Last week we spoke about 3 predictions for 2016. My first prediction was that technology will play an increasing role in the industry. Vehicle manufacturing now resembles high tech aerospace manufacturing with the extensive use of carbon fiber, aluminum, and other advanced materials. OEMs will take a more active role in creating repair methodology and enforcing repair standards. But is vehicle complexity killing the industry?
I admit, suggesting complexity is “killing the industry” is a bit of an overstatement. But I certainly believe that increasing technological complexity fundamentally changes the industry. And, depending on your inclination and your time horizon, it can either be seen as a huge opportunity or a huge threat. Regardless of your opinion, the financial implications are significant (I hear both pros and cons frequently. Subscribers: Email me – I want to hear what you think).
Industry Complexity
The collision industry is complex, for a host of uncontrollable reasons and a number of self-created ones. Adding to the standard complexity of the industry, increasing technological complexity is creating a shift in the way vehicles are repaired. Advanced materials require new tooling, new equipment, new training, updated or retrofitted facilities. You likely already know that the starting investment in tooling and facility upgrades to become Ford aluminum approved is start at $50,000. More advanced programs are much more expensive and have substantial ongoing expenses associated with them.
