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THE ‘NEXT NORMAL’

Taking stock of the Canadian collision repair business

By SYLVAIN SEGUIN, EXECUTIVE VICE PRESIDENT, FIX NETWORK CANADA

After a little over two years of restrictions, Canadians can finally see their lives returning to normal and back to face-to- face interactions—in phases though. We are not out of the woods yet, and it may take us quite some time to adapt to the “next normal”.

I must admit that, during my 30-year association with the collision repair industry, this has perhaps been the most challenging time for the business. Prior to the pandemic, the industry was poised for high growth and stability. Over the past two years, the restrictions have had a disruptive and fundamental impact on the industry, leading many independent body shops to close or sell their businesses.

There were many important lessons we took away from this disruption. We learned to be more agile, to re-focus our business priorities and to explore effective ways to insulate our franchisees from the economic uncertainty. It also led us to be more prepared and resilient if there were similar disruptions in the future.

As we emerge from one challenging situation, the collision repair industry finds itself caught in many other difficult issues—ranging from supply chain issues to non-availability of auto parts, to fuel price hikes, and to changing consumer habits.

Emerging trends

The automotive industry has never stopped innovating during the time of the pandemic. Vehicles and repair processes have continued to become increasingly complex. Overall, we have witnessed transformational change in collision repair, glass repair and replacement and mechanical services.

As collision centres brace themselves for the return to normal traffic on the roads, where do we go from here? For one, consolidation is and will continue to be one of the megatrends in our industr y, both nationally and globally, driven in large part by advances in automotive technology and the training investment required by collision repair centres to stay at the top of their game.

I am confident that many of you in the business will agree that this has also been a critical time for the aftermarket industry, which continues to grapple with challenges such as skills shortage, non-availability of parts and recent international developments. As we navigate the complex aftermarket territory, there have been many national and global factors that threaten impact the long-term viability of the industry.

Supply chain delays

On top of the heap of challenges is the ongoing supply chain issue in the North American market. Although the aftermarket industry remained resilient over the past two years, the supply chain crisis affected the supply and demand for aftermarket products and services, resulting in repairs of customers’ vehicles being delayed. The non-availability of parts or delays in procuring them have significantly impacted repair time and led many shops about the viability of their businesses.

It is a vicious circle—delayed parts procurement leads to delayed repair times leading to shops extending the time on the courtesy and rental vehicles, the costs of which are borne by the shops. At Fix Network, we are discussing with our shops and insurance partners to explore solutions that will offset the impact of delayed repair times on the shops.

Call for collaboration

The economic uncertainty has led many shop owners to be concerned about business and critical factors such as cashflow issues, receivables, constant pressure on cost-cutting, and overall supply chain cost increases—and rightly so. As a leader guarding its franchisees, we are actively engaging our network, our franchisees and insurance providers to address these challenges. Together, we need to find common ground that ensures the survival and profitability of all our partners, without impacting our customers.

Hybrid and electric vehicles

The impact of the Russia-Ukraine conflict has been felt across the country. Gas and diesel prices have jumped significantly in part due to the conflict, leading motorists across the world to either keep away from the road, switch to public transport, or invest in efficient electric vehicles. These are therefore good times for hybrid and electric vehicles.

Trends indicate that vehicles running on electricity and alternative fuels will soon dominate the road. While repairing and servicing hybrid and electric vehicles has always been a part of the learning process at Fix Network’s training centres, we are witnessing a four-fold increase in demand from our franchisees for equipping their technicians with the right skills to fix electric vehicles.

It is unlikely that the industry will ever be normal soon. The key is to remain resilient in the coming weeks, and perhaps, months. Hang in there, friends.

“As we emerge from one challenging situation, the collision repair industry finds itself caught in many other difficult issues— ranging from supply chain issues to non-availability of auto parts, to fuel price hikes, and to changing consumer habits.”

— Sylvain Seguin

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