Looking Ahead - Collision Repair Magazine

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Volume 6

Issue 1

Looking Ahead

Written by Jay Perry

Saturday, 17 March 2007

The past can teach us about the future if we know how to read it. I was informed that this issue of the magazine would be a retrospective in honour of the five year anniversary. I was asked to have this column look ahead to the future as kind of a counterpoint. The industry cannot rest on its laurels. We need to consider the past to devise strategies for future success.
It took me about 2.4 seconds to realize that the past 24 months in our industry have been among the most tumultuous in its history. Within the past six months we have discovered that the world can be turned upside down overnight.
I am speaking about what I call the ‘earthquake’ in the shifting of the various DRP arrangements and agreements our industry has with the insurance industry. Quite literally some shops are receiving a watershed of new work from DRP accounts while others have had 40 per cent of their referral work dry up. That’s upside down, overnight.
So what does the future hold for the industry? I believe it is still a very good business to be in, otherwise I wouldn’t stick around and do the kind of work I do. I believe it holds a good financial future for those that can be flexible and creative. I believe it’s still something to be proud of and at the same time not satisfied with. I believe it holds challenges greater than we think and solutions better than we hope for.
The reality of the industry is that it is always facing challenges. These challenges are not just from the insurance industry which challenges us to contain costs. Challenges also come from government, consumers, technical problems, workforce influences and more.
The government continues to raise taxes. In many areas this has put a reverse ROI on the land shops sit on. It is in the interest of the land owner (presumably the shop owner) to sell off the land for development. The cost of replacement is often prohibitive and so we see the decline and ultimate demise of shops that have been around for as long as three generations.
Government also puts legislative pressure on us for environmental issues. No where is this more evident than in the quickly approaching switch to low-VOC coatings. Some shops will not be in a position to make the change and will have to shut their doors.
Although progress has been been made in attracting youth to our trade, we will still fall short due to retirement.
I think these things emphasize that the industry is headed toward a shrinking capacity of supply, one more in alignment with demand due to attrition of shops. The workforce will be redistributed appropriately.
Rates will rise significantly over the next five years as the reality of shops doing the right thing for the right price takes over. The environment will be protected and we will have invested heavily in that protection.
We will constantly be squeezed out of prime areas due to NIMY (Not In My Yard) syndrome and increased land values, which will necessitate different ways of looking at the re-manufacturing plant and its location.
Although the future holds challenges, I believe it is business as usual because we have always been challenged to do what we do better, faster and cheaper than we currently do it. Nothing wrong with these things, just progress and I believe it to be for the good.

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