insurers, Bland also did not hold back from being critical of such practices as that of some U.S. insurers to “cash out” policyholders by giving them a check and “just saying go get (their car) fixed.”
“That is not high standards in the insurance industry, and part of what people in every industry have to do is hold the others in their industry to uphold standards,” Bland said.
Bland was also asked about ways to bridge the gap that often seems to separate repairers and insurers. He said shops should be “completely transparent, especially in costing and billing, and then you can challenge the insurers to do the same.”
Both sides, he said, must reach “an understanding that by networking together you can both gain business advantage and cost-effectiveness.”
“If both sides are seen as having proper standards and ethical dealings with each other, and are not trying to chisel each other’s market share or market return, then you begin to build a basis of confidence on which you can go forward,” Bland said. “There’s no better way.”
Similar pressures in aircraft industry
One of the IBIS speakers who clearly brought some perspectives from a parallel industry was Howard Leach, head of operations of the aircraft safety academy in the United Kingdom. Leach discussed how airline pressures to get and keep planes flying sometimes comes into conflict with need for safety, maintenance and repair work and inspections.
Leach was asked, for example, about how if collision repair standards were established in the United States, current technical and commercial practices—and the sometimes seemingly conflicting desires of shops and insurers—can be balanced.
“You’re talking about a cultural shift.” Leach acknowledged. “One of the key phrases we often hear is, ‘If you want me to be safe, I can’t get the aircraft out on time.’ So we’re almost holding safety up against commercial pressure. The challenge is to get everyone to actually recognize that if you get it right the first time, it’s going to help you with your business case anyway. You’ve got to shift people’s paradigms so they align safety and business in the same breath. Because they really are the same.”
The reputation of the “greater industry”
Also asked to speak at IBIS about how to bring together those with conflicting views was John Bercow, a British lawmaker who last year was elected Speaker of the House of Commons. Bercow, the 157th Speaker in Britain’s long history, drew laughs at the start of his presentation by acknowledging that although his 5-foot-6-inch stature ranks him among the shortest people to hold the title, there were some shorter speakers in centuries past—at least after they were beheaded.
Bercow was asked how an industry in which stakeholders such as shops and insurers may prefer that different standards be established can bring those disparate views to common ground.
“That is very difficult,” Bercow said. “You’ve got to decide whether the collective reputation of your industry depends upon uniformity. If within a particular sector, different companies think the rules mean different things, that is a recipe for some conflict and it’s very difficult to then claim there is an industry standard.”
One key to consensus building, he said, is to establish a timeframe under which all sides agree to produce a result.
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