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VOL. 2 ISSUE 11 JANUARY 2012
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Industry News You Might Have Missed in 2011 by John Yoswick
So much happens in the collision repair industry that it can be hard to keep up on everything. A few big stories get plenty of attention, but sometimes it’s the lesser-known stories that can have as big an impact on your business. As a new year kicks off, here’s a wrap up of some of the news stories from this past year that might have flown under your radar amid the dayto-day challenges of running your shop, but that could prove helpful for you to know about. ► 1 The Federal Trade Commission
last year issued a consumer bulletin related to the Magnuson-Moss Warranty Act. It states that use of non-OEM parts in itself cannot void a vehicle warranty. “Still, if it turns out that the aftermarket part was itself defective or wasn’t installed correctly, and it causes damage to another part that is covered under the warranty, the manufacturer or dealer has the right to deny coverage for that part and charge you for any repairs,” the bulletin states. For a copy of the bulletin, visit: http://tinyurl.com/3zvas3w
► 2 The Society of Collision Repair See Might Have Missed, Page 18
Southeastern Collision Industry’s 2011 Redux
See Industry Wrap-Up, Page 10
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The collision industry has certainly seen its fair share of challenges this year. As everyone in this industry considers the promises and hope a new year can bring, we asked some of you in Autobody News’ Southeast region to take a hard look at some of the issues they saw in 2011, and especially those they’d like to see less of in 2012. Barrett Smith, Owner Auto Damage Experts in Dover, FL, and active Florida Auto Collision Alliance member, gave his opinion on the collision industry during the last year. “Concerns with Direct Repair
Programs (DRP) continue to plague the industry,” said Smith. Among the insurer-body shop relations Smith cited were the continual efforts of the Collision Repair Industry to meet the ever-changing goals (KPIs, mandates, restrictions, levels, etc.) that insurers place upon both DRP participants and non-participants; the compelling constraints of such KPIs as “Prevailing Competitive Pricing/Practice (PCP) upon repairers and consumers; and the lack of accountability of repairers and insurers for less than adequate repair allowances and resulting repair quality. “It is my opinion that the insur-
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2011 RECAP
Delray Beach, FL, Shop Owner Opposes GEICO’s 10% Charge on Domestic OEM Parts Eddie Quintela wants to know why GEICO is charging his customers a 10% deductible on their domestic OEM parts, regardless of fault, and in addition to regular deductible and/or applicable betterments. Quintela asks why GEICO is apparently assessing this fee in Palm Beach county but not in nearby Polk county; and why is it that an insured driving a foreign made vehicle is not deducted 10% for OEM parts, but one driving a vehicle made in the United States is made to pay 10% extra for their parts? Quintela sent his first email to GEICO’s Dan Maloney, his local claims supervisor, on Dec. 7: Dan, I called you twice and left two voice messages and haven’t heard back from you yet. I am writing in regards to the 10% parts discount that you have taken from the estimate on
Eddie Quintela has sent multiple email letters to GEICO’s local claims supervisor seeking refunds (or at least an explanation) for his customers who are being charged an additional 10% on all domestic OEM parts appearing on estimates. So far he’s had perfuctory response from the insurer, and no substantiation of the “customary” charge. Quintela has offered to help GEICO do its survey of the market since none of the shops he contacted have seen a GEICO sponsored survey. He asks GEICO why they are compromising “relationships between your company and the hundreds of collision repair facilities here in South Florida?” See Domestic Parts Deduction, Page 16
Where We Stand—The U.S. Automotive Sector by Scott Corwin, Evan Hirth, Jan Miecznikowski, Brian Collie, Patrick Mulcahy, and Mike Beck, at Booz & Company
For U.S. automakers and suppliers, the past year can best be described as 12 months of mixed results, leaving unanswered questions about the future direction of the industry and what is required for manufacturers and suppliers to thrive. In 2011, U.S. light car and truck sales will exceed 12.5 million, a nice bump from 11.6 million in 2010 and 10.4 million in 2009. And though the most optimistic analysts forecast that U.S. vehicle sales will rise to more than 14 million in 2012, that’s a far cry from 17.3 million at the turn of the
millennium. Last year’s U.S. sales figures might have been higher if not for the tsunami and earthquake in Japan and flooding in Thailand, which forced Toyota, Honda, and, to a lesser extent, Nissan to curtail production in virtually all of their assembly plants around the world. Auto sales growth is far more rapid in emerging nations such as China and India, with average annual sales gains since 2001 of 23 percent and 15 percent respectively. All of this should be good news for U.S. automakers, which have restructured their operations to be profitable at lower volumes in the U.S. General Motors, Ford, and Chrysler gained market share at the expense of the Japanese manufacturers, and the See Where we stand, Page 14
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