Many of us who have been with the industry for a while can recall times when we’ve experienced significant technology changes, which have lead many to predict a shake up, including losing shops and technicians who were unwilling or unable to accept new repair methods.
A good example is when General Motors changed most of their models to a uni-body construction platform in the late 70s and early 80s. To listen to some, you would think it would be next to impossible for us to adapt. It required new equipment and training. It had a lot to do with the creation of I-CAR. During those days, it was often stated that we have roughly 80,000 shops in our country.
Another similar example was the transition to basecoat/clearcoat paint finishes. We saw an increase in emissions equipment and computerized vehicle management systems. In the late 90s, we saw the introduction of significant shop consolidation. Then we were told of a large influx of aluminum use in vehicles that would dramatically change how we repair cars. That didn’t happen to the extent predicted, as the steel industry reacted with new versions of high strength steels.
With each change, and with each economic downturn, there were predictions of declines in the numbers of shops. We heard that it was happening in the UK and their declining numbers were staggering.
While the number of shops has certainly declined, down to about 32,000-39,000, depending upon who you are listening to, we have not felt the effects of these dire predictions. With the increased prevalence of MSOs, it is often confusing when shop numbers are provided — is this statistic for the number of rooftops or businesses?
Those that have failed seemed to have done so for other reasons, and are often sold to others, especially to MSOs and consolidators. An example would be CARA, who, in the early 2000s, was reported to be the fastest growing consolidator. It would appear that their overextending growth, financial resources, choice of locations and overall business plan had more to do with their demise, rather than changing technologies.
Today, we find ourselves hearing of the aluminum 2015 Ford F-150 and its industry-changing repair requirements. Manufacturers are embracing aluminum and other non-traditional substrates like magnesium and carbon fiber more than ever before. We are seeing computerized vehicle management and communication systems that make the some systems in futuristic science fiction films look outdated. Vehicle repair methodology and requirements are changing faster than ever before, and the consequences of inadequate repair are increasing dramatically.
I just heard from an MSO friend whose shop had not adequately addressed a sensor in the front of a vehicle. As a result, the sensor later misread an oncoming object and applied the brakes, even though there was no object in front of the car. Fortunately, the vehicle returned without harm and the problem was corrected. The consequences could have been devastating for the driver, vehicle and the MSO’s business.
Since the worst case scenarios predicted in the past did not come to fruition, we are somewhat hardened and complacent. I have even heard of a number of Ford dealership body shops that do not intend to invest the presumably $50,000 in equipment to repair the aluminum F-150s. We know that many shops choose to not maintain recommended levels of I-CAR training. Have we finally come to the time when changing technologies will drive a wedge into our industry, causing those who won’t, or can’t, embrace new equipment and training to their business’s demise? If so, what will that demise look like? Will it be the vacant deteriorating shops with ‘for sale’ signs in front we have pictured in our minds? Or will it be more of an evolution where more and more shops are simply sold, primarily to MSOs and consolidators, who can transition the shops to the necessary modernization? And if that is the case, are we in the midst of it now as we see weekly reports of significant acquisition? I think that may be the case.
As often has happened throughout world history, when a predicted event occurs, it may not look as expected.
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