|OEs chasing higher mileage means more exotic materials|
|Articles - Features|
|Monday, 19 March 2012 12:57|
By Michael Pistol
Toronto, Ontario -- March 19, 2012 -- In recent repairable estimates, parts make up approximately 44 percent of the cost of the repairable estimate. Labour comes in at approximately 43 percent, with paint and materials rounding out the total. However, according to Mitchell Canada, for Q4-2011, all parts types fell in usage when measured by the number of parts used in the average repairable estimate - declining when compared to the same quarter in 2010.
New economy, social and technology data suggests that the current state of our industry is about to change – and in a few areas, radically.
One trend that is already having an affect on your collision business is the tendency (and necessity!) of OEMs to chase higher mileage.
You have probably already observed the proliferation of exotic alloys, titanium and aluminum. Newer vehicles are geared to reduce their weight and save fuel, and OEMs are introducing more aluminum panels on vehicle architectures. The main reason for this is the never-ending quest of OEMs for higher fuel efficiency. The 2012 model year also marks the first step in a 5-year march toward compliance with federal fuel-economy regulations of 35.5 mpg (6.6 L/100 km), which will cost the industry about $50 billion to achieve. After 2016, automakers will begin working toward a fuel-economy standard of 54.5 mpg (4.3 L/100 km) that by 2025, will cost the industry $150 billion.
Advanced technical knowledge of the types of metals, electronics, hybrid technology, and the step-by-step OEM recommended repair procedures will be necessary. This will be needed to completely assess the full extent of damage to the various complex electrical and drive systems before a carrier can authorize repairs.
The U.S. Center for Automotive Research (CAR) studied the impact of CAFE standards and predicted that start-stop technology will be in roughly 36 percent of vehicles by 2025 to meet the aggressive CAFE standard. The CAR study estimates that 35 percent of vehicles in 2025 will be hybrids. Expect the same ratio in Canada, albeit a touch smaller.
The quality improvements in light vehicles over the past two decades have resulting in a huge increase in survival rates of light vehicles in Canada. Some 43 percent of passenger cars now last at least 15 years, and about 60 percent of light trucks last at least 15 years as well. These long lasting vehicles have resulted in a huge increase in vehicle ownership in Canada – a mixed blessing for the Canadian collision industry. Thus, virtually every analysis concludes that the number of volume per/facilities is declining. About four Canadian-based networks now process close to 40 percent of the industry’s repairs, and the collision industry’s consolidation is reaching its pinnacle – especially in the light of collision shop retiring baby-boomers. However, shops in western Canada may be luckier, because of labour’s increased mobility.
Michael Pistol is a graduate of Polytechnic Institute in automotive engineering, and the founder and publisher of TJAA, Canada’s automotive magazine. He is also the founder of Red Code automotive conferences and TJAA Automotive Analytics Group.
|Last Updated on Monday, 19 March 2012 14:18|
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