Crash Course in Collision Growth
The advantages are clear, Vincent Romans flatly states. At this point, it has become fairly obvious—at least to independent collision repair facilities.
“The dealership has an edge,” says Romans, who’s The Romans Group LLC offers analysis and consulting services to the collision repair industry. “As the total carpark increases, and especially as new technology, software and hardware comes out for autonomous vehicle features, dealerships have a chance to be the go-to [collision repair option] for consumers with new vehicles.”
Many have already taken advantage; Romans points to Berkshire Hathaway, Sonic Automotive and Group One, as large, prime examples of dealership groups that have taken a renewed focus on collision repair and turned it into a true growth opportunity.
“There’s a huge push right now for dealerships to turn collision into a growing, profitable entity that also looks good with the right image and has good relationships with the community it serves,” says Michael Macaluso, president of collision repair franchise network CARSTAR.
CARSTAR has seen dealerships become one of its fastest growing segments of franchisees in recent years, with roughly 60 facilities across North America.
Macaluso and Romans both agree that the dealership’s advantage in collision repair lies in three key dynamics of the industry’s evolution—and benefiting from this is simpler than many believe.
The Dynamics in Play
As vehicle technology—both in terms of computer systems and structural materials—has pushed the complexity of collision repair to new levels, automakers have become increasingly involved in the repair process of vehicles. And it’s led to three key developments in the industry that offer dealerships an advantage.
1. OEM Certifications. While certification programs for higher-end vehicles have been around for decades, the proliferation of domestic line programs has increased dramatically in recent years. Dealerships have easier access to the programs (many require a body shop to be sponsored by a dealer), and most often, the tools, equipment and training in place to quickly jump on board, Romans says.
2. Telematics Connection. On-board telematics systems like the now renowned OnStar feature from General Motors, offers a quicker connection from customer to automaker, which presents an opportunity for that brand’s dealerships in the event of a collision.
3. Brand Awareness and Loyalty. Looking at both of the first two points together, Romans says that it’s likely customers with newer vehicles would turn to their dealership first in the event of an accident. They already have trust in that brand and that facility—why would they go shop around if they know the “expert” already?
How to Flourish
The failure of many dealership body shops, Macaluso says, comes from a lack of focus on their operations. They aren’t a necessary evil at a dealer facility, and they aren’t backroom secret to keep out of sight for customers.
“They should be marketed and presented with just as much enthusiasm as the sales side of a dealership,” he says.
Romans agrees. Your dealership’s expertise in that automaker should translate to the body shop, and you should express that to vehicle owners at the time they purchased that car. It’s part of keeping that customer for life.
“Showcase your certifications, your expertise, your shop as a benefit to the customer,” Romans says. “These are clear competitive differentiating advantages for dealers, and if they can take advantage, they can gain market share and grow. It’s a very real opportunity.”