and Materials

CIC Panel Looks at How Auto Body Shops Can Respond to Rising Costs of Paint and Materials

A panel discussion at this summer’s Collision Industry Conference (CIC) related to the impacts of inflation focused primarily on how body shops can address increases in the costs of paint and materials—including how to discuss rising costs with insurers.

No matter which of the major refinish paint lines is being used within a shop, virtually all collision repair businesses have received at least one letter—and generally multiple—in the past 18 months announcing price increases for those materials.

One paint company, for example, notified its U.S. shop customers in January 2021 of a “weighted average increase of 4.1%,” followed by a similar “weighted average increase of 4.25%” in May 2021, and another of 9.8% in February of this year.

Panelists at CIC noted some shops may be confused by the term “weighted average,” particularly if they see their paint costs rising above the percentages noted in the letters.

Paint company representatives said those average increases are an aggregate average across all the various products that manufacturers may include in the notice.

“So some products may be raised more, some will be raised less,” said Braxton Ewing of BASF. “A lot of that is dependent on supply chain issues and raw material availability.”

Tim Ronak, senior services consultant for AkzoNobel, concurred.

“An individual shop may not buy that entire weighted range of products in the same distribution that we’ve averaged it,” Ronak said, noting most companies offer a variety of clear coats, for example, that might increase in price at different rates. “What that means is that each shop may see its own unique price increase, irrespective of what’s published.

“A 10% published number might be, for an individual shop, a 12% increase in actual expenses, whereas another might see an 8% increase,” Ronak said.

Shop Showcase Track and Document Costs Panelists noted one way a shop can with Ed Attanasio better document its costs is through the use of a paint materials calculator or billing system other than the traditional “paint labor hours times a given rate.” A “Who Pays Social Media for Shops for What?” survey in January found although the percentage of shops with Ed Attanasio using that method has been falling, about half still do. Committee co-chairman Aaron Schulenburg pointed to an article on the CCC Intelligent Solutions SEMA Show Goes On website stating although most of its customers use the “rate times hours” with Ed Attanasio method for calculating materials charges, “this is also usually inaccuBraxton Ewing of BASF said using a refinish materials calculator will help a shop better rate.” Media and Publicity for Shops account for its paint shop costs Ronak said most shops in the 20 Groups he oversees have moved away from using a “rate times paint with Ed Attanasio labor hours” billing method for materials.

Shop StrategiesYour Trusted Source for All Your Genuine GM Collision Parts

with Stacey Phillips

Body Shops Giving Back

with Stacey Phillips

833-691-1440

Direct: 210-341-2217 24 Hr. Fax: 210-308-8683 Hours: Mon-Fri 8am - 6pm Sat 7am-4pm

Tips for Busy Body Shops

with Stacey Phillips

My SEMA

with Stacey Phillips

• Extensive 3 Million+ Inventory of OEM GM Parts • Fleet of 13 Delivery Vehicles Covering the Greater San Antonio Area and South Texas • Certified GM Wholesale Parts Specialists Dedicated Exclusively to WS Clients with 150+years combined experience • We offer Progressive Competitive Pricing and Discounts

Shop Strategies9400 San Pedro Ave. l San Antonio, TX 78216-4497 www.mynschevy.com emartin@mynschevy.com with Victoria Antonelli