By Mike Davey
Hamilton, Ontario — August 9, 2016 — No country exists in isolation. Technology has brought us all closer together, while at the same time dissolving barriers that prevented communication.
We live in an increasingly globalized world. Your insurance partners, and many of your suppliers, are frequently the local arm of an organization that’s global in scope. Some repair organizations are even expanding globally. Fix Auto’s recent entry into Australia is evidence of this increasingly global view.
The International Bodyshop Industry Symposium (IBIS) draws together key influencers and thought leaders from across the globe to discuss the trends and factors impacting the collision repair industry both at home and abroad. Collision Repair magazine is the exclusive Canadian Media Partner for IBIS.
In this story, we are pleased to present information on Australia’s collision repair industry. The information was originally prepared for IBIS by Sam Street, Editor of Australasian Paint and Panel.
According to estimates from key suppliers in Australia, the country has about 3,000 body shops currently in operation. This includes independents, networks, dealerships and insurer-owned autobody facilities.
This is one area where Canada differs markedly from our cousins down under. The Capital SMART network is owned and operated by Suncorp, an insurance company. It is the second large network in the country at approximately 30 sites as of the end of 2015.
The largest network, however, is AMA Group, which grew considerably when it purchased Gemini Accident Repair Centres in September 2015. The company operates various brands across Australia, including Mr. Gloss, which bills itself as “Victoria’s Leading Prestige Smash Repairer.”
This is the first thing you will notice when examining Australia’s industry: the use of the term “smash” where we would say collision. The term is like almost everything about Australia when you compare the nation to Canada. It’s just different enough to make you sit up and take notice.
In total, AMA Group operates approximately 70 sites, making it the nation’s largest network. Sheen Panel Service is the third-largest network in Australia, with 25 locations.
This is likely the second thing you’ll notice. Consolidation has not proceeded at the breakneck pace that we’ve experienced in Canada. Our national networks have over 200 facilities across the country. Assured Automotive, which operates solely in Ontario, has around 60 locations, almost as many Australia’s largest national network.
That might be about to change. The IBIS Report identifies two of the biggest trends in the Australian industry: “Major trends are consolidation and a move to larger, higher volume repair facilities. Increased pressure from insurance companies for repairers to improve cycle times and offer consistent average repair costs have led to many businesses increasing their shop footprint to allow for a higher volume of generally similar-style repairs.
“If shops repair both light and heavy hits, many have separated these processes either in different buildings or different work streams. In order to speed up key-to-key times there has also been investment in the latest infrared drying equipment and a heightened focus on ‘lean’ techniques.”
The report also states that the general trend towards larger shops is “squeezing out a huge number of smaller, traditional, family-owned single site operators as volume is channeled through the insurer-approved shops. Although there is no way of tracking through statistics, anecdotal evidence and feedback from suppliers indicates a significant number of smaller shops shutting their doors.”
You might see some similarities with what’s been happening in Canada over the last few years. In fact, the situations seem so similar as to be almost uncanny.
In addition to the operators listed above, there are major affiliation groups operating in Australia, Car Craft and Australian Accident Repair Network (AARN).
Car Craft is a buying and networking group which began in Western Australia and then spread to Queensland. Last year the group announced its intention to spread nationwide and to be a force that allows repairers to gain the buying advantages of MSOs while still maintaining total independence. Since then it has added members in the Australian Capital Territory bringing group numbers to just over 70 shops. It has also recently announced that all its members will comply with a set of shop standards developed by the Australian Motor Body Repairer Association called National Shop Grading.
Turning to training, the report notes that “I-CAR considers that many repairers aren’t factoring in the impact of new vehicle technology as much as they should. The organization feels that only a small section of repairers and industry stakeholders are paying any real attention to the training necessary to repair new cars accurately. Research indicates the majority of body repair technicians are five or six years behind where they should be in terms of knowledge, with many not understanding the basics of high strength steel repair and joining methods, let alone the sophisticated electronics and driver aids currently seen in many modern vehicles.”
In conclusion, “the industry is at a crossroads with a number of directions possible which will depend on insurance industry trends, the success of affiliation groups and whether the relatively newly consolidated businesses can integrate, thrive and continue to influence market forces.”
