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3 collision industry predictions for 2016

Tuesday, January 5, 2016 - 09:00
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I’ve had a number of conversations recently with business owners around the question of “Is now a good time to sell my business?” That is a very personal question. There is no generic answer. But I’ve found myself discussing the same risk factors time and time again that I think owners should take into account when making that decision. There are 3 main areas I see that will continue to impact the industry: technology, consolidation, and monetary policy, i.e. the Fed.  Here are 3 collision industry predictions for 2016.

Technology

The way cars are designed will continue to change. Which means the way cars are fixed will continue to change as well. In the early 2000s when I was in the operations side of the industry there was much less in the way of complexity. Understanding the unique repair requirements of high strength steel was generally the most complex repair decision that had to be made.

But fast forward 15 years and the industry is abuzz with discussions over advanced repair materials, from aluminum to carbon fiber. Vehicle manufacturing now more closely resembles aerospace manufacturing. And for good reason – OEMs are taking lessons learned in aerospace to reduce weight to increase fuel economy and applying them to automotive manufacturing.

As vehicles evolve in complexity, the tooling and training required to repair vehicles will increase. OEMs will continue to take a more active role in creating repair methodology and enforcing standards. This will result in increased investments that repair businesses have to make in tools and equipment, training and certifications, and facility upgrades. It will be more costly to operate a professional facility going forward.

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