There are always some unexpected news headlines in the industry over the course of a year. But a review of what happened in 2017, along with discussions with industry leaders and analysts, can offer a reasonable assessment of some of what likely will occur within the industry in the coming 12 months. Here are 18 things to watch for in 2018.
1. Automakers may keep a closer tab on certified body shops. Some automaker shop certification programs require little more than meeting a checklist of equipment and training. Others include some annual or biennial audits. But General Motors may raise the bar this year with the program it has said it will introduce that is expected to have some ongoing metrics for shops, not unlike many direct repair programs.
“Our new program is being designed to measure critical behaviors and procedures that will help ensure every collision repair is done to the highest standards,” GM’s John Eck said this past summer.
2. Cycle time may not improve. If your shop’s cycle time is not as good as it once was, that may not entirely be your fault. An analysis this past year by CCC Information Services offered some evidence that rising cycle times are based more on increasing vehicle and repair complexity. CCC found that the time a vehicle spends in a shop before repairs begin and after reapirs are completed before the customer picks it up, hasn’t changed over the past three years.
But the rise in “keys-to-keys” cycle time – which averaged 9.85 days in a recent 12-month period compared to 9.26 days two years ago – appears to be accounted for by a similar rise in the time between when repairs begin and are completed. Repairs took an average of 7.9 days after commencing in the most recent 12-month period, compared to 7.2 days two years ago.
That increase, CCC concluded, could be based on repairs involving slightly more labor time (25.6 hours on average now compared to 24.9 two years ago) and more parts (12.2 parts now compared to 11.3 two years ago).
3. Legal battles between shops and insurers will continue. A federal appeals court breathed new life this past fall into several of the nearly two dozen antitrust lawsuits against insurers brought by shops in various states. Many of the suits had been dismissed by the U.S. District Court judge in Florida overseeing them, but a three-judge panel voted 2-1 to overrule that decision and rule that some of the cases – which began about four years ago – can move forward.
4. Use of CCC Information Services’ “Secure Share” will become mandatory for CCC users. Starting in April, shops using CCC’s estimating system will be able to transmit estimate information to third parties (other than insurance companies) only through CCC’s new Secure Share data-exchange system.
The change is significant because shops will no longer be able to share estimate data with just any vendors. Those vendors must be approved by CCC for Secure Share, will have had to have built a new interface to accept the data in a new format, and must pay CCC a 50-cent per estimate fee to receive the data. Whether or how that new expense will be passed on to shops and then on to insurers is unclear.
5. Consolidation of the industry will continue. Many industry observers a year ago predicted that one of the Big 4 multi-shop operations (MSOs) would merge or acquire one of the others during 2017. That didn’t happen (at least as far as press time), but some still foresee it happening this year. Regardless, consolidation of the industry is expected to continue. Several sources say, for example, they foresee more MSOs entering into some of the Northeast states that have to-date seen less consolidation activity than other parts of the country. There are now more than two dozen MSOs with 10 or more U.S. locations, accounting for as much of nearly 16 percent of the shop count in some states.