INDUSTRY NEWS

September 15, 2022

TO EACH THEIR OWN

A deep dive into the consolidation trends of the collision repair industry published by the Financial Post on August 25 offered scathing criticism of the business practices of insurers in the auto repair space, and solutions. Titled “Self-preferencing is cannibalizing Canada’s autorepair industry,” Vass Bednar, head of McMaster University’s Public Policy program, wrote about the reality of vehicle ownership and repair experience, highlighting the ways where consumer choice has gradually eroded. One example is the transition from true ownership to a subscription model where features are withheld by an OEM, even if your vehicle physically houses the technology. This concern grows when the issue of vehicle data is introduced, as a lack of control over that data exposes the customer to the will of the OEM. Bednar is concerned insurance companies are insinuating themselves into the collision repair industry in an unprecedented way. The power insurers have has allowed them a nearly unchecked influence on labour rates and mandate the use of certain parts over those specified by OEMs if they see fit, leaving both repair facilities and customers with little choice in the proceedings, she explains. Direct repair programs are understood for any facility owner, but the idea of insurance companies operating collision repair centres under the auspice of customer convenience is too far for Bednar; and a practice that has been squashed in other industries such as pharmaceuticals.

Bednar points out that technicians and facility owners have long complained anonymously, feeling that their insurance partners undermine their expertise in repair procedures, but are unable to speak out due to fear of reprisal and blacklisting. She recommends a review of the state of competition in our industry to ensure accountability.

SUPPLY STRAIN

A frequent Collision Repair contributor spoke to Global News on the vicious cycle of parts shortages, rental fleet downsizing and strained customer relations that plague the collision repair industry. Chelsea Stebner, managing partner at Parr Auto Body discussed the perilous position many repair facilities as much of the industry struggles to secure OEM parts, paint and other necessary repair materials. A new challenge that has presented itself to Stebner and her team is revisiting long dormant repair jobs. She said that while other industries are stabilizing after the initial COVID-19 lockdown, much of the collision repair industry is only now starting to feel its most severe effects. Ciaran Downes, senior director of national appraisals for Saskatchewan Government Insurance (SGI), told Global that the government does what it can to keep drivers stocked in rental vehicles, thanks to its partnerships with rental companies, but they too are being impacted by a limping supply chain. Downes says SGI is working to identify the most in-demand parts in order to allow halted repairs to resume. Stebner says the situation is worsened by rental companies downsizing their fleets over the pandemic, predicting that the collision repair industry likely won’t return to a normalcy for at least two years.

IN MEMORIAM

Collision Repair magazine is saddened to hear that Guerino Mercanti, founder of CARSTAR Canada, has died following a six-year battle with dementia. Mercanti grew up with his two brothers and nephew in Hamilton, founding Mercanti Bros Auto Body Repair, the predecessor to CARSTAR Collision and Ontario Auto Collision. He regularly came by the shop and put in a few hours of work–especially when his three sons bought two of the business locations. Beyond the collision repair industry, he shared a passion for Italian card games, bocce and hunting with his friends in Hamilton’s San Remo area. “Papa, we will miss your generous heart and kind smile. You were strong until the end, and you deserve to rest in eternal peace. We will love you forever,” wrote family members in an obituary. In lieu of flowers, the family wrote that donations to the Alzheimers Society of Canada would be appreciated.

DUE FOR DAMAGE

How’s the weather been lately? Not great—and the data can prove it. Extreme weather events like tornadoes and hailstorms in Canada are reaching frequencies higher than ever before, increasing the number of drivers in need of emergency vehicle repairs. According to an article first published in the Conversation Canada, data from the Northern Tornadoes Project discovered that current expectations for insured catastrophic loss value at $2 billion. This is nearly double the insured loss values recorded between 1983 and 2008, where the average of $422 million converts to $1.1 billion in modern currency. This turbulent weather has direct implications for the collision repair industry, for better or worse.

THE FOOSE IS LOOSE

Automotive industry legend Chip Foose has been named as the official artist of SEMA 2022, tasked with establishing the aesthetic theme of this year’s event. Foose will provide the vision for how SEMA plans to transform the space of the Las Vegas Convention Center. “This opportunity is allowing me to be creative in a different fashion. Usually, my drawings have been a tool to build the final art, which are the cars that we create at Foose Design, but these drawings are the final art to be used at the SEMA show,” he told SEMA organizers. “I’m excited to entertain and connect with SEMA Show attendees in a new way.” Every three years, SEMA partners with a new automotive artist to help freshen up the general presentation of the show, and with this announcement, Foose joins the likes of Alex Carmona, Max Grundy and Ed Tillrock; all of whom had taken on the role at past SEMA shows. The 2022 SEMA Show is set to run from Nov. 1 to 4.

Foose has been a driving force in American car building and hot-rodding communities for decades now and has earned a number of accolades throughout his career, including becoming the youngest person to be inducted into the Hot Rod Hall of Fame back in 1997.