Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
Industry Stocks
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
1999 Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

Articles

INSIGHT Expands International Operation into Canada

Mixed Results in Latest CIC Parts Demo

Sherwin-Williams Announces Improved First Quarter Expectations

Accident Frequency Down; Injury Claims Up

Gene Hamilton New SCRS Chair

CAPA Seminar at Collision Concepts Trade Show

Keystone and Copart Announce National B2B Automobile Initiative

Ford Motor Company Spins Off Visteon

SkillsUSA-VICA Continues to Foster Business and Education Partnerships

Boyd Group Acquires Two Arizona Collision Repair Operations

DuPont to Cut 900 Jobs as Part of Coatings Revamp

INDUSTRY UPDATE

In addition to the Japanese language edition of INSIGHT, which we have had for several years now, INSIGHT Canada will be introduced through a Canadian publishing house. We expect the first Canadian issue to be published early this Fall. Watch for details in upcoming issues of INSIGHT.

We look forward to expanding our relationship with Canada’s Collision Repair Industry.

Moreover, INSIGHT is currently exploring various European opportunities, and hopes to, within the year 2000, launch a European Common Market edition.    o

 back to top

Collision Industry Conference (CIC) participants in Kansas City, Mo., in April again had an opportunity to rate the quality of parts installed on a vehicle, not knowing which were OEM or non-OEM. A non-OEM fender - one that previously had been decertified by CAPA - received significantly lower ratings for fit and overall acceptability than the OEM service part installed on the 1999 Ford Taurus later in the day; 82 percent of those rating the parts said they found the OEM fender acceptable, compared to just 50 percent for the non-OEM fender.

A CAPA-certified hood manufactured by Tong Yang, however, received nearly identical ratings for fit and finish to the OEM hood.

CIC participants gave relatively low marks to the original headlamp installed on the vehicle from the factory, and to the OEM service headlamp installed later in the day; fewer than 42 percent found either acceptable. One shop owner, however, said he believed the OEM replacement lamp may have received lower ratings for fit because of problems with the adjacent non-OEM fender installed at the same time.

The non-OEM headlamp could not be installed and rated; it had been ordered and received correctly according to the packaging, but when the box was opened, the wrong lamp was inside (the box had been opened and resealed prior to delivery).

The CIC Parts and Airbags Committee, which coordinates the parts demonstrations, will be conducting a survey of CIC attendees regarding future demonstrations. The survey will ask whether any non-OEM sheet metal parts should be tested or only those that are CAPA-certified; whether plastic parts such as bumper covers should be included in future demonstrations; and whether adjacent or only non-adjacent parts should be installed and rated.

Also at CIC, the class action lawsuits against insurers and other "turbulence in the parts business" has two CIC committees turning their attention to used or salvage parts.

Bob Matejzel, co-chairman of the CIC Estimating Committee, proposed in Kansas City that his committee work to ensure the estimating systems enable quick and accurate documentation of the added steps necessary to prepare used parts for paint, including removal of trim and lock cylinders, etc.

Meanwhile, the Write It Right Committee has proposed developing “best practice guidelines” for the use of salvage parts, a project similar to the committee’s recent development of guidelines for estimating and claims processing.

"The people who sell used parts barely even know what a collision repairer needs or wants," CIC Chairman Dale Delmege said in asking meeting attendees whether they support the two initiatives. "Collision repairers and insurers barely have any sort of agreement as to when and where to use them or what the standards are. And it appears the information providers are not particularly current with what is happening now with these parts."

CIC participants gave Delmege and the two committees a thumbs-up for moving forward with the project.

    o

 back to top

Due to greater than anticipated sales improvement in the Paint Stores and Consumer Segments during the last part of March, The Sherwin-Williams Company expects first quarter earnings per share to be $.25 versus $.17 in the first quarter 1999. This is an improvement over the expected $.22 to $.24 per share announced on March 23, 2000. The Company will release its first quarter results on April 25.

Sherwin-Williams completed the acquisition of two specialty coatings businesses last week; General Polymers of Cincinnati, Ohio and ScottWarren S.p.A. of Aprilia, Italy. The combined annual sales for the two businesses is less than $50 million U.S. dollars. The amount and terms of the purchases were not disclosed.

General Polymers, a manufacturer and seller of specialized coatings systems for floors, walls and tanks. will operate as a separate business unit within Sherwin-Williams’ Paint Stores Segment.

ScottWarren provides the first European organizational and manufacturing base on which Sherwin-Williams’ Automotive Finishes Segment can build its business by meeting the product and service needs of its European and international customers. Located in Aprilia, Italy, approximately 30 miles south of Rome, ScottWarren manufactures a complete line of automotive and commercial vehicle refinish products which are distributed throughout Italy, numerous European markets, the Middle East and Africa.

Christopher M. Connor, Vice Chairman and Chief Executive Officer of The Sherwin-Williams Company said, "ScottWarren provides an important platform on which we can expand our automotive finishes business on a global basis. Both businesses will be able to utilize Sherwin-Williams’ technology and marketing resources to enhance the products and services they will offer to new and existing customers."

Sherwin-Williams Automotive Finishes Corp. has announced the completion of the acquisition of BP America Inc.’s technical and research center in suburban Cleveland, Ohio. Renovations to the facility will begin immediately, with opening set for in September 2000.

"The merging of our technical development staff and applications group will improve technology cooperation across our OE, fleet, and vehicle refinish groups," said Michael Galasso, President and General Manager of Sherwin-Williams Automotive Finishes Corp.

Sherwin-Williams plans to bring all of its technical, research, and development resources together. Technical development staffs and applications groups from both Chicago, Illinois and Troy, Michigan will relocate to the new facility. Sherwin-Williams will maintain a presence in these locations with its sales, training, and laboratory support sites.

The new Technical and Learning Facility will include an applications center to replicate virtually any refinish environment - from various climates and airflow conditions to robotic applications - allowing the staff to react to any refinish and OEM customer’s request.

In addition, the new learning center will offer all product, color, and management courses available in the Sherwin-Williams training curriculum. It will include classrooms and shop areas containing a variety of state-of-the-art product application spray booths, along with a variety of innovative equipment for hands-on experience.   o

back to top 

According to a recent study by the Insurance Research Council, auto accident claims, measured by property damage claims, have fallen by 17 percent from 1980 to 1998. Auto accidents dropped to 4.09 per 100 insured cars in 1998 from 4.94 in 1980.

In the same period, bodily injury claims resulting from those accidents increased 33 percent, from 0.88 per 100 insured cars in 1980 to 1.17 in 1998. The injury rate has, however, been declining slightly but steadily since its high of 1.22 in 1995. Safer roads, better vehicle safety design, and campaigns against drunk driving have contributed to the improvement.

Accident and injury rates, as well as claims costs, vary from state to state, with Massachusetts at the top in accident rate (7.06 per 100 insured cars) and bodily injury claims (2.29 per 100 insured cars).    o

back to top 

A panel discussion at the National Leadership Conference, an annual event sponsored by the Society of Collision Repair Specialists (SCRS) and held this year in Kansas City, Mo., included members of the Taiwanese Auto Body Parts Association and some of the U.S.-based distributors of the non-OEM parts TABPA companies produce.

A number of attendees questioned panelists on the way non-OEM manufacturers choose the "master" part that they will copy (see related story), a step they said that results in ill-fitting parts.

"I couldn’t agree with you more," said Buck Haddock of Eagle Automotive, a Denver-based parts distribution company. "We’re working toward a system that is much more scientific than that."

He said that CAPA now gives the manufacturers the option of allowing CAPA to choose the master part based on actual test fitting of parts on a vehicle. This step, Haddock said, should increase the likelihood that the non-OEM parts based on that master will pass the vehicle test fit required by CAPA for certification.

"Tooling is very expensive, so we are very serious about making sure we get correct samples," said Parkson Jong of Auto Parts Industrial, a Taiwan-based manufacturer of non-OEM parts. "Tooling for one fender or one hood is over $200,000."

But Haddock also challenged those who said they have found little or no inconsistency in OEM parts or that 50 percent of non-OEM parts are not usable.

"Our total return rate for any reason you can think of is 10 percent," Haddock said. "Less than 1.5 percent of our total sales are returned for fit problems. If you pay attention to the CIC test fits, you guys are having a hard time as a group telling the difference between an OEM service part and an aftermarket part. The data right now that I see does not support the prevalent perception that aftermarket parts are crap and don’t fit."

Also at the event, newly-elected SCRS chairman Gene Hamilton, owner of Sports and Imports in Atlanta, Ga., spoke of the tremendous change the industry has seen in the past 10 years and warned that the rate of change is only likely to increase. He said that SCRS would face changes of its own, with its long-time executive director John Loftus retiring this December. He said the candidate search for Loftus’ replacement would continue until June 1.

"We are very happy with the interest shown by several qualified candidates so far, and feel our new executive director will carry SCRS to new levels needed for the future," Hamilton said.

He outlined a number of goals for his term, including continued resolution of the non-OEM parts issue.

"The aftermarket parts manufacturers are here today because they have heard our message that we want quality parts that fit every time, and better terms and service,” Hamilton said. "SCRS has in a short time and with no financial investment accomplished more to improve the outlook of [non-OEM] parts manufacturing than CAPA has with tens of millions of dollars. We bring a strong voice of reason to people who now wish to listen and change."

The Society of Collision Repair Specialists has announced plans to team with CarStation.com, to Web-enable all of its direct members and 36 affiliate associations. CarStation will offer e-commerce tools and a system for the SCRS and its membership to communicate and share information.

CarStation Vice President of e-Business Solutions Frank Terlep said, "The entire automotive service industry is tapping the Internet, and businesses that are not online risk being left behind."    o

back to top 

The Collision Concepts trade show in Kansas City, Mo., in April, the second annual trade show sponsored by the Society of Collision Repair Specialists, seemed to attract enough attendees to satisfy most exhibitors, although, like last year, it was never crowded.

During one of the two dozen free seminars offered at the event, the Certified Automotive Parts Association (CAPA) announced that only about one in four non-OEM parts submitted for certification in the past year initially passed the vehicle test fit now required. Jack Gillis, executive director of CAPA, said that since his organization began requiring a vehicle test fit in April of last year, more than 170 non-OEM parts have been installed on undamaged vehicles in a testing facility in Grand Rapids, Michigan.

"Approximately 75 percent of the parts that go through the entire first part of the [certification] process do not get immediately approved," Gillis said.

Forty-four of the parts (26 percent) passed the vehicle test fit and other certification requirements the first time, Gillis said. About 14 percent failed outright. The majority were issued “corrective action requests,” notices to the manufacturer of changes necessary in order for the part to be CAPA-certified.

"Those corrective action requests are for what we would consider relatively minor problems, yet problems not acceptable to the collision repairers,” Gillis said. “So the manufacturer has to go back and take whatever corrective action is necessary and put the part back through the vehicle test fit process."

"The good news is that a lot of those that come back do pass," said Karen Vail of Entela, Inc., the Michigan-based lab that conducts the testing for CAPA.

Manufacturers use one of two ways to select the OEM part that will serve as the “master” to be copied. In the past, manufacturers have purchased and easured five OEM service parts, selecting the one that most closely matched te average measurements of the five. More recently, CAPA has offere to select the master part for the manufacturer based on an actual test fit on a vehicle of three OEM service parts. Only one non-OEM parts manufacturer, Jui Li, has used the thisoptional service, but Gillis said he believes that once more manufacturers do, more parts will pass the test fit required for certification.

"One of the things that collision repairers tell us is that whenever they get an OEM part, they generally don’t have a problem with it," Gillis said. "We’ve accepted that at face value. What we’ve discovered is that OEM [parts] are very inconsistent. I understand that for most of you that is not your experience. But when we look at the OEMs with the type of microscope we do, we do find they are inconsistent and that the manufacturers do a great job of copying a bad part. So if they go back and do a better job of selecting an OEM master, one that actually fits on a car, we think they will be far better off and the percentage that are being rejected now could be dramatically reduced."    o

back to top

Keystone Automotive Industries, Inc. and Copart, Inc. have announced that they have signed an exclusive marketing agreement between the companies.

Under the terms of the agreement, Keystone will make available its aftermarket collision parts for sale by Copart through its Copart.com Web site. The co-branded site will identify the vehicles that a buyer intends to or has purchased from Copart and will then show all parts available from Keystone for that vehicle.

The fully integrated Internet system will facilitate the ordering, payment and delivery of parts for the 100,000+ buyers that attend Copart’s auctions annually in person and over the Web. A buyer at Copart.com will not only be able to look at vehicles on-line to inspect damage and enter bids, but also they will be able to use the “order parts” button to buy parts from Keystone.

Copart auctions over $500 million in vehicles annually that are ultimately repaired. This new service will help the buyers of these vehicles to quickly find competitively priced Keystone parts needed to complete the repair process.

Charles J. Hogarty, Keystone’s President and Chief Executive Officer, said, "We are very excited to announce this agreement with Copart. This is a complementary extension of both of our business models which will enable both companies to leverage their existing operations. It also gives Keystone much better access to a large customer base outside the traditional insurance driven market. We expect to have the system in operation by August 2000 or as soon as the required programming is completed."

Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 118 distribution facilities, of which 22 serve as regional hubs. Its product lines consist of automotive body parts, bumpers, auto glass and remanufactured alloy wheels, as well as paint and other materials used in repairing a damaged vehicle. These products comprise more than 22,000 stock keeping units that are sold to more than 25,000 repair shops throughout the nation.

Founded in 1982, Copart provides vehicle suppliers - primarily insurance companies - with a full menu of services to process and sell salvage vehicles through auctions, principally to licensed dismantlers, rebuilders and used vehicle dealers. Operating 72 facilities in 35 states, Copart also provides services to other geographic areas through its national network of independent salvage vehicle suppliers. o

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?