The Society of Collision Repair Specialists (SCRS) has released video from the 2012 SEMA Show panel discussion on parts procurement. The panel included international guests who have firsthand experience with insurer-mandated parts procurement in their respective countries.
The program, part of SCRS’ Repairer Driven Education (RDE) curriculum, was titled, "Bidding Wars: A Global View on the Possible Economic Impact of Insurer Involvement in Parts Procurement." Panel participants, with links to videos of their respective presentations, included:
- David Newton-Ross (Australia), publisher of National Collision Repairer and The NZ Collision Repairer and organizer of the Collision Repair Specialists Australia (CRSA) Conference;
- Rex Crowther (New Zealand), a former facility owner, current editor/publisher of Panel Talk and former executive chairman of the New Zealand Collision Repair Association;
- John Norris (Canada), collision chairman of the National Automotive Trades Association of Canada and executive director of Ontario-based Collision Industry Information Assistance, the second-largest trade group in Canada.
"Based on my experience, the situation in the U.S. is bad, and will worsen as more American insurers get on board with the programs," said Newton-Ross. "Over time, the collision repairer will lose in almost every way imaginable: loss of profitability thanks to cheaper parts, loss of efficiency as inferior parts need to be reworked, and loss of relationships with suppliers. The only gain they will see is many more accounts to handle. The reason that the impact of these programs wasn’t worse in Australia is that we worked together as an industry to raise consumer awareness, and that helped put a stop to the spread of the programs. When consumers find out what’s going on, they get concerned — and for good reason."
In addition to seeking perspectives from other market areas, SCRS’ recent focus has been on the perspectives of domestic collision repair facilities. In a survey conducted during the months of December 2012 and January 2013, SCRS collected responses and reactions from more than 400 collision repair businesses to industry issues such as insurer-mandated parts procurement programs. Of those who responded, more than 70 percent indicated they participate in one or more DRPs, with the largest segment (39.3 percent of total respondents) indicating they currently participate in two to five DRPs.
Repair facilities were asked if they "consider insurance carriers mandating processes, such as how to locate and order parts, an intrusion into your business or an area that would benefit from collaboration." Approximately 91.4 percent of total respondents consider these processes "an intrusion." Approximately 91.8 percent of the total respondents indicated that they’re "concerned about how insurer-mandated parts bidding will impact the industry."
"We continue to research this issue and put together educational opportunities to help our industry understand the very real impact these programs have had in other markets, and are already having here in the U.S.," said SCRS Executive Director Aaron Schulenburg. "By exploring the cause and effects of these programs in other countries, U.S. collision repairers can better understand the likely outcome of the programs in our country and effectively strategize how their businesses will individually address such programs based on a well-informed understanding of the potential advantages and disadvantages. Our industry is global; sharing information is a vital activity in which we should all participate, as we hope this forum exemplified."
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