In masking what’s subsequent for the automotive industry, the Collision Industry Conference (CIC)’s Future Disruptions Committee took a have a look at what’s trending now and the future of changing business models for transportation, insurance coverage and claims, collision restore, salvage and recycling, and battery electrical autos (BEVs).
The July 21 presentation in Pittsburgh was centered on getting business leaders to consider what they should do to evolve with the modifications in the sorts of autos that make it to market and the ways in which they’re bought, insured, repaired, and recycled.
“The world’s changing really fast,” mentioned Committee Chair Frank Terlep. “There are several things that are affecting our industry and will affect our industry going forward. Whether we like it or not, China is and will continue to be the largest automotive market. And what that means is they’re going to have their hand in the influence of our automotive industry. …Second of all, and we’re already living with this today, we’re going to continue to see ongoing ADAS technology be added to the vehicles at breakneck speeds.”
He additionally predicts that in the close to future, there shall be autonomous autos on the street, an uptick in the rollout of BEVs, and electrical energy grid enhancements. Terlep mentioned authorities rules and socioeconomic occasions, akin to the latest Russian invasion of Ukraine, will proceed to play a task in the industry.
Transportation
Critica Consulting Principal Michael LoPrete lined the matter of transportation with a basic query: I must go someplace – how am I going to get there? He outlined 5 ranges of transportation models – some are in use in the present day, others have been trialed, many are pure hypothesis, and will emerge in the identical approach that rideshare has materialized, he mentioned.
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Michael LoPrete
Level one consists of conventional possession, taxi cabs, leases, fleet homeowners and directors, and conventional leasing. All of these he known as “the staple of what’s on the marketplace today.” Level two consists of OEM aftersales applications, superior leasing akin to Volvo’s [[Care]] program and Tesla’s leasing program, and ridesharing. ReachNow, superior ridesharing wherein firms personal a fleet of autos that their drivers use, and Turo fall below degree three. Level 4 consists of rising partial possession, enhanced OEM aftersales applications, and OEM specialty partial possession. Lastly, degree 5 covers OEM mainstream partial possession and superior fleet homeowners and directors.
“We can expect that the emerging models will be driven by ESG — environment, social, and government activities,” LoPrete mentioned. “Climate change concerns have certainly accelerated the interest in development of battery electric vehicles and the OEMs are working tirelessly to bring us more and new, and not just the legacy automakers, but the ones that are emerging.”
Advanced telematics with synthetic intelligence (AI) may even play an element in the future by introducing driverless autos and the want for assembly essential service intervals as a result of in the event that they’re missed, efficiency might be throttled by the automobile itself, similar to a foul information plan is on cell telephones, LoPrete mentioned.
In abstract of every degree, LoPrete mentioned all collision restore stakeholders serve and co-exist with the degree one transportation models from OEMs, conventional insurers, aftermarket suppliers, and recycled elements suppliers to restore amenities however may even be the emergence of fleet restore retailers.
When it involves degree two, LoPrete mentioned, “We see OEMs having a growing amount of influence supported by an ever-increasing stream of telematics. Vehicles are more likely to be repaired through the OEM-certified networks and with OEM parts.”
And LoPrete predicts that with degree three will come hybrid possession models very like a trial BMW carried out with a portal for homeowners wherein they may function as rideshare drivers or lease their autos out. Also on the identical degree is carsharing firm Turo, which LoPrete thinks might result in legacy OEMs shifting how they promote autos to customers. Some examples already provided are direct-to-consumer models and sellers holding factory-ordered autos for surcharges in the hundreds past the listing worth, he mentioned.
When it involves degree 4 partial possession models LoPrete surmised how Apple, Rolex, Airstream, Nike, and Kenworth might market to their prospects to “build a portfolio of vehicles through special agreements with OEMs for shared ownership experiences that connect very closely to their brands.” He used Ford’s previous Eddie Bauer trim collection for instance.
EV leasing additionally falls below degree 4 with LoPrete’s prediction that extra OEMs would require autos to be turned in when leases are up, like – Tesla, Ford, and GM are doing already. And “emerging entities” will check small and advance to very full applications that may uncover buyer wants and desires which can be left unaddressed by in the present day’s present options.
“New business models in collision repair will necessarily emerge and OEM mainstream and partial ownership could emerge on level five,” LoPrete mentioned. “Maybe I drive a Tesla Model 3 as my daily driver but on the weekend once in a while I want a Roadster or I want to hop into a Model S. …At the end of the day, I think where it begins to take us is an OEM vehicle repaired following OEM procedures in an OEM-certified network shop using OEM parts. How quickly do we get there? I’m just not sure about that piece.”
Insurance and claims
Trent Tinsley, Entegral b
insurance coverage and claims dealing with. First, he famous that “claims as a service” is already an operation of carriers wherein customer support is all digital however he sees that rising into digital-only insurance policies turning into the normal.![](https://www.repairerdrivennews.com/wp-content/uploads/2022/07/Tinsley-300x245.jpg?is-pending-load=1)
Trent Tinsley
“By and large, if you have a problem or if you need a refund they’re shifting to a digital model,” he mentioned. “Carriers are starting to explore this today. I think we see it with the shift towards user-prompted first notice of loss reporting. The more that they start to build those models up, the more that’s going to trickle to the claims side of the house so it’s something to consider — that maybe there is an additional premium required if you actually want involved personal interaction.”
The sorts of autos and their applied sciences might additionally “necessitate a shift” to limitless protection on repairs, leases, and tows, which higher-end carriers are already providing, he mentioned. Eventually, OEM restore plan riders is also bought by policyholders to cowl the prices of repairs in line with OEM restore procedures, Tinsley added.
Policyholders may even probably have to ensure if their service has a DRP that retailers inside it are licensed to restore their autos. Because, Tinsley mentioned, “What good would it be for carrier to cover a car and send it to a shop that can’t order the parts let alone follow OE repair procedures?”
“It’s not about an estimate. It’s not about supplements. It’s not about the existing process today. It’s about the repair plan so does my coverage need to actually reflect that?”
OEMs might additionally require leasees to buy and keep OE elements riders.
Lastly, with rising claims severity and complement prices there might be a shift into non-fault territory, Tinsley mentioned. “Does that become more of a macro-level management of the claims process because I’m just not going to want to spend the money for the human capital that is going to be at every individual claim handling that claim in the traditional claims model? Is it going to take a top-down approach?”
Collision restore
Spanesi Americas Director of Technology and Corporate Communication Karl Kirschenman lined six future models of collision restore retailers: consolidation, OEM-certified solely, impartial, specialization, superior driver help methods (ADAS) and calibration, and BEV-only.
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Karl Kirschenman
Using the latest merging of Service King with Crash Champions Kirschenman mentioned “the big will get bigger” as extra retailers merge below large manufacturers.
“There’s a certain tipping point where the consolidated shop groups outnumber the independents and then the insurance/repair dynamic may shift and that would be a seismic shift,” he mentioned. “…You’re either growing or you’re dying.”
He added {that a} business mannequin might emerge of licensed collision restore facilities being housed below one roof which can be fed by dealership teams and probably MSOs.
Requirements to be licensed and complexities of autos will “drive the development of certification which means greater than a chunk of paper on the wall, Kirschenman mentioned. Certifications as a substitute will imply specialised coaching on the building supplies and applied sciences on autos. OEMs, he famous, are already proscribing elements and utilizing different strategies to make sure technicians are correctly skilled and utilizing the proper tools to restore their autos.
For impartial retailers who could not have the sources like licensed retailers, MSOs, and “big players in the industry” have “there are a number of opportunities for them in terms of becoming part of something bigger,” he mentioned, akin to turning into half of a franchise group.
“We see that the independents will be in a more rural area where there isn’t as much competition,” and may concentrate on the manufacturers which can be standard in that space, Kirschenman mentioned, including that they may additionally subcontract newer autos out to different retailers or not work on them in any respect.
“The independents have always had their challenges and I think that continues to grow in this next evolution of vehicle construction,” he mentioned.
Kirschenman sees fleet repairs as an choice for impartial retailers to keep up a gradual workflow in the event that they deal with engaged on manufacturers that use the identical instruments and coaching to avoid wasting on coaching and tools prices. He added that, usually, retailers should specialize not directly to remain afloat.
Bringing in a brand new technology of technicians shall be half of that to supply income streams in ADAS scanning, recalibrations, and diagnostics, he mentioned. The committee discovered that 200 million autos are predicted to have ADAS by 2030 and that ADAS calibrations will generate $3 billion per 12 months in income by then.
Lastly, the collision restore industry might want to contemplate having separate amenities for BEV repairs as a result of of their “inherent danger” and to maintain entry restricted to technicians which can be skilled to work on them, Kirschenman mentioned. Pre-delivery inspections will develop, relying on the producer and there shall be two new business ventures for retailers – public-use EV chargers and BEV storage.
BEVs was lined extra in-depth by I-CAR Technical Programs and Services Director Dirk Fuchs and Lucid Motors
Fuchs mentioned there are a number of issues retailers want to think about earlier than promoting EV charging at public-use stations on their property. First, does your state enable electrical energy to be resold? Also, what does your electrical energy supplier require, which probably would come with financial prices for demand on the grid and will even require the set up of a separate grid. There might be limits, too, on how a lot electrical energy might be supplied, he mentioned.
Fuchs additionally shared how a lot how a lot companies might doubtlessly make in income off of EV charging stations, minus demand prices incurred:
Rodenroth identified that, “The BEV customer is very different. They are a very interesting group and they have a different set of concerns.”
Different issues are essential to BEV prospects, he mentioned, together with battery vary, consolation, comfort, all of the know-how “bells and whistles,” connectivity, and wonderful customer support. Similar to Tesla and Rivian, Lucid prospects are in a position to construct their vehicles on-line after which see a rendering at an OEM studio then check drive vehicles which can be there. Of course, as Rodenroth identified, that’s “very different than the traditional sales model.”
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Jake Rodenroth
Lucid additionally solely enable retailers that they certify to work on their autos and restricts elements buying to these areas. When Rodenroth and his workforce are in search of restore retailers to be of their licensed networks, they need to see high quality service in motion with out figuring out they’re going to go to, he mentioned.
Rodenroth invited co-owners, Robert and Christina Molina of Collision Care Xpress in Florida to speak throughout the committee’s presentation for instance of the kind of store Lucid certifies. In a Q&A session with them, they talked about how they’re discovering workers amid the nationwide technician scarcity and their store tradition.
“It’s been a downfall of our industry that we can’t get good quality people into it so we’ve looked outside the box,” Robert Molina mentioned.
They’ve partnered with schools and universities that provide EV OEM restore applications and helped them buy tools for his or her college students. They’re additionally coaching college students on that tools and providing technician and estimator apprenticeships.
Rodenroth mentioned when he visited Collision Care Xpress, he was impressed by how the Molinas interacted with their workers to maintain them engaged and enthusiastic about work. He additionally appreciated that that they had their very own advertising workforce, which he mentioned he’s by no means seen a store have.
Christina Molina mentioned worker engagement is a precedence at their store with enjoyable occasions each at work and out of doors of work however workers additionally know they’re going to be held accountable for his or her work.
Salvage and Recycling
Automotive Recyclers Association Executive Director Sandy Blalock lined what she sees as challenges dealing with the salvage and recycling sector of the automotive industry and the way they need to be a strategic associate with the industry as a complete.
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Sandy Blalock
A couple of of the challenges are information integrity, buying stock, and changing buyer expectations, she mentioned. “The industry’s response to these challenges are going to be determining our future. …We’ve seen a shifting paradigm for many years in our industry. The professional automotive recycler knows that the old ways are no longer going to open up those doors.”
She additionally famous six “areas of disruption” which can be impacting the industry now and can in the close to future: consolidation, OEM restore procedures, certification, ADAS calibration, BEVs and synthetic intelligence (AI).
Blalock mentioned she believes the rising quantity of enterprise capital firms will proceed to enter the industry and mergers, very like these taking place in the collision restore industry, will happen.
As for OEM restore procedures, she mentioned ARA understands their significance however doesn’t imagine legal guidelines needs to be required for them to be adopted.
Certification additionally has a task in the current and future of ARA. The affiliation has maintained certifications for a few years, Blalock mentioned, and lately up to date its certification mannequin to incorporate a high-voltage automobile dismantling protocol. The purpose of the protocol is to ensure recyclers are ready for the future and perceive their tasks to their business, workers, communities, and prospects, she mentioned. ARA can be working with different organizations to develop a protocol for dealing with BEVs, EVs, and all of their parts
With ADAS comes “immense potential” for the resale of the parts again into the market, Blalock mentioned. “However, professional auto recyclers are going to need more access to the ADAS calibration [processes] to guarantee the proper fit and function for those products. It really is necessary to put more of these electronic components back into the marketplace to help control repair costs and, the big one, to do away with the huge pitfall of electronic waste.”
Lastly, AI is presently utilized by recyclers to stock autos however Blalock sees it in the future as a device for buying autos and to judge them prior to purchasing.
When the committee requested what subjects CIC assembly attendees wished to study extra about subsequent time there was a tie at 24% on three of the 5 decisions — robotics in collision restore, automobile self-diagnostics, and the future of new automobile dealership models. The future of telematics was of curiosity to 16% of the viewers and 11% mentioned they wished to know extra about augmented actuality (AR) and digital actuality (VR).
IMAGES
Featured picture credit score: onurdongel/iStock
Photo of slide from presentation by Dirk Fuchs (Credit: CIC and Lurah Lowery)
(Left to proper) Frank Terlep, Trent Tinsley, Karl Kirschenman, Jake Rodenroth, Dirk Fuchs, Sandy Blalock, and Michael LoPrete. (Credit: Lurah Lowery)
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