Supply Chain Issues and Repair Complexity Major Concerns in 2022 by Ed Attanasio
Before the pandemic hit, people in the collision repair industry were most concerned about a lack of qualified employees and the growing complexity of OE repairs. Those problems still exist, but now the crippled supply chain has been added to the equation. It’s a whole new world and scary in many ways, so how will auto body shops be able to navigate through these uncertain and troubled times? Solid, carefully researched and highly relevant data can surely help everyone in this industry. Director/ Industry Analyst Susanna Gotsch from CCC Intelligent Solutions, Inc., is well-known for being the author of the company’s annual Crash Course since 1995, where she interprets the numbers and forecasts what is going to happen next. Gotsch’s historical perspective supported by data is invaluable for anyone who works in the automotive industry. Gotsch set the table for this year’s report before diving into the numbers. “It’s hard to fathom that we are nearly two full years into the pandemic, but one thing we know for sure: The natural pre-pandemic order of things has been altered, leaving us searching for a new normal or rhythm to how we live, communicate and conduct business,” she wrote. Obstacles created by supply chain issues are a concern to every body shop in the world right now. “Despite new variants and ongoing debates on how best to balance public health and economic well-being, the U.S. economy has roared back, with consumer buying things like cars, homes, furniture, electronics and other goods,” she said. “As a result of the increased demand, supply chains have been pushed to their brink, either from shortage of goods or people to deliver them. “Whether it’s the auto industry’s shortage of semiconductor chips or metals critical to development of electric vehicles, or the medical industry realizing many of the most critical drugs and supplies are only manufactured overseas, all industries are hav-
ing to re-examine and restructure their supply chains.” The supply versus demand imbalance has also impacted U.S. inflation in a huge way, which hit a 40year high in December 2021, Gotsch said. “Labor shortages have also driven up wages across nearly all industries, with Conference Board
pandemic, the Crash Course said. While repairers are seeing an increased number of non-driveable DRP repairs relative to the preceding two years, both driveable and non-driveable repairs are taking longer, and repairer productivity is lower. “Unfortunately, as repair costs climb, repairer productivity can sometimes suffer, customer satisfaction can fall and the likelihood that the customer needs to bring their vehicle back for additional work after repairs completed also increases,” Gotsch explained. “And it’s not just repair time that is taking longer. The time to get Director/Industry Analyst Susanna Gotsch from CCC an appraisal has increased Intelligent Solutions forecasts that supply chain problems, for traditional channels inflation and repair complexity will continue to be major where the customer either obstacles for collision repairers in 2022 is visited by an insurance data pointing to higher wages in staff appraiser or brings their vehicle 2022,” she said. “The disruption in for a DRP appraisal.” Ultimately, the key to combat experienced over the last two years has accelerated the pace of innova- higher costs is to improve production across all industries, leading to tivity, Gotsch outlined. the transformation of how business is conducted as technologies such as artificial intelligence (AI), telematics, mobile and cloud are being adopted to help inform and speed processes, and combat challenges stemming from labor shortages, new consumer expectations and other market dynamics.” The automotive repair industry is still struggling to find employees, Gotsch reported. “Representatives from Universal Technical Institute predict a wave of retiring baby boomers will create 100,000 auto technician job openings over the next decade or so, 1701 Saint Michael’s Drive with the Bureau of Labor Statistics Santa Fe, NM 87505 projecting a 4% decline in employment in the overall auto technician 505-982-1957 field through 2029,” she said. “Finding technicians with the right skillM-F 7:30am – 5:00pm sets is also a growing challenge as vehicle complexity increases.” Sat 8:00am – 12:00pm Most collision repairers indicate the technician shortage has n Wide Delivery Area been the primary reason for longer n Competitive Pricing backlogs of work. Repair work is up as auto accident frequency has risen. Many shops have indicated they cannot repair as many vehicles at the same time as they did before the
30 MAY 2022 AUTOBODY NEWS / autobodynews.com
“Unfortunately, new vehicle technology such as ADAS and EVs have added increased complexity and requirements for new skillsets, training and tools for the collision repair industry,” she said. “So, while the industry has demonstrated its resilience and ability to adapt to new vehicle technology over the years, adapting takes time, and today’s environment means these repairs may cost more.” A sharp increase in motor vehicle fatalities occurred in 2020 and 2021 in the U.S., highlighting the need for new directives to improve vehicle safety. An estimated 20,160 people died in motor vehicle traffic crashes in the first six months of 2021, according to the NHTSA—an increase of 18.4% from the first six months of 2020, and the highest number of fatalities during the first half in 15 years, based on this year’s Crash Course. The fatality rate per 100 million vehicle miles traveled increased to 1.34 for the first six months of 2021,
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