Car Body Technology – now too complex to repair?

2008_Audi_A5-S5_Body_Structure_Extrication

 

As the technology in automotive construction becomes more and more sophisticated, we hear more customer concerns about repairability.  Customers are aware that their new car “isn’t just made of ordinary steel” and worry that a car accident repair may compromise the car’s warranty.  We’re also asked why cars are now built in such a complicated manner.  The image shows a 2008 Audi A5 and the six different structural component materials. Some newer models are even more complicated, and every new car now comes with model-specific accident repair specifications, right down to the number and placement of spot-welds.

 

Safety and fuel efficiency have been the driving factors for alternative construction materials.  Manufacturers now use combinations of mild steel (the “ordinary steel” predominantly used in most cars in the past), high-tensile steels, magnesium alloys, aluminium in a range of forms, carbon fibre and structural plastics.  All these materials in various combinations result in a much stronger car body designed to withstand greater impact in a crash and protect passengers from injury.  They’re also lighter, so cars can go faster (except in Auckland traffic!) and use less fuel (good for the pocket and for the environment).

 

In ‘the good old days’, damaged cars were pieced back together with a tape measure and oxy/acetylene gas welders, but no longer.  Mig welding replaced gas over 20yrs ago, recently inverter spot welders took charge, but manufacturers are already heading in a different direction and some cars are now glued together.  Riveting/bonding of incompatible materials is now becoming common.

 

All this requires highly sophisticated crash repair methodologies and equipment, and advanced technician training.  Due to the escalating cost involved, the collision repair industry in NZ is struggling to keep up financially and the fundamental problem lies with the relationship between insurers and repairers.  We have very close relationships with both industries and have the greatest respect for both, but we hear the problems on a daily basis. Insurers believe the panelbeating sector is inefficient, and collision repairers feel unfairly constrained by the payment levels insurers will allow.  Both may be valid, but we do wonder how costs are to be covered and a ROI achieved when smash repair rates are set by insurers at around $50 – $60/hr.  Have they tried engaging a mechanic, plumber, electrician, or even a builder for $50 an hour?  We suspect the tap will still be dripping as we go to press.  We welcome all views on the matter – where do you think the panelbeating sector is heading in the next 5yrs?  Is the industry sustainable?

7 Responses

  1. I Berich
    | Reply

    A tradesman for $50 an hour, that’s a laugh. At that rate the only way crashed cars will get fixed in the future is like in the horror movie CHRISTINE. Check how the evil spirits do it!

  2. TopBroker
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    It seams to me the insurance industry is being unfairly maligned in this case, if panelbeaters accept a rate that is lower than they’d wish, they have only themselves to blame – turn the business away surely? Insurance brokers would not accept business with underwriters at less than the standard 20% commission, it would be the thin edge of the wedge and unsustainable. Is it a simple question of supply and demand, are there too many panelbeating shops in NZ?

    • BruceB
      | Reply

      Sorry but this is so naive. Insurance is almost a monopoly market, NZI already had 60% of car insurance and has now bought AMI. They dictate rates to the panel industry so its not a normal market because the seller has no influence, it’s a David & Golliath situation. See the latest PanelTalk for a good understanding of what we’re dealing with.

  3. JohnnyB
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    I agree with the last comment as would anyone involved in the panelbeating industry. Insurers have total control in NZ and we’re getting shafted. It’s even worse in Australia (the home of all big insurance companies operating in NZ) and it’ll get worse because there’s no-one to stop it. You start some good conversations Crash Management but your opinions are quite ‘tame’ – who are you afraid of? Oh yeah, insurance companies. Check out the Aussie Crash Repair blog for a reality check – http://www.thecrashrepairblog.com.au/2013/04/abuse-of-market-power.html. Good stuff.

  4. Robert Jones
    | Reply

    This is correct, its becoming more and more difficult to stay in business in the panelbeating trade. We’re working harder, longer and smarter and the insurers are paying less and less every year. It’s difficult to push back at the risk of being driven out of business all together. It is worse in Australia, in some cases they’re accepting insurance directives to do a job at an ‘averaged payment rate’ that is completely meaningless and has no bearing on the scale of the actual repair. But at least the Aussie’s are starting to talk about it. Here’s the latest advice from The Crash Repair blog (copy & pasted) –

    Thursday, 5 December 2013

    What are you worth?

    With a new year just around the corner, people the world over are getting ready to celebrate the festive season. Soon we’ll mark the passing of 2013 and welcome the New Year with all the potential it has to offer. Some people will “turn over a new leaf”. Other people will “get on top of things this year” and “be determined to do things differently”. However, most will have great intentions to make some sort of change, but know deep down that it will never actually eventuate.

    The collision repair supply chain is no different. Some repairers will roll into 2014 and build stronger, healthier businesses. Others will have a go at doing things a little different than last year. But most will have nothing but good intentions.

    “A New Year’s resolution is a promise that you make to yourself to start doing something good or stop doing something bad on the first day of the year.” Wikipedia

    What will your New Year’s resolution be?

    Perhaps you could decide to work harder this year? Or, you could aim to spend more time in the office for less profit? If you were really ambitious, you could decide to hire undesirable technicians, pay them too much and then let them dictate how you run your business…..?

    Perhaps instead, you could decide to understand what you are worth?

    Many repairers fail to understand what they are worth. Because repairers don’t know how to value what they do, no one else really values what they do either. Because repairers don’t put a value on what they do, they often bring little value to the business.

    Consider the average panel shop: The owner works a 60 – 80 hour week. Comes in early and is the last to leave. Comes in on weekends and has his mobile on 24/7. Technology has even allowed him to start taking work home where he can “do the accounts and invoices in peace”.

    If you advertised a job that had these same requirements how many applicants would you get? How much would you have to pay to get someone to work for you 80 hours a week, plus time at home, plus weekends, plus be on-call 24/7?

    Now consider what you pay yourself. Not what you draw from the business in profits, but what you pay yourself. Your business is an investment and you are entitled to earn an income from it. But going to work is a job; you should be paid for that too.

    Consider this: if you had a 1 million dollar investment in shares you would expect to have a return on your investment. While owning those shares, that investment; you also go to work for a boss. And working for a boss you would expect to be paid a wage.

    So, what are you worth? As the CEO, Managing Director, Estimator, Courier, Receptionist, Complaints manager, Quality inspector, Negotiator, operations manager, counselor, recruiter, adviser and all-round great guy; what is 1 hour of your time worth? If you know what you are worth, you will then know how to value what you do.

    Could your 2014 New Year’s resolution be to decide what you are worth?

    When you know how to value what you do, perhaps you might spend 2014 doing more valuable tasks. If you decide you are worth $150 per hour, nipping down the road to pick up a replacement tinter the painters need makes you an expensive courier. If you decide you are worth $100 per hour, then you become an expensive receptionist if you answer phones all day long. If you decide you are worth $50 per hour, then perhaps you are not doing a very good job after all!

    2014 could be the year you decide to put a price tag on yourself. If people don’t want to pay you what you are worth, then perhaps you might realise that they don’t truly value what you do.

    2014 could be the year to focus your attention on the high value jobs: marketing, business development, lead generation, and all the other important jobs you should have been doing for the last decade instead of putting out fires and micro-managing your production floor.

    Is 2014 the year of change for you, or is it going to be just another year of pain?
    at 05:55
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    5 comments:

    Anonymous5 December 2013 15:28
    i judge my worth to the business to be in the order of $300 per hour. I have made the concious decision to only do things that are worth this amount. I don’t sweep up, I don’t drop customers home, I don’t write quotes. By not doing these things I can focus on more important jobs like managing my managers, Monitoring my budgets and planning for next month and next year. By paying someone else to do these jobs I used to do has freed me up to do more strategic and planning work. the things a manager or owner should focus on. I used to think that it cost me nothing to do the little jobs and it was worth me doing it to keep a tradesman on a job. I have since learned that was complete rubbish

    Reply

    Anonymous6 December 2013 05:44
    What about the person who prostitutes his wife to the business, at the expense of the insurance companies. Wake up guys you should be doing the screwing not getting bent over and someone else have your ride.

    Reply
    Replies

    the crash blogger6 December 2013 09:17
    there are many cases where the owner or owners of the business are not paid a wage. They often draw small variable amounts of money periodically from the business, but this is usually far short of an actual wage they could earn from a “real” job. Often a wife or other loved one, perhaps a mum or a sister (usually a woman) works in the business a few days a week for free or for a very low wage to “help out”. This is in fact essential work being done on behalf of the insurer to facilitate the claim/vehicle repair process. The insurer is getting this vital work done for free because the business isn’t paying the member and isn’t then including that cost in the shop charge out rates. A shame that we don’t value the women in our businesses as we should and as they deserve.

    Reply

    Anonymous9 December 2013 10:55
    LOOKING AT THE LACK OF COMMENTS FOR THIS BLOG AND THE ONES PAST WRITTEN, ONE WOULD TAKE THAT THE INDUSTRY CAN AND DOES AGREE WITH THE BLOGGER. TOO MANY HANGING ON, SPENDING THE PROFITS MADE IN YEARS GONE BY TO KEEP THE DOORS OPEN. NO PLANNING FOR THE FUTURE, NO FORESIGHT AND NO PROSPECTS. DO YOUR FAMILIES A JUSTICE THIS CHRISTMAS: VACATE THE INDUSTRY AND LEAVE IT TO THE REAL MEN AND THE FUTURE LEADERS TO GAIN SOME INTEGRITY AND SOLIDARITY. YOUR BEST IS WELL BEHIND YOU, IT WILL TAKE SOME YEARS FOR THIS INDUSTRY TO BE REALLY PROFITABLE AND WHILST YOU REMAIN HERE, WE WILL BE TREATED SOFT AND SECOND CLASS BY THE INSURERS. WE NEED THINKERS NOT OLD STINKERS. WELL DONE TO THE BLOGGER, WELL WRITTEN AND SO FACTUAL

    Reply

    Ralph9 December 2013 12:07
    Rather than just get out, shouldn’t we be giving them options? Make shop grading mandatory instead of voluntary. This would sort out those prepared to get with the times and those just hanging on cause they dont know what else to do. Educate repairers so they can understand the fundamentals of business and their shop rates. Then we can all play nice instead of the insurer demanding business-bet-practice and quality but then leveraging us against the cheap guy down the road. The cheap guys don’t need to get out, but they do need to run a legally compliant, safe and sustainable operation

  5. Anthony Jeffers
    | Reply

    very useful & informative article..thanks for sharing this with all

  6. Anthony Jeffers
    | Reply

    these repairing technologies are really complex. thanks for sharing this with all

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