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Letter to the Editor

Exclusively Collision?

Should shops specialize in only collision repair or offer additional products and services in today’s highly competitive marketplace?

A shop owner's recent call prompted a fair amount of discussion among INSIGHT staffers. The Midwest shop owner's primary concern was that too many of the leaders of the industry's associations no longer have businesses that are focused exclusively on collision repair. Couldn't their decisions, this shop owner questioned, be influenced by their interest in their non-collision related aspects of their business? Are shops that do offer only collision repair being adequately represented by such leaders?

Whether those types of concerns are widely held or not, the phone call did trigger discussion about what is seen as the more basic question: Is it possible or advisable in today's market to limit one's business to collision repair exclusively? Or is offering additional products and services becoming critical to the success or even the viability of collision repairers?

We put those very questions to almost two dozen shop owners, all of whom had one thing in common: They currently serve on the board or national collision advisory committee for one or more of the national associations or industry groups. They understood we weren't asking them to speak for those organizations - ASA, AASP, SCRS or CCRE - but just as an individual shop owner.

It's not a scientific, random sampling of the industry, so the results of the "survey" can't be viewed as representative of the industry as a whole. But these leaders tend to be among those who best have their fingers on the pulse of the industry nationwide, so their views may be useful to others in the industry.

Here's what we learned.

What do you offer?

In asking about what services shops provide, we differentiated between those offered as part of collision repair versus those considered stand-alone offerings. Replacing a windshield when a car comes in with a front-end hit doesn't count as "glass service;" offering mobile glass replacement service does. Cleaning up vehicles after repairs isn't the same as offering a detailing service to customers whether or not they need collision repair.

Most of the shops who responded to INSIGHT do offer services other than collision repair.

"We get involved in several non-collision aspects of automotive service/repair: retail mechanical service/repairs, wheels/tires, detailing, PDR, glass and accessories," said Nick Kostakis of Angelo's Auto Body in Irvington, NJ, who is on the national board for the Alliance of Automotive Service Providers (AASP). "We steer clear of offering services that are out of our comfort zone, such as engine/transmission diagnostics and full overhauls, or areas that have been proven to disrupt our production, such as restorations."

Kostakis said such services represent about 15 percent of his company's sales volume.

"But they improve our overall profitability by a greater amount," he said. "The margins on both parts and labor on these services are significantly higher than that on insurance-paid repairs. Also, these diversified services help our bottom line by keeping our staff closer to fully-productive when we experience lulls in collision repair volume. There's also value in being able to handle the majority of automotive service/repair needs without having to resort to subletting. It keeps us current when handling the increasing complexity of collision repairs, and our customer base appreciates our ability to offer 'one-stop shopping' for nearly all of their automotive needs."

Barry Dorn, of Dorn's Body and Paint, in Mechanicsville, Va., and national secretary for the Society of Collision Repair Specialists (SCRS), echoed Kostakis's comments.

"We offer transport and full mechanical services since 1984," Dorn said. "We have found that it has increased our efficiencies in the collision repair division."

Dick Strom of Modern Collision Rebuild in Bainbridge Island, Wash., and treasurer of the Coalition for Collision Repair Excellence (CCRE), said his company also offers a laundry list of non-collision services: glass, wheels/tires, accessories, post-repair inspections, rental cars, pre-purchase inspections and more.

"General mechanical repair amounts to about 40 to 45 percent of our total net," Strom said. "Thirty percent of our employees are directly involved in mechanical repair."

One of the few exceptions in the group is Mike Schoonover of Schoonover Bodyworks in St. Paul, Minn., who recently joined the Collision Division Operations Committee for the Automotive Service Association (ASA). Schoonover said the only non-collision service his company offers is detailing.

"We do it to help defer the cost of the 'free' cleaning we give away (or should I say no one wants to pay for) with repairs," Schoonover said.

It accounts for less than one percent of the shop's sales, he said, but it is a chance to get a customer into the shop for something other than collision repair.

"Not to mention the additional business we pick up as a result of the customer's detailing experience with us," he said.

Gary Wano, of GW and Son Auto Body in Oklahoma City, Okla., and vice chairman of SCRS, also said his company doesn't offer much outside of traditional collision repair services. His shop has chosen, for example, to sublet mechanical repairs to the dealers that exclusively use his shop for collision repair.

Needed to survive?

So is it necessary in today's market for shops to offer more than collision repair in order to thrive - or even survive?

"I think you must diversify in today's business climate," Dorn said. "You're leaving dollars on the table and your clients are going somewhere else."

"As an independent collision repairer, we cannot depend on collision repair to survive," agreed Steve Behrndt of Crawford's Auto Center in Downington, Penn., who is on the governing board of CCRE. "Towing and mechanical services help our business survive the current market conditions. With the insurance industry controlling the marketplace it has become necessary to reach out to other markets and look for business. It is interesting that most other markets allow a stronger profit margin. Collision repair has been our mainstay for over 30 years and it is tough to just walk away. But our techs have a willingness to do whatever is needed, and cross over easily."

But another CCRE board member takes another view. "I think shops can still only offer "collision only" services and survive," said Bob Isham of New Image Paint and Body Shop in Tempe, Ariz., secretary for the CCRE. "But it surely does not hurt to diversify provided you have the room."

"Every market is unique," contends March Taylor, of Autobody Hawaii in Kailua-Kona, Hawaii, who is a national director of SCRS.

His company is an authorized BMW and Lexus service center, and offers towing services, PDR, and spray-on bed liners.

"We offer these services to better position ourselves in the market," he said. "I would rather just do collision work, but as you grow that is not realistic in our market. People expect you to take care of all their needs."

But the majority of the industry leaders felt that expanding beyond collision repair services - whether they have or not - is not a necessity for survival in the industry.

"I don't think there's anything inherently wrong in offering nothing but collision services," Kostakis said. "By concentrating in a single area, one would hope that you would become an expert in that area. And unless the shop is very organized, there are certainly some obvious pitfalls when diversifying into too many areas."

Schoonover also voiced support for avoiding becoming a "jack of all trades but master of none."

"I think specialization is the key to success and being on top of your industry," he said. "There is simply too much competition out there right now. Eventually the industry will have to focus on collision repair and the repairs associated with it. I know the collision industry. I do not know the glass, or mechanical industry. I can make a bigger impact to my bottom line by focusing on collision."

Schoonover pointed to the difficulties many businesses have when branching out beyond their "core competency." He cited Ford's lack of success in collision repair (Collision Team of America) and salvage yards (Greenleaf).

Wano agreed.

"Can a repairer survive on solely collision repair? I am not only surviving, I am aggressively expanding my boundaries," he said.

Are They Representing You?

INSIGHT hasn't heard from many shop owners who feel that they aren't adequately represented by association leaders just because those leaders offer more than just collision repair in their business. And most of those association leaders contacted for this article - whether or not they offer non-collision services - dismissed such concerns.

"Being well versed in the automotive industry, I believe, can only help the business owner and industry as a whole," said Barry Dorn, of Dorn's Body and Paint, in Mechanicsville, Va.

"As long as the shop is still doing a substantial amount of collision work, they are still involved in the same problems that face all other collision shops," Dick Strom of Modern Collision Rebuild in Bainbridge Island, Wash., said. "In fact, the collision/mechanical shop might even have a more balanced approach than the strictly-collision shop, especially if the strictly-collision shop is heavy into DRPs."

Gary Wano Jr., of GW and Son Auto Body in Oklahoma City, Okla., called it "splitting hairs" to be overly concerned about industry leaders offering non-collision services.

"I am heavily invested in the high-end auto shop certification programs; should that limit my representation of the industry?" Wano asked rhetorically. "I guess my answer is: If a segment of the industry is complaining about this type of representation, then that segment may want to step up and gain those [leadership] positions."

Darrell Amberson of Lehman's Garage in Bloomington, Minn., and chairman of ASA's Collision Division, said his company does a fair amount of non-collision work. He, too, felt such experience gives leaders a broader perspective of issues, and could not cite any major issues on which collision repairers and mechanical repairers, for example, were likely to differ.   o

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