Peterborough, Ontario — March 28, 2017 — Executive Vision is a regular feature in Collision Repair magazine, focusing on discussions with key players in the auto claims economy. Recently, we spoke with Marvin Gillfillan, Vice President, Automotive Refinish Solutions, North America for BASF on industry trends, new technologies and BASF’s broad, chemical scope.
Collision Repair magazine: Coatings are an integral part of the collision repair process. What sort of advancements has BASF made recently in this area, and what might we see in the near future?
Marvin Gillfillan: BASF is the number one chemical supplier to the automotive industry, so having this broad experience and know-how enables BASF to be a market-leading coatings supplier. BASF provides our customers with the best-in-class refinish products and the most OEM approvals of refinish paint providers, combined with the best-in-class services and solutions to support the collision repair industry. Our programs such as Advanced Process Solutions (APS), VisionPlus, Performance Groups, SmartTrak and our full spectrum of training and I-CAR approved industry education are adding tremendous value to our shops and distribution partners.
Collision shops today are continually challenged to drive efficiencies and profits, and meet stringent OEM requirements. BASF wants to be that partner so we will continue to advance products and services that deliver increases in shop efficiency and drive growth and profitability.
The newest technologies that we recently launched are focused around reducing cycle time, including fast drying clears for Glasurit and R-M and UV primers. In 2017 we will launch new additives and primers to enhance the overall finish on lightweight substrates.
In the future, we see many of these same trends continuing, coupled with increased insurance and OEM influence on repairs and technologies, vehicle light-weighting and shop labor challenges. Therefore, BASF is focusing on products, and business services and solutions beyond paint, to help shops meet those challenges head on.
CRM: In your view, what are the three most critical challenges for individual shops?
MG: First, there’s new vehicle anti-collision technology and vehicle lightweighting that requires specialized repair processes to bring vehicles back to the OEM standards. Second, there’s pressure from consolidators and insurance providers for shops to be as efficient as possible and to create market differentiation. Third is talent management and talent recruitment—finding qualified technicians, developing them and retaining them is a real industry challenge.
CRM: Which of those challenges would you say is the most pressing or important? What would you suggest to a shop owner who is trying to deal with that challenge?
MG: They are all very important and, depending on the shop, will vary in importance and magnitude. For many independents and megashops, securing talent is a key concern and managing insurance DRPs is a time-consuming key factor to ensure they get cars to their doors. For MSOs, cycle time and processing vehicles as quickly as possible is a major concern. For dealerships, business management and tracking of KPIs are key challenges.
For each of these sectors, BASF has the knowledge, resources and tools to help them succeed, including our Business Development Manager (BDM) experts who partner with our customers. Our market-leading Advanced Process Solutions lean program, our VisionPLUS Online reports and our Performance Groups support all of these challenges. BASF prides itself on being able to partner with our customers to work side-by-side with shop owners and managers to improve their business by leveraging our best-in-class tools and services.
CRM: BASF has a lot of interests outside of automotive coatings. Does this broad scope help the automotive refinish division?
MG: Absolutely. BASF is uniquely positioned in the automotive industry as the largest chemical supplier. Our strong connectedness and partnerships with OEMs span far beyond just automotive coatings, and allows us to drive innovation with our OEM partners in an era where vehicle technology is changing rapidly.
We will continue to bring innovation to the automotive industry, including the right finishes as vehicle technology changes (e.g. new substrates and processes). Not only does BASF have the most OEM approvals in the refinish industry, but our partnership goes much further to shape the mobility of the future. In addition, we have breadth within the industry by being vertically integrated. BASF spends 1.9 billion Euros on R&D globally each year, over 200 million of which is spent in the automotive industry alone. This enables BASF to continue to bring market leading, innovative products and solutions to our customers.
CRM: In your view, what are the most important steps for a shop to take to secure longevity?
MG: In the competitive market environment we’re in, the shops who manage their businesses most effectively will ultimately win. Having clear visibility of the shop’s performance and profits through KPI management and efficient processes and products, helps a shop to do just this.
Providing customers with a positive customer experience is another differentiating factor for shops. The importance of excellent customer satisfaction continues to be a major driver in our business.
BASF’s long-term partnership approach with our customers to provide best-in-class refinish products and industry-leading service offerings enables shops to maximize short-term and long-term success. In the end, longevity is guaranteed by only one thing: profitability. If a shop is able to offer high quality service and experience to secure repeat customers, proven productivity to win and maintain DRPs and dealer referrals and deliver efficiency to minimize costs and maximize revenue, the shop will be profitable. In the end, the profitable shops with great customer experiences will survive.
CRM: What do you think will be an area of growth for collision repair facilities?
MG: BASF believes there are many different opportunities for shops. Because the market isn’t growing, shops need to be profitable and provide a great customer experience so they can invest in new areas of growth.
For example, the best shops could be in OEM-certified networks. We continue to see OEMs focusing on growing their networks in the light of new vehicle technology. Those shops that invest in the products, tools, training (a major investment for shops, and a concern due to the limited number of technicians) and services, to become certified, will have an opportunity to gain business from competitors.
Collision repair shops could also use their resources to look at vehicle customization services, ride share, or used car dealerships. The opportunities are endless.
CRM: Thinking solely of how it’s going to change the business, what’s the biggest change we can expect in the next few years? The type of change is wide open. It can be technological change, social change, etc.
MG: The collision repair industry is extremely dynamic and I am sure lots of aspects will continue to change. With all the changes in vehicle technology, it will continue to change the scope of the refinish industry. New materials, assembly methods, electronics, sensors and infotainment systems all require knowledge, tools and specialized equipment that does not exist in many collision repair shops today.
As a result, collision shops need to recruit and develop a skilled staff today. They will need to work with many materials, electronics, software and technologies.
Although several years away, we are on the path to self-driving cars, which will, over time, reduce the number of collision repairs. Self-driving cars will also increase the complexity, to safely repair those vehicles. Ride sharing will also change the scope. Robotics and technology that enhances shop efficiency and profitability will also come into play.
CRM: What does the future hold for BASF? Can you give us any hints about new products we might see in the near future?
MG: As a leader in innovation and automotive R&D spend, we will continue to bring new technologies, innovations and services to the industry that will help shops drive productivity and efficiencies. Our customers have had a lot of success with our wide range of business services. We are committed to continue to enhance our products and services to provide our collision repair customers with the expertise, tools and solutions to maximize their long-term success in the industry. Who knows what’s to come: a vehicle coating that will allow the owner to change the colour of the car with a setting from the driver’s seat, or a window that transitions to reduce glare; the opportunities are endless!