Canadian collision repairers saw repair values continue to strengthen in October, but production efficiency remained a concern as work-in-progress levels climbed, according to the latest Pulse of the Industry report, produced by Collision Repair magazine in partnership with AutoHouse Technologies.
Average insurance-paid repair orders reached $5,377 in October, up 3.1% year over year and marking the third consecutive monthly increase. Customer-pay repair values also strengthened, increasing 5.2% from September.
"Repair values are recovering, but production efficiency is moving in the opposite direction," said Mike Gilliland, president and founder of AutoHouse Technologies.
The industry-average work-in-progress ratio reached 12.3:1 in October, representing a 5.7% increase against the prior three-month average. Gilliland noted that the ratio has climbed 17% since June, while average touch time remained unchanged at 2.5 hours per day.
"More work is sitting in production without a corresponding improvement in daily productivity," he said.
Average cycle time, measured from vehicle arrival to delivery, reached 13.3 days, up 0.8% against the prior three-month average. The top 10% of performers recorded an average cycle time of 6.1 days, compared with the industry average. Their average touch time was 4.5 hours per repair per day.
For Gilliland, the opportunity lies in improving the movement of vehicles already in the shop rather than simply increasing incoming work.
"The opportunity isn't simply getting more work through the door. It's getting more work out," he said. "Repairers who better control WIP, schedule to available capacity and improve production flow can increase throughput and profitability without adding overhead."
The October report draws on more than 60,000 monthly repair orders completed by Canadian collision repairers. All financial figures are presented on a pre-tax basis.
To read the full report, click here.
