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AUTOBODYNEWS.COM Vol. 12 / Issue 4 / June 2021
Floridian Sentenced After Fraudulently Obtaining $3.9 Million in PPP Loans
Two Responses to COVID for Collision Repairers— Resilience and Realization
A Florida man was sentenced May 12 to more than six years in prison for fraudulently obtaining approximately $3.9 million in Paycheck Protection Program (PPP) loans and using those funds, in part, to purchase a $318,000 Lamborghini
by David Roberts, Focus Advisors
luxury car for himself. David T. Hines, 29, of Miami, pleaded guilty Feb. 10 to one count of wire fraud. According to court documents, Hines submitted multiple PPP applications to a PPP-participating lender, claiming to have had dozens of employees and millions of dollars in monthly payroll. Hines also assisted other individuals in obtaining fraudulent PPP loans. As part of the sentence, the court ordered Hines to forfeit the $3.4 million in fraudulent loan proceeds that law enforcement seized See Floridian Sentenced, Page 18
Overall Rate of Uninsured Drivers Nationally Remains Flat by John Yoswick
Efforts to crack down on uninsured motorists in the U.S. appear to be having little effect, according to the most recent findings from the Insurance Research Council (IRC). In a report updated every three or four years, the IRC in April estimated one in eight drivers on the road in 2019―12.6%―lacked insurance. That’s down from 13% in 2015, but up from 12.3% in 2010. The figure potentially impacts collision repairers in that insured vehicles are more likely to be repaired
after an accident, and because atfault drivers who lack insurance increase insurance costs for those with policies. But state law regulates insurance, including enforcement of insurance requirements for drivers, and the rate of uninsured drivers varies widely by state, according to IRC data. Just 3.1% of New Jersey drivers lacked insurance in 2019―down significantly from 14.9% in 2015― but at the other end of the spectrum, nearly three in 10 drivers (29.4%) in See Uninsured Drivers, Page 19
In dozens of discussions with shop owners over the past four months, there is a marked divergence among MSOs about their plans for the future. Many who are experiencing a strong rebound in revenues have strong balance sheets and managed their expenses throughout the pandemic, and now have embarked on more aggressive expansion. Others are reconsidering their alternatives post-COVID, as their recovery proceeds more unevenly and more slow-
ly than anticipated. The former are carefully identifying expansion opportunities. One client is in the process of buying a dealer body shop. Another client has committed to building a large greenfield location in a rapidly expanding portion of his market. Among those who are reconsidering their future are some who have been planning their exit opportunities for a long time but have been reluctant to pull the trigger. Others are exhausted: “I just don’t have it in me to roll this rock up the mountain one See Two Responses to COVID, Page 10
Historic Recovery Ahead for U.S. Economy in 2021, Predicts UCF Economist by Josh Miranda, UCF Today
Fueled by a release of pent-up economic demand, unemployment will decline and Americans will spend more money through 2021, says Sean Snaith, renowned economist and director of UCF’s Institute for Economic Forecasting. While consumer spending shrank by 3.9% in 2020 amid the recession, the institute’s first-quarter U.S. forecast predicts spending will accelerate to an increase of 5.4% this year and slow to an increase of 2.6% by 2024. CARES Act funding and the COVID-19 vaccine are quelling fear of the pandemic, prompting consumers to open their wallets and businesses to hire new employees. Snaith maintains a positive outlook on the months ahead, but it could take until 2022 for unemployment to fall back to pre-pandemic levels. “Job growth will help ease the damage to the labor market from the lockdown, but the road to recovery will take at least another year,”
Snaith says. “Consumers are powering this recovery, and as the effects of the pandemic fade, consumer confidence will rise in tow.” In the report, Snaith predicts: Job growth will continue. The growth rate will reach 3.9% in 2021, before slowing to 3.1% in 2022, 0.8% in 2023 and 0.5% in 2024. Unemployment will decline to 4.2% by 2023. The housing market will continue to progress and improve through 2021—new-home construction will rise from 1.38 million in 2020 to 1.56 million in 2021, then decelerate to 1.24 million by 2024. Real Gross Domestic Product (GDP) growth will accelerate from its historic 2020 low to 5.4% in 2021, before easing to 4% in 2022, 2.5% in 2023 and 2.4% in 2024. With economic policy measures largely at a standstill in Washington, D.C., public health initiatives will likely drive the speed of the nation’s economic recovery. The looming See Historic Recovery, Page 21
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REGIONAL Auto Body Shop Paint Booth Builder Cleans Up with Lottery Ticket Bought in VA����������������������6 Classic Collision, GEICO, NABC Donate Refurbished Vehicle to a Deserving Recipient������������������������������������������������������17 Court Brief Reveals AGA Strategy����������������������12 Floridian Sentenced After Fraudulently Obtaining $3.9 Million in PPP Loans����������������1 Giles County, TN, Auto Body Shop Owner Remembered as Authorities Investigate Possible Homicide����������������������������������������14 GM Defense Names New President, Opens New NC Production Facility�����������������������������6 HGreg.com Opens Flagship, Next-Generation Storefront in Tampa����������������������������������������8 South Carolina Driver Killed by Exploding Takata Airbag in Honda Accord������������������������8 Tennessee Storm Destroys Classic Car Dealership����������������������������������������������������17
Wearing Masks�����������������������������������������������4 Ford Releases New Position Statement on Bumper Fascias��������������������������������������������40 Ford Reports 1Q Net Income of $3.3B, Best in a Decade�������������������������������������������20 FordDirect Picks Platform Provider��������������������18 Fossil Fuel Emergency: U.S. Races to Move Gasoline After a Pipeline Hack�����������������������47 FTC Examines Anti-Competitive Repair
Anderson - Collision Repair Industry Has a New Voice on OEM Safety Inspections�����������26 Phillips - Best Practices for an Effective Health and Safety Program���������������������������34 Yoswick - CIC Speakers Discuss Employment
Expand Consumers’ Options�������������������������44 Hertz Posts Positive EBITDA in Q1���������������������31
in 2021, Predicts UCF Economist��������������������1
a Skeptical World������������������������������������������36
Shows COVID-19’s Impact on the Industry����43 Mitchell 1 Expands ADAS Coverage�������������������21
Regulator Stresses Need for Documented Collision Repair Customer Authorization, Updates��������������������������������������������������������27
Subaru Announces Electric SUV������������������������21
AkzoNobel Launches Training Platform�������������12
Tesla and Its Peers Proving EVs Inherently
Economic Consequences, Experts Warn��������44
Shift Focus to High-Profit Vehicles�����������������42 Collision Repair Industry Veteran and Author Gary Ledoux Writes into the Sunset���������������28 Collision Repair Veteran Brings I-CAR Training to Collision Industry in China�������������������������37 Everything’s Changed: The Pandemic’s Impact Will Be Felt Long After We Stop
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AutoNation Collision Parts��������������������������������� 5
Jim Cogdill Chrysler-Dodge-Jeep-Ram����������� 12
AutoNation Ford-Lincoln��������������������������������� 27
John Heister Automotive��������������������������������� 33
AutoNation Ford-Memphis������������������������������ 10
Kia Motors Wholesale Parts Dealers���������������� 41
Benchmark Automotive����������������������������������� 30
Mazda Wholesale Parts Dealers���������������������� 45
BMW Wholesale Parts Dealers������������������������ 42
Mercedes-Benz of Cutler Bay�������������������������� 26
Certified Automotive Parts Association������������ 20
Mercedes-Benz Wholesale Parts Dealers�������� 40
City Kia of Greater Orlando������������������������������ 35
Miami Lakes Automall������������������������������������� 19
MINI of Charleston������������������������������������������ 35
Colad/EMM Specialties����������������������������������� 48
MINI Wholesale Parts Dealers�������������������������� 42
Florida Filtration & Spray Booth Services����������� 8
MOPAR Wholesale Parts Dealers��������������������� 29
Ford Wholesale Parts Dealers�������������������������� 36
Pro Spot International��������������������������������������� 2
GM Wholesale Parts Dealers��������������������������� 43
Rick Hendrick Chevrolet Naples���������������������� 34
Gus Machado Ford������������������������������������������ 16
Riverside Ford-Lincoln������������������������������������ 21
Harper Volkswagen����������������������������������������� 14
SATA Dan-Am Company���������������������������������� 11
Hendrick Automotive Group����������������������������� 15
Southside Kia�������������������������������������������������� 31
Hendrick BMW/MINI������������������������������������������ 7
Sport Durst Automotive Group������������������������� 13
Hendrick Honda Pompano Beach�������������������� 33
Subaru Wholesale Parts Dealers���������������������� 37
Hendrick Kia Cary������������������������������������������� 17
Tameron Hyundai�������������������������������������������� 32
Hendrick Kia Concord������������������������������������� 17
Volkswagen Wholesale Parts Dealers�������������� 45
Chip Shortage Forces U.S. Automakers to
Hyundai Wholesale Parts Dealers�������������������� 38
Your Car: Kelley Blue Book����������������������������47 Overall Rate of Uninsured Drivers Nationally
on Quality Validation Needs���������������������������32
Biden’s Emissions Pledge Comes with
American Icon Automotive Finishes����������������� 18
Most, Least Expensive Cars to Insure Named����19
Sherwin-Williams’ Lee Rush Provides Insight
on Anti-Competitive Repair Restrictions��������18
Honda-Acura Wholesale Parts Dealers�23, 24-25
LexisNexis U.S. Auto Insurance Trends Report
SEMA Show Registration Open���������������������������8
Axalta Launches Mobility Coatings��������������������43
Audi Wholesale Parts Dealers�������������������������� 39
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How to Get Your Customers to Trust You in
Concerns with Evs����������������������������������������30
Auto Care Association Applauds FTC Report
Serving Florida, Georgia, Alabama, Mississippi, Virginia, West Virginia, Tennessee, North Carolina, South Carolina and adjacent metro areas. Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2021 Adamantine Media LLC.
Historic Recovery Ahead for U.S. Economy
Issues Related to Vaccines, Fire-Related
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Safer than Combustion Cars�������������������������22 Tesla Says All Supercharger Energy Will Be Renewable in 2021���������������������������������������39 Toyota Acquires Lyft’s Self-Driving Unit for More Than Half a Billion Dollars��������������������46 Two Responses to COVID for Collision Repairers—Resilience and Realization������������1 Vehicle Trade-In Values Climb to All-Time Record High in March: Edmunds�������������������22 Volkswagen Group Reports Strong Results in Q1 2021���������������������������������������������������45 Why Tesla Hasn’t Been Affected by the Global Chip Shortage������������������������������������40
Hendrick Volvo Cars of Charleston������������������� 35
autobodynews.com / JUNE 2021 AUTOBODY NEWS 3
Everything’s Changed: The Pandemic’s Impact Will Be Felt Long After We Stop Wearing Masks by Paul A. Eisenstein, The Detroit Bureau
Visit any North American auto assembly plant and you’ll quickly notice how much things have changed since factories reopened after a two-month shutdown during spring 2020. There are the ever-present masks, of course, and the way things have been reorganized, in break rooms as well as on the line, to minimize the risk of spreading the COVID-19 virus. It’s likely a matter of time until workers can remove their masks. But many of the other changes are likely to be permanent. Indeed, from manufacturing to marketing and retailing, there have been a number of changes brought by the pandemic that are likely to be long term and, perhaps, permanent. And they will impact automotive buyers as well as manufacturers. “The pandemic has just changed the game,” said David Cole, chairman emeritus of the Center for Automotive Research. “Just about every automaker,” he said, will be changing business practices “to hedge against unexpected situations, whether an earthquake or a pandemic.” The pandemic has played out in plenty of unexpected ways. That includes the ongoing shortage of semiconductors forcing almost every manufacturer to slow―and in some cases temporarily halt―production. With millions of Americans in lockdown and even more working from home, chip vendors face unprecedented demand from manufacturers of web cameras, videogame consoles and cellphones, leaving automakers high and dry. Experts warn the situation could continue through the end of this year. It’s highlighted the vulnerabilities of an automotive manufacturing system that has, during the past 30 years, evolved into a just-in-time process mandating minimum inventories. In many cases, factories receive parts just minutes before they’re needed on the line. When it all works it can hold down costs and give automakers more control over production schedules―while also improving quality. When it fails, well, automakers can be forced to shut plants down.
Floods, blizzards, even earthquakes can briefly disrupt the JIT system. Typically the impact of those events is has been brief, the semiconductor shortage reveals the logistics behind lean inventory systems also can come crashing down for an extended period. At a recent event hosted by Automotive News, Ford CEO Jim Farley admitted he has just begun to recognize the challenges of maintaining thin factory inventories, adding, “Most other industries use safety stock for critical components like chips.”
On average, U.S. dealers have between a 60- to 75-day supply of every model they sell on their lots. That approach is costly and creates a variety of problems. A large dealership can spend tens, even hundreds of thousands of dollars a month in inventory holding costs. Manufacturers must guess what vehicles consumers will buy months ahead, and if they’re wrong they usually wind up paying for their mistakes in the form of hefty incentives. That became especially apparent during the run up to the Great
Weld curtains hang across the door line at FCA’s Sterling Heights (Michigan) Assembly Plant to protect employees from the spread and transmission of COVID-19
While the just-in-time system isn’t likely to be abandoned, analyst Cole and others expect the industry to make some big changes. There’ll likely be more padding to prevent unexpected disruptions. And automakers may have to set up “safety stock” of critical goods, such microchips, more like the way they handled things in the pre-JIT era. Ironically, we’re likely to see big cuts in inventory at the other end of the automotive chain. Since the industry’s earliest days, manufacturers have pushed dealers to maintain a large stock of vehicles. The argument is American car buyers want instant gratification. Unlike motorists in Europe and other parts of the world who are willing to wait for their vehicle to be delivered from the factory, Americans expect to go shopping and then drive home in their new model the same day.
4 JUNE 2021 AUTOBODY NEWS / autobodynews.com
Recession, some products carrying givebacks of more than $10,000. Such profit-eating incentives played a major role in driving General Motors and then Chrysler LLC into bankruptcy in 2009. “I’ve been saying for years that overproduction” to keep showrooms overstocked “has been ruinous for the industry,” Mike Jackson, the CEO of AutoNation, America’s largest auto retail chain, told TheDetroit Bureau.com. If anything, the pandemic has led to a massive reduction in dealer stocks, J.D. Power reporting U.S. retailers had about 1 million fewer vehicles in stock during the first quarter than they normally would. The pandemic factory shutdowns created the shortage, but the ongoing microchip shortage means manufacturers can’t refill pipelines as quick as they’d hoped. And, it turns out, that’s a good thing.
AutoNation and most of its retail competitors posted their biggest profits ever during the first quarter of this year. Clearly, the fact U.S. buyers are hungrier than ever for new vehicles has helped. And what dealers and manufacturers have both discovered is that “buyers were willing to wait,” according to Jackson, sometimes as long as six weeks to take delivery of the vehicles they sought. It has helped that the industry has been tinkering with the retail process. Most automakers have developed sophisticated new online shopping tools. The key has been to let buyers control the purchase process, whether they went to do everything in the showroom or shop entirely online, said Jackson and other dealers. AutoNation, in particular, has made it possible for customers to not only track inventory on dealer lots but also vehicles in transit from factory to showroom. So, while automakers are rushing to rebuild the inventories of especially popular models, like the Toyota RAV4 and Ford F-150, customers shouldn’t expect to find acres of unsold vehicles at most showrooms going forward. “We’ll never go back to levels of inventory we had pre-pandemic because we’ve learned we can be much more efficient,” GM Chairman and CEO Mary Barra said during a May 5 earnings call. If the first quarter is any indication, this approach will prove to be a lot more profitable for manufacturers and retailers alike. But consumers should expect to not only be in for a wait when they’re ready to buy but also to pay a bit more. Lower inventories mean lower factory incentives and less lucrative discounts from dealers desperate to clear out inventory, said Cole. On the positive side, leaning out the marketing and distribution system could cut overall costs, money that manufacturers could pass on the consumers in the form of lower sticker prices. We thank The Detroit Bureau for reprint permission.
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GM Defense Names New President, Opens New NC Production Facility GM Defense LLC, a subsidiary of General Motors, on May 5 announced Steve duMont as its new president, while also celebrating the official opening of its new production facility in Concord, NC, where it will manufacture the Infantry Squad Vehicle (ISV), a light and agile all-terrain troop carrier for the U.S. Army. DuMont joins GM Defense from Raytheon Intelligence & Space, a business of Raytheon Technologies, where he led and implemented a focused strategy for global growth. He held various leadership positions during his more than 13 years at Raytheon, as well as previous systems engineering and program leadership positions with BAE Systems and Boeing. Prior to the private sector, duMont served as an aviation officer and attack helicopter pilot in the U.S. Army. “Steve’s robust defense, business dvelopment and military experience position him well to advance the vision of GM Defense,” said Pam Fletcher, GM vice president of Global Innovation. “As we welcome Steve to the GM family, we also thank Tim Herrick for serving as interim president in the recent months.”
“I’m honored to be joining GM to lead the GM Defense team,” said duMont. “I wanted to continue my career with an organization that can provide solutions to address some of the toughest problems that our defense customers are facing, and GM Defense is doing just that. The company has the ability to disrupt the industry by bringing significant commercial innovation forward, and I’m truly excited to lead this team at such an important time for our defense and government customers around the world.” In his new role as president, duMont will leverage the best-in-class capabilities of GM to bring worldclass manufacturing and quality, design and engineering, and commercial innovation to defense and government customers. One such example of leveraging GM’s strengths in manufacturing is GM Defense’s new Concord production facility. In just over 90 days—from the start of construction to the start of vehicle production— GM Defense has demonstrated its fast-to-field capabilities by standing up a state-of-the-art tactical wheeled vehicle manufacturing center.
The facility will build ISVs in support of a $214.3 million U.S. Army contract award. The Army has an acquisition objective of 2,065 vehicles for the Infantry Brigade Combat Teams. The new 75,000-square foot plant includes some of the latest manufacturing tools, including a digital operating system using Bluetooth-enabled tools to meet U.S. Army requirements with extreme precision. The advanced tools will help ensure the highest level of quality while enabling greater efficiencies throughout the ISV build. Now the newest and one of the most advanced production lines for tactical wheeled vehicles, the GM Defense Concord facility will support ISV full rate production. “Our ability to build vehicles after the start of construction in just over 90 days, combined with the rapid delivery of the first ISV to the U.S. Army 120 days after contract award, underscores the world-class manufacturing capabilities and innovation we bring to our customers,” said Herrick, former interim president of GM Defense and GM’s vice president for Global Product Programs. “I look forward to supporting Steve as he the
expands the company’s North Carolina footprint and pursues new defense and government contracts.” The Concord production site is just minutes from Hendrick Motorsports, which is responsible for providing the chrome-moly steel exoskeleton of the vehicle frame, including the GM Defense-designed Roll Over Protection System. GM Defense also has a teammate in Ricardo Defense, which leads the Integrated Product Support, including technical manual development, new equipment training, provisioning, total package fielding and field service support for the ISV. The ISV is based on the award-winning 2020 Chevrolet Colorado ZR2 midsize truck architecture and features 90% commercial-offthe-shelf parts, including Chevrolet Performance race components proven to perform under tough off-road conditions. The expeditionary vehicle is designed to provide a “better boot” to infantry soldiers, helping to eliminate the traditional march of wars past and providing rapid mobility to the fight on nearly any battlefield. Source: GM
Auto Body Shop Paint Booth Builder Cleans Up with Lottery Ticket Bought in VA ordinary ticket. “I saw all the zeros, and it blew my mind!” he told Virginia Lottery officials. “I’ve never won something like this before!” Commonwealth is one of dozens of Scratchers available from the Virginia Lottery and features prizes ranging from $30 to $1 million. Jasper had the choice of taking the full $1 million prize over 30 years, or a one-time cash option of $640,205 before taxes. He chose the cash option. The chances of winning the top prize are 1 in 1,060,800. The chances of winning any prize in this game are 1 in 2.92. This is the first of three top Brian Jasper recently bought a winning lottery prizes claimed in the Commonwealth game, which means two ticket at a convenience store. more remain unclaimed. Along with the soap, he Jasper, who lives in Fuquay– bought a ticket for the Virginia Varina, NC, said the winnings Lottery game Commonwealth. will help his small business. A few moments later, when he scratched the ticket in his truck, We thank The Free Lance-Star for he immediately saw this was no reprint permission. As part of his work building paint booths for auto body shops, Brian Jasper needed to pick up some dishwashing detergent. He was working on a job in the Fredericksburg, VA, area, so he went by the Royal Farms store at 5301 Jefferson Davis Highway.
6 JUNE 2021 AUTOBODY NEWS / autobodynews.com
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autobodynews.com / JUNE 2021 AUTOBODY NEWS 7
SEMA Show Registration Open Registration for the 2021 SEMA Show, scheduled for Nov. 2-5 at the Las Vegas Convention Center in Las Vegas, NV, is now open at www.semashow.com/ register. The 2021 SEMA Show already has more than 1,500 companies confirmed to exhibit and many more expected. Exhibitors include major automakers and small businesses, as well as iconic aftermarket manufacturers who are enhancing their booths to heighten their presence at what will be the first industry-wide in-person gathering for the $46.2 billion specialty automotive industry in nearly two years. Registration is offered in three categories—attendee, exhibitor and media—and everyone must qualify to receive a badge and attend. For more information about qualifying documents and the 2021 SEMA Show, log on to www.semashow.com. Source: SEMA
HGreg.com Opens Flagship, Next-Generation Storefront in Tampa HGreg.com, one of the fastest growing automotive groups in North America, opened the doors to its newest storefront in Tampa, FL. Located at 1207 E Brandon Blvd, in Brandon, FL, in Hillsborough County, on a 10-acre property, the site features a 42,000-square foot, next generation storefront and fulfillment center, and inventory of more than 1,000 pre-owned vehicles. “Tampa is a wonderful gateway to the West Coast of Florida and springboard for our growth plans,” said John Hairabedian, president and CEO of HGreg. com. “We’re happy to expand our team in the region and to make this property a key part of our plans for servicing our customers up and down the coast—and beyond— through a combination of in-store experience, when convenient, and the digital experience.” HGreg.com officially purchased the property March 16 and invested more than $30 million to transform the showroom to its spacious and modern style and layout.
South Carolina Driver Killed by Exploding Takata Airbag in Honda Accord by Brad Anderson, CarScoops
A South Carolina motorist has become the latest victim of an exploding Takata airbag inflator. On April 21, Honda confirmed the driver of a 2002 Accord was killed in a crash Jan. 9 near Charlotte, NC, when the airbag inflator of their vehicle blew apart in a crash. The Japanese car manufacturer did not identify the person who was killed.
Officials from Honda and the National Highway Traffic Safety Administration recently inspected the car and confirmed the inflator had ruptured. This marks the 19th death in the U.S. since 2009 caused by the faulty Takata airbag inflator, and the 28th confirmed fatality worldwide, NPR reports.
The airbag inflators in question used ammonium nitrate to create an explosion in order to inflate airbags in a crash. However, when exposed to moisture and humidity, the chemical can become more volatile, and in the event of a crash, the explosion can blow apart a metal canister and send shrapnel flying into the passenger compartment. Honda says this Accord involved was recalled in April 2011 but records show the recall repair was never completed. The driver who was killed in the crash was not the registered owner of the car and Honda doesn’t know if they knew of the unrepaired recall. The current owner was sent a recall notice Nov. 17, 2020, but failed to act. The car manufacturer has urged all owners of affected vehicles to have the recall repairs completed. They can check whether their vehicles have been recalled by visiting nhtsa.gov/recalls and typing their car’s 17-digit vehicle identification number (VIN). We thank CarScoops for reprint permission.
8 JUNE 2021 AUTOBODY NEWS / autobodynews.com
The company is in the final stages of hiring and training a team of 100 full and part-time associates, while keeping the door open for future positions in the months to come.
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guarantee. “We opened in Florida more than 10 years ago and the growth has been strong,” continued Hairabedian. “Customers from across the state have appreciated our customer-first culture, inventory of cars, commitment to technology and the online purchase experience. We’re excited at our future in the region and will do everything we can to help customers save more and drive happier.” In Florida since 2009, HGreg. com owns and operates a network of nine dealerships in the state— two new car and seven pre-owned dealerships including HGreg Lux, which focuses on luxury preowned vehicles. HGreg.com encourages anyone with an entrepreneurial spirit and passion for technology, cars and service to apply at HGreg. com/careers. The company stands apart from many in the industry by insisting that sales representatives do not receive a commission based on the value of a vehicle. Source: HGreg.com
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Continued from Cover
Two Responses to COVID more time. COVID really took it out of me.” Slow recovery seems to be a common thread: “I’m finally ramping up, but at this rate it will take me over a year to get back to where I was.” COVID may be the straw that broke the camel’s back for some. Between pressures from insurance companies (including being dropped by State Farm or USAA), additional investments for certifications and new equipment, and the retirement of senior technicians, several operators have decided that it’s time to let somebody else take over the business. For some of our clients, the hard decision to sell has already been made. Now they’re spending their time preparing their companies for a positive exit with a more defined future for their technicians and managers. One operator who is still sitting on the fence is concerned an acquirer may not treat his employees as well as he does. Another is worried because his children have no interest in the business, the family name on the door will be lost forever. Another is uncertain about whether he will ever regain his pre-COVID profitability even though his revenues are coming back strongly. For operators who are reengaging positively with their businesses, many have taken the opportunity during the pandemic to revamp their operations, restructure their teams, improve their training and upgrade their facilities. One of our clients improved his margins by two points during COVID. His comment was, “I finally got around to doing things I’d wanted to do for 15 years.” Conclusions Coming Out of COVID Undoubtedly, savvy operators are recognizing that staying in the industry will require more capital, more scale and better leadership. Some have very frankly recognized their own limitations and decided to add senior management with capabilities greater than their own. One of the questions we get is, “How should I compensate a senior leader with better management skills than
me?” Our response is to never be afraid to pay somebody really well if they are contributing more value to the business than you can do by yourself. A smart operator who intends to create equity value in the business to be harvested in the future can’t do it alone. So be prepared to pay a generous salary and benefits as well as some equity or stock appreciation rights to that new leader. Another area where operators are finding increasing need is in finance. For those growing beyond the $20 million mark in revenue with six or more shops, really competent and experienced financial assistance is a necessity. One option is to outsource contractors. Part-time CFOs are an alternative. A really well qualified controller or CFO can relieve the owners of many administrative and financial burdens in a rapidly growing organization. Questions Both expanding operators and those who are considering exiting the business are asking many of the same questions. What about valuations? How much will my COVID numbers hurt me? Will I be judged valued on my 2019 numbers or my 2020 numbers? In general, all acquirers look primarily at the trailing 12 months revenues and EBITDA. However, our firm has been successful in helping acquirers understand that full year 2019 and first quarter 2021 are fairly indicative of the capability and health of the business. In looking ahead to 2021, business performance in 2019 is a fairly reliable indication of where the business will likely return or exceed. However, as 2019 falls farther back in the rearview mirror, we think valuations will be more based on 2021 results and their progression. How do acquirers look at EBITDA during the PPP loan period? PPP loans can be challenging for acquirers to analyze. Their impact on the business is admittedly hard to tease out. Highlighting excess labor that was retained during COVID in accordance with the PPP loans has been a successful way for our clients to engage with acquirers. However, we have also been
10 JUNE 2021 AUTOBODY NEWS / autobodynews.com
successful treating PPP (and EIDL) loans as grants, and thus income, which tend to more than offset the extra costs imposed by their forgiveness criteria. Is it a good idea to grow right now? Yes. We think there are opportunities in just about every market to find and acquire other operators who are struggling or who just want to exit. By acquiring another operator, you get immediate cash flow and (hopefully) EBITDA, a trained staff and an operating business. Fixing an underperforming business isn’t simple but if the core staff and relationships are there, it’s a more immediate return than starting from scratch. A brown or greenfield startup is lots of fun and challenging with infrastructure costs, hiring staff, obtaining licenses and establishing new DRP relationships, but EBITDA is slow in developing. For those operators who are acquiring, we’ve also seen creative methods for financing the purchase, including seller financing and SBA loans that wrap both the business and the real estate into one loan.
What have we seen among acquirers during the COVID period? Almost every large acquirer paused briefly to reassess their own acquisition criteria and to stabilize their operations. Caliber, which has slowed its pace of acquisitions over the last year and a half, temporarily suspended rent payments to a number of its landlords. It also paused or eliminated some internal and external initiatives. However, Caliber restored both back rent and current payments to landlords in the midst of the pandemic and has not wavered since. Several of the more seasoned super-regional acquirers, such as Crash Champions and Classic Collision, hardly slowed at all. And new entrants, Quality Collision and CollisionRight, launched in the midst of the pandemic. CARSTAR and FIXAUTO USA continued to add new franchisees although at a slower pace than pre-COVID. Smaller operators such as Mitchco, now up to four locations in Florida, G&C with 19 locations in Northern California, and several See Two Responses to COVID, Page 16
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Court Brief Reveals AGA Strategy Trial briefs were filed in March in the U.S. District Court in Orlando, FL, in the Allstate v. Auto Glass America litigation. Trial briefs indicate to the court the arguments the parties plan to set forth in litigation and serve as preview of the factual and legal issues that will be argued at the federal trial, scheduled to commence Nov. 1. Allstate Insurance Company, Allstate Fire and Casualty Insurance Company and Allstate Property and Casualty (Allstate) v. Auto Glass America, LLC, and its owner Charles Isaly (AGA) was filed in December 2018, with the plaintiffs, Allstate, alleging the defendant, AGA, had engaged in a plan to unlawfully obtain payment for excessive and/or unreasonable charges by submitting inflated invoices which the insurer paid at a reduced rate—a practice known as short-rating. Allstate also alleged AGA would then sue them when it paid less than the invoice amount. AGA later filed a counterclaim against Allstate.
In its trial brief, AGA denies the allegations and claims Allstate is not entitled to refund or monetary damages even if AGA and Isaly committed the alleged acts. AGA states one of Allstate’s claims under the Florida Deceptive and Unfair Trade Practices Act (FDUPTA) is based on an alleged violation of Florida’s Home Solicitation Act (FHSSA), which does not include a private right of action, never mind a right of action by an insurance company. AGA states Allstate’s other claims under FDUPTA are based on facts that cannot be proven at trial or that “Allstate simply has no basis or theory to provide legal causation and actual damages.” Regarding Allstate’s claims that AGA neither received a fully compliant Assignment of Benefits from its Allstate insured customers or never received one at all, AGA says Allstate cannot raise or invoke Assignment of Benefits issues because Allstate is not a party to any assignment, which is a contract between AGA and its customers. AGA says despite Allstate’s
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allegations, a written assignment is not required. “Facts of the case indisputably establish that each customer understood that they would receive a new windshield in exchange for a broken one for no charge and AGA would collect any amounts owed under the insurance policy from Allstate,” submitted AGA. AGA also argues Allstate cannot prove any individual alleged deceptive or unfair act caused Allstate actual damages under a FDUPTA causation analysis. Additionally, it is argued Allstate is neither a “buyer” nor a “seller” under the FHSSA or the Federal Trade Commission Rule and thus cannot claim damages. Finally, AGA argues Allstate cannot maintain its unjust enrichment claims enumerated in the lawsuit because a statutory violation necessitates a claim to be “non-reimbursable” and there is no argument AGA should be compensated nothing for providing the insured customers with their new windshields. We thank glassBYTEs.com for reprint permission.
AkzoNobel on May 4 announced the launch of its new Acoat Selected digital training platform containing business services content relevant to end-user customers. This training content was previously only available to Sikkens customers through faceto-face instruction by a services consultant at the customer location. The digital platform is now also available to AkzoNobel’s Lesonal customers. The digital training platform contains seven content categories, most relevant to collision repair shop owners/managers and production managers, including process improvement, human resources, marketing, technical, sales, finance and more. The training fulfills I-CAR continuing education credit requirements and is free of charge for AkzoNobel’s Sikkens and Lesonal customers. Access it at www.AkzoNobelTraining.com. Source: AkzoNobel
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Giles County, TN, Auto Body Shop Owner Remembered as Authorities Investigate Possible Homicide and Spring Hill communities,” The Well Outreach shared in a Facebook Giles County, TN, business owner post. “He was known to be giving James “Jim” Grimes, 62, is being in heart and hand plus wisdom and mourned as authorities continue to effort. Even in his last few hours, he investigate his death as a homicide. was giving of himself, while attend The Giles County Sheriff’s De- ing a Well board meeting. His quiet partment confirmed officers were wit always made us laugh and his dispatched to the scene of a resi- wisdom and leadership played such a big part in helping guide dence at the 6000 block The Well and our efforts.” of Buford Station Road Grimes served twice on in Lynnville, TN, where the board of the Spring Grimes was shot and killed Hill Chamber of ComApril 19. Grimes was the ownmerce, holding the posier of Auto Body Advantage tion of chairman in 2012. collision repair shops in both “Jim Grimes was a true Spring Hill and Thompson’s Jim Grimes. Credit: gentleman that showed Station. File photo/The Daily genuine kindness to ev He was a well-reeryone he met, which Herald made him highly respectspected businessman and involved in helping the communi- ed in the community,” said Rebecty, local business leaders say. ca Melton, executive director of the Grimes had attended a board Spring Hill Chamber of Commerce. meeting at The Well Outreach, a “He was a trusted advisor and smart Spring Hill food pantry, just hours businessman. He generously gave before he was killed. He serves his time and resources to numerous as one of the organization’s board nonprofit organizations, individuals members. in need and rising entrepreneurs.” “Jim was a leader of business He most recently served on the and giving in our Thompson Station political affairs and human resourcby Mike Christen, The Daily Herald
es committees with the chamber. “When he spoke, everyone leaned in to listen,” Melton said. “His humble leadership often kept him out of the spotlight, but his im-
out. There are some things we are looking into that we can’t talk about right now. Our goal is to get this thing solved and bring the murder to justice.”
“Jim was a leader of business and giving in our Thompson Station and Spring Hill communities,”— Rebecca Melton pact will outlast our generation. We will continue to keep his family and his Autobody Advantage family in our prayers.” Tennessee Bureau of Investigation is assisting the local sheriff’s department in the investigation, TBI Public Information Officer Susan Niland confirmed. Investigators with the Giles County Sheriff’s Department confirmed the agency is investigating Grimes’ death as a homicide and the department is actively pursuing leads. “It is still ongoing,” Sheriff Kyle Helton told The Daily Herald. “We are at a point where there is not much information we can give
A suspect has not been named in the case. Deputies responded to the scene at 9:39 p.m. April 19 where Grimes was found deceased. The agency confirmed Grime’s spouse contacted the authorities. A celebration of life ceremony was to be held in memory of Grimes on April 25 at The Venue at Birchwood, 4749 Kedron Road in Spring Hill. Anyone with information is encouraged to contact the Giles County Sheriff’s Department at 931-3633505, or the Tennessee Bureau of Investigation at 1-800-TBI-FIND. We thank The Daily Herald for reprint permission.
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ASE Offers Free Training The ASE Education Foundation has partnered with several auto care industry companies and organizations to offer free e-learning and online training resources for its auto, truck and collision instructors and students. Several car manufacturers and auto parts suppliers have provided free access to training and online educational resources. In addition, some of the top training providers in the industry are offering access to online classes and resources. Most recently, CARQUEST Technical Institute (CTI) and WORLDPAC Training Institute (WTI) made available unlimited access to their virtual classrooms so that career and technical instructors can share the information with their students, and ASE itself is providing free access to its Introduction to Automotive Service e-learning program to all students in ASE-accredited programs. Visit https://www.aseeducationfoundation.org/elearning. Source: ASE
Two Responses to COVID others took advantage of local opportunities to continue growing their footprint. In short, the additional competition for quality MSOs has kept buying interest and valuations high despite the pandemic. People ask us what we are paying most attention to in the industry 1. OE requirements and certifications. OEMs are increasingly recognizing that access to technologically complex parts and certifications gives them more ways to improve their OE parts sales and margins. A $4,500 headlight with a patented sensor included is a not-so-subtle way to insure parts profitability. 2. Consolidation―discussed above. We expect the acceleration of consolidation to continue. 3. Diversification. Caliber is now emphasizing its diversification into glass, service and ADAS work. LKQ
has added ADAS services to its offerings and is buying up smaller ADAS firms. LKQ now claims with the acquisition of the Elitek subsidiary, it’s the largest U.S. provider. Many regional operators are creating their own ADAS companies as well. 4. Changes in DRP networks. Painful reductions in the State Farm and USAA DRPs, GEICO shifts and Progressive expansions have really impacted both large and smaller MSOs. Replacing State Farm volumes with smaller DRPs cannot make up the difference. 5. Changes in insurance market share. When one considers the remarkable changes among auto insurers over the last 10 years, the most surprising and far-reaching impact is how the direct marketers―GEICO and Progressive―have grown their total market share. These two companies have grown from 16% to 27% of all premiums written in the U.S. in a decade. The top 10 insurers have grown to almost 75% of all vehicles insured. More and more clout is moving to fewer and fewer insurers.
What we expect to see for the rest of the year Miles driven: We think travel by car will come roaring back. People are so anxious to move around the country. They still can’t travel to Canada or Mexico very easily so expect summer travel in the U.S. to be up above 2019 levels. Many more transactions: With two active national consolidators, five super-regional MSOs and at least six private equity firms still looking for platforms, we expect to see many more transactions in 2021 and 2022. Much of the volume will be driven by the expansion plans of these acquirers. Some will be driven by potential tax rate increases both at the national and the state level. Many will be driven by retirements of operators. And sadly, many will be driven by the exits of struggling businesses. We thank Focus Advisors for reprint permission.
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Classic Collision, GEICO, NABC Donate Refurbished Vehicle to a Deserving Recipient Recently, a Griffin County, GA, charity received a vehicle it will deliver to a deserving recipient, thanks to Classic Collision and car donor GEICO, along with the National Auto Body Council Recycled Rides program. The presentation was held at the Classic Collision in Union City, GA. The Honorable Vince Williams, mayor of Union City, and Battalion Chief Dennis Moore from the local firefighters joined the ceremonies. Kaitlyn’s Promise is a nonprofit ministry that provides transitional services to women that have dealt with an addiction-related crisis. This is not a facility, but rather an assistance program helping women successfully re-establish and transition back into society after having successfully graduated from a faith-based recovery program. Their focus is to help ladies with a “hand up” as they begin their journey in transition. The charity received a 2017 Volkswagen Passat, donated by GEICO and refurbished by Classic
Collision in Union City, GA. The recipient is Jessie White, a young woman who has turned her life around through help from Kaitlyn’s Promise. In addition, Classic Collision’s vendor partners donated some $1,600 in gift cards for the presentation. NABC Recycled Rides is a unique program in which businesses representing all facets of the collision repair industry team up to repair and donate vehicles to individuals and families in need of reliable transportation. Since the inception of the NABC Recycled Rides program in 2007, members of the NABC have donated more than 2,600 vehicles valued at more than $36 million. Additional partners in the NABC Recycled Rides presentation include 1-800 Charity Cars, Ultimate Auto Glass, AutoNation Ford of Union City, PPG, Single Source, Enterprise Rent a Car, Nalley Wholesale Auto Parts, Kroger of Union City, Chick-Fil-A of Fairburn and LKQ. Source: NABC
Tennessee Storm Destroys Classic Car Dealership by Steven Symes, Motorious
A severe storm the night of April 28 decimated a classic car dealership, Lakeway Auto Sales, in Paris, TN. Henry County authorities put residents under tornado warnings, but no twisters were reported. The carnage from the storm could’ve been far worse; however, it looks like the classic cars bore the brunt of the destruction. The devastation captured by a local news crew looks awful, including a Chevy Tri-Five buried under debris which used to be the dealership structure. The rear passenger-side corner of a Corvette can be seen just beyond the TriFive. Another photo shows a Chevy truck partially buried by debris from the dealership, which looks to no longer be standing at all. It’s not clear how much damage has been done to any of the cars since all the photos were taken at night and from a distance. According to local officials, the entire Lakeway Auto Sales
dealership was destroyed by the storm. Sadly, three homes were also destroyed. More than 40 homes and 10 mobile homes in the area were also damaged, some by falling trees. However, nobody was seriously injured in the chaos. While it’s always sad to see such devastation done to classic cars of any kind, even worse is the fact someone’s business and livelihood, for them and their employees, has been destroyed. Hopefully the insurance covers most if not all of the damage, but while rebuilding the dealership might face an uncertain future. This should be a stark reminder to everyone to double-check the insurance on their collectible cars, whether they’re classics or more modern. Disaster can strike at any time, so it’s good to be fully prepared. Also, it doesn’t hurt to ensure you have a good fire-suppression system in place in your garage and workshop, along with other safety measures. We thank Motorious for reprint permission.
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FordDirect Picks Platform Provider Dealer Inspire (DI), a Cars.com Inc. company that provides technology and digital advertising solutions to the automotive industry, announced it was selected by FordDirect as a preferred website and technology platform provider for its approximately 3,000 local U.S. dealerships. Dealer Inspire empowers local dealers with one endto-end platform that seamlessly drives more customers from search to signature, more efficiently. Designed to convert traffic directly from its highly-targeted digital advertising campaigns, DI’s modern website experience helps shoppers find the right vehicle in seconds and then connect with the dealership team in real-time using built-in chat and retailing technologies to start and even complete the buying process online. For more information about DI’s offerings for Ford, visit www. dealerinspire.com/ford. Ford dealers interested in partnering with DI can call (877) 899-8346 or email firstname.lastname@example.org. Source: Dealer Inspire
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Floridian Sentenced and the 2020 Lamborghini Huracan that Hines purchased for approximately $318,000. The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized more than $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding. The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of
1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses. The FDIC-OIG, U.S. Postal Inspection Service, IRS-CI, SBA-OIG and the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection OIG investigated the case. Trial Attorney Emily Scruggs of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael Berger of the Southern District of Florida prosecuted the case. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture. The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the CARES Act passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash
proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF web complaint form at https://www.justice.gov/ disaster-fraud/ncdf-disaster-complaint-form Source: U.S. Dept. of Justice
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Auto Care Association Applauds FTC Report on Anti-Competitive Repair Restrictions by Camille Sheehan, Auto Care Association
The Auto Care Association on May 7 applauded a report issued by the Federal Trade Commission (FTC), “Nixing the Fix: An FTC Report to Congress on Repair Restrictions.” The report found “there is scant evidence to support manufacturer justifications for repair restriction” and stated the FTC “stands ready to work with lawmakers, either at the state or federal level, to ensure that consumers have choices when they need to repair products that they purchase and own.” “We are pleased that the commission listened to the testimony from our association, as well as the other groups, during the 2019 ‘Nix the Fix’ hearing and took into consideration the information that we
submitted to the agency over many years,” said Bill Hanvey, president and CEO, Auto Care Association. “The Auto Care Association is proud of its efforts to secure right to repair legislation both on a state and federal level and we hope that this report will be the beginning of increased efforts by the commission to join us in addressing the anti-competitive actions of vehicle manufacturers,” Hanvey added. “We fully support the FTC’s efforts in ensuring that consumers continue to have choices on where they have their vehicle repaired.” Visit autocare.org/government-relations to learn more about the Auto Care Association’s right to repair initiatives.
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Uninsured Drivers Mississippi were driving uninsured. That was up from 23.7% in 2015, which doesn’t bode well, given the
The Insurance Research Council issued a report this year showing the rate of uninsured drivers ranges from a low of 3.1% of drivers in New Jersey to a high of 29.4% in Mississippi
state implemented an insurance verification system for traffic stops in 2017 and further toughened penalties for driving uninsured in 2018. Tennessee similarly launched an insurance verification system in
regulators earlier this year said they expected that had dropped still further, to 10% or less by 2019. But the IRC report pegs the number as actually having risen to 19.5% that year. North Dakota also saw a big
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spike in uninsured motorists, from 6.8% in 2015 to 13% in 2019. Idaho last summer implemented increased efforts to crack down on uninsured drivers, which comprised about 8.2% of the state’s drivers in 2015, but jumped to 13.2% by 2019. Arkansas also began cracking down on uninsured drivers last year. A new law that went into effect in January 2020 requires a state agency to notify residents whose registered vehicles appear to lack insurance that they have been fined $100 for the lapse. If they don’t provide proof of insurance within 30 days, their vehicle registration can be suspended. By the end of last August, the state had mailed 179,126 such letters to Arkansas drivers. The state hopes to reduce its rate of uninsured drivers, which stood at 19.3% in 2019, according to the IRC. Two large states did see significant declines from 2015 to 2019 in uninsured driving. Florida fell from having 26.7% of drivers uninsured in 2015―the highest in the nation― to 20.4% in 2019, and Texas cut its rate nearly in half, from 14.1% in 2015 to just 8.3% in 2019.
Most, Least Expensive Cars to Insure Named Insure.com, a comprehensive resource for insurance information, released its 12th annual ranking of the most and least expensive new vehicles to insure. The new report, ranking the most expensive and cheapest cars to insure for 2021, finds the Chrysler Voyager minivan peeling into first place this year, with the lowest national average insurance premium of $1,272 annually. The top five least expensive new cars to insure in 2021 are the Chrysler Voyager L, average price $1,272; Honda CR-V LX, $1,285; Mazda CX-3 Sport, $1,294; Fiat 500X Trekking, $1,301; and Honda HR-V LX, $1,322. This year’s five most expensive new cars to insure are the Maserati Quattroporte S GranSport, average price $4,823; Maserati Ghibli S Q4 GranSport, $4,208; Tesla Model S Performance (Plaid), $4,143; Tesla Model X Performance (Plaid), $4,025; and BMW M760i xDrive, $3,914. Source: Insure.com
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Ford Reports 1Q Net Income of $3.3B, Best in a Decade First-quarter operating improvements around the globe, customer receptivity to new products and Ford’s skillful management of the effects from a worldwide semiconductor shortage contributed to one of its strongest operating performances in years. “Our team is relentlessly executing our plan to turn around our automotive business so that we can create and deliver the high-value, always-on experience that our Ford and Lincoln customers deserve,” said Jim Farley, Ford’s president and CEO. “There’s no question we’re becoming a stronger, more resilient company.” Ford’s first-quarter revenue increased to $36.2 billion, producing net income of $3.3 billion, its best since 2011, and record adjusted EBIT of $4.8 billion. Quarterly adjusted EBIT (earnings before interest and taxes) of $4.8 billion included a noncash gain of $902 million on Ford’s investment in Rivian. The gain, from Rivian’s Series F funding round in January, was factored into 2021 guidance Ford provided in early February. Adjusted EBIT additionally benefited from robust customer demand for the company’s new products, tight vehicle inventories and favorable year-over-year cost performance. The strength of Ford’s first-quarter results was geographically broadbased, with automotive EBIT outside North America totaling $454 million, compared with a loss of $526 million last year. Reported first-quarter cash flow from operations was $4.5 billion. Despite the strong quarterly adjusted EBIT, adjusted free cash flow was negative $396 million, primarily reflecting the temporary effects of adverse timing differences and higher inventory as a result of the global semiconductor shortage. Ford CFO John Lawler said semiconductor availability, which was exacerbated by a fire at a supplier plant in Japan in March, will get worse before it gets better. Currently, the company believes the issue will bottom out during the second quarter, with improvement through the remainder of the year. In the meantime, he said the company’s attention is on managing the supply chain around the clock,
every day, and enhancing execution in Ford’s underlying business. As examples of the latter, he pointed to recent high-quality launches of the Mustang Mach-E SUV, all-new 2021 F-150 pickup and Bronco Sport SUV. First-quarter warranty costs improved by more than $400 million from a year ago. “Seeing our people transforming Ford at the same time they’re navigating the effects of a global pandemic and serious supply chain issuesis impressive and gratifying,” said Lawler. “We’re changing the trajectory of our earnings power and our ability to invest in customer experience and growth.” Customers appear to be noticing. Data intelligence company Morning Consult reported Ford among the companies in U.S. gaining consumer trust. The improvement was attributed chiefly to Ford engineering, producing and distributing millions of pieces of equipment to help protect communities amid the COVID-19 pandemic. Ford’s first-quarter revenue in North America increased 5% to $23 billion, benefiting from strong customer demand for Mustang Mach-E, the all-new 2021 F-150 and Bronco Sport and tight vehicle inventories related to semiconductor-related production declines. SUVs and pickups both accounted for increased shares of regional sales. EBIT rose to $2.9 billion. The semiconductor shortage has prompted Ford to accelerate modernization of its sales processes―incorporating new ordering capabilities to make them more appealing to customers, raise inventory turn rates, and reduce and maintain inventories below traditional levels. Mustang Mach-E illustrates the related potential: 70% of customers who purchased the batteryelectric SUV are new to Ford. So far, twothirds of reservations for the all-electric SUV have been converted to orders. Further enhancements to the online shopping process―developed in collaboration with dealers―went live in March. The reservations-to-orders rate is similar for the reimagined, all-new Bronco, sales of which are expected to start this summer. Ford is also making good on its
20 JUNE 2021 AUTOBODY NEWS / autobodynews.com
commitment to lead the electrification revolution in transportation. In addition to bringing more electrified vehicles to market, the company announced formation of a new global battery center of excellence, Ford Ion Park, to accelerate researchand development of battery and battery-cell technology and include future battery manufacturing. Lawler said Ford was among the first automakers to identify the potential for a 10% to 20% adverse effect on manufacturing volumes from increasing constraints on global semiconductor supplies entering 2021. In early February, the company said the risk had the potential to reduce Ford’s full-year adjusted EBIT by $1 billion to $2.5 billion. Ford has updated its 2021 outlook to account for expanded consequences from the semiconductor shortage, made worse by the recent supplier fire in Japan. While the issue is a significant headwind to the company, Lawler said Ford is taking definitive actions to address a range of possible outcomes.
Largely because of the additional effect of the supplier fire, Ford now expects to lose about 50% of its planned second-quarter production, up from 17% in the first quarter―again, implying Q2 will be the trough of the issue. Ford anticipates the flow of semiconductors from the Japan supplier to resume by the end of the second quarter―but, like many others in the industry, that the broader global semiconductor shortage may not be fully resolved until 2022. The company now assumes it will lose 10% of planned second-half 2021 production. All told, Ford now expects to lose about 1.1 million units of production this year to the semiconductor shortage. Accordingly, the company anticipates full-year 2021 adjusted EBIT to be between $5.5 billion and $6.5 billion, including an adverse effect of about $2.5 billion from the semiconductor issue. Adjusted free cash flow for the full year is projected to be $500 million to $1.5 billion. Source: Ford
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Historic Recovery possibility of future lockdowns, vaccine distribution concerns and the nation’s understanding of the COVID-19 virus will have the greatest effect on the strength of the rebound. Interest rates are similarly projected to remain near zero until mid2024, when the Federal Reserve will slowly begin reversing the rate cuts made during the COVID-19 recession. The Fed’s delay to increase interest rates will help fuel investment growth once the pandemic subsides. “This is all uncharted territory for monetary policy,” Snaith says. “Washington D.C. has been focused on politics more so than the economy and there is no previous play-
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book on how best to carry policy forward.” For the complete U.S. report from the Institute for Economic Forecasting, visit business.ucf.edu/ centers-institutes/institute-economic-forecasting. The Institute for Economic Forecasting strives to provide complete, accurate and timely national, state and regional forecasts and economic analyses. Snaith is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate. We thank UCF Today for reprint permission.
Mitchell 1 Expands ADAS Coverage
Subaru Announces Electric SUV
Mitchell 1 announced May 11 it now offers the Driver Assist ADAS QuickLink feature across its suite of repair information software, expanding coverage to most makes and models of cars, light trucks and commercial trucks. The unique QuickLink dashboard view is available in both ProDemand automotive repair information and TruckSeries commercial truck repair information. The feature is exclusive to Mitchell 1 and delivers immediate access to a table presenting a consolidated overview of ADAS-related components, including whether the components of an ADAS feature will require calibration or special tools like targets or a scan tool to complete the job. Unlike cars and light trucks, with Class 4-8 commercial trucks the manufacturer of the ADAS component for a particular vehicle is not always known. TruckSeries provides that detail with the component name when needed or when it is known. Source: Mitchell 1
Subaru of America, Inc. on May 11 announced it will name its new full-electric SUV Solterra. Designed as a joint venture between Subaru and Toyota, the Solterra features a new, dedicated all-electric platform, the e-SUBARU Global Platform. The joint venture combines Subaru’s expertise in all-wheel drive technology with Toyota’s vehicle electrification technology. To create the all-new e-SUBARU Global Platform, Subaru engineers worked to bring together the brand’s allwheel drive capability, superior driving dynamics and world leading passive safety in a versatile, dedicated EV platform. The result is a technologically advanced full-electric SUV that is also a truly capable and durable Subaru SUV. Visit https://www.subaru. com/solterra-ev to learn more. Source: Subaru
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Vehicle Trade-In Values Climb to All-Time Record High in March: Edmunds The car shopping experts at Edmunds say vehicle owners might be pleasantly surprised if they take a moment to check how much their car is worth right now. According to Edmunds data, the average value for all used vehicles traded in during the month of March hit an all-time high, climbing to $17,080, compared to $14,160 a year ago. Edmunds analysts say demand is soaring for used vehicles as chipset shortages continue to severely constrain the supply of new vehicles in the market: New vehicle inventory on sale at dealerships nationwide is down by 36% in March 2021 compared to a year ago. According to Edmunds data, trucks retain the greatest value and command the highest trade-in prices of all consumer vehicles in the market right now. Edmunds analysts took a look at all 2018 model year vehicles traded in during March and determined their respective retained values by comparing the average trade-in price of each model against its average original MSRP. Ford F-250 Super Duty, GMC
Sierra 2500 Heavy Duty and F-350 Super Duty all tied for the No. 1 spot on the list, retaining 80% of their value on average. “The chipset shortage is wreaking havoc on new vehicle production, but we’re also seeing surprisingly healthy car shopper demand, which has likely grown stronger in light of vaccines rolling out quicker than anticipated,” said Jessica Caldwell, Edmunds’ executive director of insights. “These two factors combined are disrupting the market in a way we haven’t ever really seen before.” Edmunds analysts say that consumers who might have typically been new-car shoppers are increasingly turning to the used market in search of more alternatives and better value. Traffic to the Edmunds website’s used vehicle inventory pages jumped approximately 300% in March compared to a year ago. “It seems impossible, with the pandemic still raging in many parts of the country, that new vehicle sales could be at the highest March level in more than two decades, but here we are,” said Caldwell. “Until
automakers can start cranking out new vehicles again, we’re going to see increased demand and higher trade-in values for used vehicles as well.” Edmunds experts note a positive trend emerging as a result of rising trade-in values: Fewer consumers are upside down on their car loans, and those who are upside down owe less. According to Edmunds data, 30% of all vehicle trade-ins during March had negative equity, compared to 40% last March. The average amount owed by consumers who were upside down on their car loan was $4,583 in March, compared to $5,405 a year ago. “If you were upside down on your car loan a few months ago, there’s a decent chance that you could be in the black today,” said Ivan Drury, Edmunds’ senior manager of insights. “Consumers who own a vehicle and are thinking of making a new car purchase in the near future should consider pulling the trigger now. The inventory situation isn’t going to get any better any time soon, and you could essentially
be wiping away multiple car payments with the added value of your trade-in.” To help car shoppers who are looking to take advantage of this seller’s market, Edmunds experts advise getting a vehicle appraisal, which can be done online or in person at your local dealership. Or you can get an instant cash offer for your vehicle from a site such as Edmunds. If you’re currently leasing a vehicle, you have options as well; Edmunds experts outline them here. “Many consumers believe the old adage that you lose half the value of your vehicle when you drive off the lot, but that is simply far from the truth today. In fact, we’re seeing many vehicles hold a huge amount of value multiple years into ownership,” said Drury. “Every car owner out there should take a minute to check how much they can get for their vehicle, no matter the age or mileage or condition that it’s in. You could have extra money sitting in your driveway and not even know it.” Source: Edmunds
Tesla and Its Peers Proving EVs Inherently Safer than Combustion Cars Mustang Mach-E were able to secure high rankings in the IIHS’ An analysis of insurance data in stringent safety tests, with the forthe U.S. has shown injury claims mer receiving a Top Safety Pick+ are notably less common among award and the latter receiving a all-electric vehicles like the Tesla lower but still impressive Top SafeModel 3 and its peers. ty Pick rating. The findings were shared by Other all-electric vehicles, most the Insurance Institute for Highway notably the Tesla Model 3, the Audi Safety (IIHS) in a recent report, e-tron and the Audi e-tron Sportback, have qualified for the 2021 Top Safety Pick+ award. The release of the XC40 Recharge and Mach-E’s stay ratings coincided with a recent study of insurance losses for electric vehicles by the IIHS-affiliated Highway Loss Data Institute. The study looked at electric and conventional versions of nine vehicles produced from 2011 and 2019, and it examined colTesla Model 3 undergoes crash tests with the IIHS. lision, property damage Credit: IIHS liability and injury claims. which followed the release of its As per the study’s findings, safety ratings for the 2021 Volvo the rates of injury claims related to XC40 Recharge and the Ford Mus- drivers and passengers of electric vehicles were more than 40% lower tang Mach-E. The XC40 Recharge and the compared to their internal combusby Simon Alvarez, Teslarati
22 JUNE 2021 AUTOBODY NEWS / autobodynews.com
tion-powered counterparts between 2011 and 2019. The IIHS notes these results were similar to the findings of an earlier study from the Highway Loss Data Institute (HLDI) that focused on hybrid cars, which pointed out the lower injury rates may be due to the weight of the vehicles’ batteries. As per the HLDI, the large batteries used in hybrids make vehicles substantially heavier than conventional cars. Occupants of heavier vehicles are exposed to lower forces in multi-vehicle crashes. Matt Moore, HLDI vice president, explained these findings in a statement. “Weight is a big factor. Hybrids on average are 10% heavier than their standard counterparts. This extra mass gives them an advantage in crashes that their conventional twins don’t have,” he said. This weight advantage is even more notable in all-electric cars like the Tesla Model 3, on account of their substantially larger battery packs. This was true for the XC40 Recharge, which features a curb weight of 4,787 lbs., significantly
heavier than the 3,811 lbs. of its combustion-powered counterpart. Even the Mach-E, an all-electric model, is hefty at 4,516 lbs. IIHS President David Harkey is optimistic about the study’s findings. In a statement, he noted the study further proves all-electric cars are as safe or even safer than conventional vehicles. This means a transition to sustainable vehicles would likely not require as many compromises on the part of consumers. “It’s fantastic to see more proof that these vehicles are as safe as or safer than gasoline- and diesel-powered cars. We can now say with confidence that making the U.S. fleet more environmentally friendly doesn’t require any compromises in terms of safety,” he said. We thank Teslarati for reprint permission.
autobodynews.com / JUNE 2021 AUTOBODY NEWS 23
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From the Desk of Mike Anderson with Mike Anderson
Mike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.
Collision Repair Industry Has a New Voice on OEM Safety Inspections One of the issues I have written and spoken about most passionately recently―including being quoted in an article on the front page of Autobody News in April―is my belief the post-collision safety inspections called for by most automakers are the single biggest friction point in the collision repair industry right now.
touch with some of the OEMs to have a direct dialogue to better understand this issue. It was an insurer seeking to do the right thing. So I want to give a shout-out to that insurer―even though I can’t identify them here―and to the OEMs that agreed to speak with that company. I want to give a shout-out to FCA, now part of Stellantis, for
I-CAR has posted a brief form shops can use to submit information on the safety inspections they perform, what triggered the inspections and what was found
We see shops looking to do the right thing, but getting pushback from third-party payers. This is why I want to give a shout-out to the team at I-CAR. They recently held a virtual summit in regards to automaker safety inspections as the start of some dialogue about what some OEMs require, when those inspections are needed, what outcomes they produce and what they can prevent. I-CAR invited participants from all industry stakeholders―OEMs, insurers and collision repairers― and about 150 people participated. This is important because it’s only when we start talking about these issues that we can work toward resolution while ensuring the vehicle owner gets a complete and safe repair. It would have been unrealistic to go into that virtual summit expecting a solution would come out of just one meeting. But I’m encouraged by what I’ve seen happening since that time. I had one specific insurer, for example, ask me to put them in
publishing an updated statement this spring to provide more clarity in regard to steering columns after a collision. The automaker also held a webinar for its certified collision repair shops to give those collision professionals a chance to hear from the automaker’s technical experts and get more information about safety inspections. Thank you to the team at FCA. They heard the voice of the industry, and said, “Let’s engage in some dialogue on this.” There’s another automaker that, depending on when you are reading this, has announced, or will soon, a new matrix and parameters for the safety inspections on its vehicles, to narrow down which are required under which circumstances. But there’s another thing that resulted from that I-CAR summit, and this is where I’m issuing a call to action to you. I-CAR wants to continue to move this issue forward with all stakeholders, but needs more data to do so. So I-CAR has posted a brief form** shops can use to submit information on the safety
26 JUNE 2021 AUTOBODY NEWS / autobodynews.com
inspections they perform, what triggered the inspections, and what was found. You find that form at https:// rts.i-car.com/srs-inspection-feed back-form I strongly encourage you to take action and regularly submit information to I-CAR. When the OEM procedures for a vehicle you are repairing call for a seat belt inspection, or call for R&I for inspection of an airbag sensor or module, or require you to measure the steering column or to R&I the dash to check the support brace, submit those examples to I-CAR. Whether those inspections reveal damage or not, submit that to I-CAR. Those of you who know me know I always seem to have a new saying or expression I recite regularly. My current one is this: There are people in life who WATCH stuff
happen, and there are people in life who MAKE stuff happen. I’m choosing to be someone who makes stuff happen. And that’s what I want to invite you to do. Don’t sit on the sidelines and complain about these issues. Let your voice be heard. My biggest concern is that I-CAR, in an effort to move this issue forward, sets up this data collection, but nobody submits any examples. They’re going to say: This isn’t an issue. But it is an issue, an important issue. But if we don’t submit anything to I-CAR so they can see it is, then shame on us. We have an avenue to have a voice, a way to have our voice heard. So I strongly encourage you to use it. This is the only way to further the dialogue to find a solution that works for everyone. As I also often say: Don’t delay; do it today.
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Regulator Stresses Need for Documented Collision Repair Customer Authorization, Updates by John Yoswick
Though the California Bureau of Automotive Repair (BAR) www. bar.ca.gov does not have jurisdiction over auto body shops beyond the more than 4,000 in the Golden State, some information shared by BAR Chief Patrick Dorais in a recent webinar could be instructive to shops elsewhere as well. Dorais said his agency, which also oversees about 31,000 dealerships, mechanical shops and smog check stations, receives about 17,000 consumer complaints a year―though not surprisingly, many fewer this past year during the pandemic. Generally only about 1,000 of those involve body shops, Dorais said. “In about a third of those complaints in the auto body area, consumers are alleging either that the shop made false or misleading statements, or they failed to obtain the customer’s authorization,” he said. “Consumers are commonly reporting to us that they feel misled about the length of time for the repairs, and not having
any understanding of what was being done to their vehicles. Those are the kinds of things we commonly see in our complaints.” Though few states have a regulatory body like the BAR overseeing the industry, most have consumer protection laws requiring customer authorization for repairs, so ensuring such authorizations are well documented could reduce―or at least counter― many consumer complaints. The BAR’s “Write It Right” guide (https://www.bar.ca.gov/pdf/ WriteItRight.pdf) for shops was updated two years ago to indicate electronic authorization is permitted, even offering a screenshot of what a text authorization should look like. Status updates sent to customers via email or text can also provide good documentation―provided they are saved by the shop―to counter many consumer complaints. “We may come to you, saying the customer is saying this, here’s what they’re alleging,” Dorais said during the webinar. “As a shop owner or manager, you can say, ‘No, we’ve
got something that tells a different story, and here’s my proof.’ That’s really important to preserve that document.” Those outside California might also take note of the BAR’s prohibition on page 7 of the “Write It Right” document on the use of such part descriptions. “Each new replacement crash part listed in an autobody or collision repair estimate must be an OEM crash part unless specifically identified as a non-OEM aftermarket crash part,” the document dictates. “Descriptors like Opt-OEM, Alt-OEM, OEM-Surplus, Like Kind Quality, Quality Replacement Part and similar designations do not satisfy this requirement.” The ambiguity of those parts descriptions are something a Collision Industry Conference (CIC) committee has been working to address. During CIC in mid-2020, the committee showed how the list of parts categories varies among parts platforms and estimating systems. The committee showed several flowcharts demonstrating how all these variations in
parts categories can result in the exact same part being described two different ways on estimates. In one example, a vendor selling OEM parts outside of the authorized OEM channel enters those parts into a platform that uses the “OEM Surplus” category for such parts. That platform feeds into an estimating system that uses the “Optional OEM” label for those parts. That runs up against the BAR’s prohibition on the use of the “Opt-OEM” label. “So while that part can go into the estimating platform as ‘OptOEM,’ the end-user is required to choose what they are going to call it on the estimate,” said Aaron Schulenburg of the Society of Collision Repair Specialists, who co-chairs the CIC committee. “You then have a situation where a shop repair plan, and an insurance company estimate, may each potentially choose different nomenclature for the exact same part. One may identify that as an aftermarket part, and one may identify it as an OEM part, and you have an estimating platform that allows for that choice.”
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Collision Repair Industry Veteran and Author Gary Ledoux Writes into the Sunset can get old quickly. “One of my uncles had a great If you’ve been in the collision repair career, but he didn’t know what to industry in any capacity within the do when he retired,” he said. “He last decade or so, you likely know ended up watching television 24/7 who Gary Ledoux is. and died at 78 without really enjoy He wrote for Autobody News ing his retirement. I decided that that for several years, is the author of wasn’t going to happen to me.” five different books, including one Ledoux took business and voabout the history of collision repair cational classes in high school, then in America, and played an integral spent some time at NH Voc-Tech role at American Honda when it de- College. He landed a series of jobs at veloped its ProFirst Body Shop Cer- various local parts jobbers, PBE jobtification program in 2010. bers and car dealerships. He worked Now semi-retired at age 68 and the parts departments at Toyota, Alfa living in Jacksonville, FL, Ledoux is Romeo, Subaru and Acura stores, as currently working on a book about well as selling new vehicles at one the history of his hometown fire Ford dealer and working as a service department, with a working title of advisor at another. “Nashua’s Bravest: The History of In 1973, Ledoux tried to become a firefighter in his hometown Firefighting in Nashua, NH.” of Nashua, but he didn’t meet the physical requirements. He was too short― even after “fudging my application a little,” he said. One year later, he relocated to Amherst, NH, where, being all-volunteer, the fire department’s physical requirements weren’t so critical. Ledoux was accepted and served as a volunteer firefighter for the next four Gary Ledoux, author of “YesterWreck: The History of the years. Collision Repair Industry in America,” is enjoying his retirement after working for Honda for three decades Like firefighters everywhere, volunteers can be In 2018, Ledoux published his called out at any time of the day or fifth book, “YesterWreck: The His- night. “Being a volunteer company, the tory of the Collision Repair Industry in America,” an 860-page book that fire station was not manned. When has been getting positive reviews the alarm sounded, you ran to the from people throughout the indus- station, grabbed a truck and went,” try. Four previous books centered on Ledoux said. “One time, there was Old West history. a house on fire right across the road Ledoux has embraced the ste- from the firehouse, less than 20 yards reotypical retirement plan, purchas- away. By the time a police officer on ing a 37-ft. Itasca motorhome that night patrol noticed it, notified the already has 25,000 miles on it. He’s fire department and we responded, driven from Palm Springs to north- the house was fully involved. We ern California, across the U.S. from managed to save the cellar hole. It California to Florida and from Key was rather embarrassing, but someWest to New Hampshire, and has times that’s just how it works.” In 1988, Ledoux landed a posibig plans to see more of the country firsthand within the next few years. tion at American Honda as a district Ledoux’s No. 1 goal in retire- parts aanager for the Acura diviment is to be active and pursue his sion, first for the northeastern U.S. creative passions, such as writing and later for the southeastern U.S. and travel. He has learned by exam- He worked for American Honda in ple that if you don’t proactively pur- varying capacities for more than 29 sue a productive retirement, things years. by Ed Attanasio
28 JUNE 2021 AUTOBODY NEWS / autobodynews.com
From 1998 to 2017, he was an assistant national manager for the wholesale parts marketing department, eventually concentrating on the collision repair industry. That’s when he met literally hundreds of body shop owners all over the country and developed a wide range of highly successful advertising/marketing promotions for Honda’s wholesale parts marketing department. In 2009, American Honda assembled a team to develop the company’s first OE body shop certification program. “There were about 12 of us and we did a complete year of research before we pulled the trigger on the program,” Ledoux said. “A lot of the OEs were featuring certification programs, so the clock was running. At first, it was called the Honda ProFirst Recognized Program, but we realized that we needed to have the word ‘certified’ in there, so, in time, we changed it to the Honda ProFirst Certified Body Shop Program. “It was great watching it grow and witnessing its success. When I retired from Honda in 2017, we had 1,200 shops in the program and now they have closer to 1,600. It works because shops value the certification and Honda owners respect it.” Why does the ProFirst Program―now called the Honda and Acura Certified Collision Program―work so well for shops that have invested heavily in specific tools, training and equipment to do proper repairs on Hondas and Acuras? “It benefits everybody and, in the end, it results in a quality, OE standard repair,” he said. “Back in the day, just having the right parts was enough but that doesn’t make it anymore, because today’s cars are so sophisticated and the technology is changing all the time.” Ledoux has been writing professionally since 1992, including five books, columns and feature articles in multiple Old West magazines, a running column in Motorcycle Industry and Power Equipment Trade magazines and a column and feature articles in Autobody News, and he was publisher and editor of the Honda ProFirst Quarterly Magazine.
A big part of Ledoux’s legacy includes his definitive history of the collision repair industry, “YesterWreck: The History of the Collision Repair Industry in America,” which he published in 2018. He saw a definite need for a book that chronicles the history of body shops, complete with a collection of 60 photographs used to tell the story. It was a labor of love that tested Ledoux, but he was proud of the finished product. “I found a ton of great stories and anecdotes from the early years of the industry, plus I spent countless hours poring over industry magazines going back as far as the early 1960s,” he said. “Historians take a lot of information and put it into a narrative that is accurate and entertaining, so that was my goal with ‘YesterWreck.’” In “Nashua’s Bravest: The History of Firefighting in Nashua, NH,” Ledoux is now writing about another one of his passions―fire departments and their colorful histories. “When I started asking around about the history of the Nashua Fire Department, I discovered that several people had documents that were partially written while others just had notes they collected over the years. But nobody knew how to turn it into a book,” Ledoux said. “I thought, I can take all of it and put it into a book that people would love to read, with the addition of my own research.” The book is slated to be published the first quarter of 2022. Just like in John Steinbeck’s “Travels with Charley,” Ledoux and his wife Rachel and their dogs, Snoop, Bridget, Bailey and Mindy, will be taking to the highways and byways of America. With his trusty laptop onboard, Ledoux and his family are poised and prepared to take on this new stage in their lives. As Gary would say, “Happy trails!”
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—John Yoswick is a freelance writer based in Portland, Oregon who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
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CIC Speakers Discuss Employment Issues Related to Vaccines, Fire-Related Concerns with EVs
California-based employment law that it would create an undue hardattorney Cory King told Collision ship, and that is defined as having Industry Conference (CIC) attend- more than a ‘de minimis’ cost or with Ed Attanasio ees in April that while employers burden on the employer,” an analycan require workers to get vaccinat- sis an employment lawyer can walk ed for COVID-19, they should make you through. sure they get legal guidance in do- Concerns about long-term efing so to avoid violating any state or fects of the vaccine or belief “it’s federal regulations. a government science experiment” “The short with answerEd is Attanasio yes, you cannot negate an employer mandate can [require vaccines], but as with because “fear is not a protected cateanything in the law, it’s not that sim- gory,” King said. “But before you force someple,” King said. King predicated his presenta- body to get vaccinated, or fire sometion by saying he can’t provide legal body because they refuse to get vacadvice in such a setting, but was of- cinated, I strongly encourage you to fering some issues business owners make the phone call to your attorwith Ed Attanasio would want to discuss with their le- ney,” he said. There are also privacy protecgal counsel. King said in most states, for ex- tion steps to take if an employer ample, employees must be paid for collects proof of vaccination from their time getting vaccinated if it’s employees. King was asked what an a job requirement. Some with Edemployers Attanasio employer should do if an employee have sought to reduce this cost by asks how many of their coworkers bringing in someone to do the vacci- are vaccinated. nations in-house, King said, but un- “I would recommend against der that scenario, employers must be [revealing] anything [related to that] careful to avoid violating the Amer- unless you have some local or state icans with Disabilities Act (ADA) regulation that says you need to,” King said. “Because that immedirelative to medical inquiries, with Staceygiven Phillips that pre-screening questions are re- ately starts the witch hunt: Who’s quired for those getting vaccinated. vaccinated? Who’s not? You argu “If they don’t want to answer ably could be viewed as disclosing. those questions, or they answer them It’s not worth the risk. I would not and are denied the opportunity to get go into that. I can’t give a specific answer without researching it to the vaccine because don’t pass withthey Stacey Phillips the pre-screening, you cannot ask make sure there’s nothing specific them why they did not get vaccinat- to [your] locality. But the general ed,” King said. “If you do, you are recommendation is I would not be arguably potentially running afoul disclosing anything like this.” of the ADA.” Employers also have to provide Equipment, Insurance Issues for EV with Stacey Phillips “a reasonable accommodation” for Repairs those not willing to be vaccinated A number of speakers at CIC disbecause of a religious or “sincerely cussed some of the fire-related safety held belief,” he said, but again, this precautions shops should take relais an area where a company should tive to regularly having electric veget legal advice. Don’t question the hicles―especially those with lithium sincerity of their belief or get into batteries―in the shop for repairs. with Stacey Phillips an argument over this, King said. “One thing is to call your [busiRather, acknowledge what they are ness] insurance company and find saying, tell them you will look into out how this may impact your preit and get legal advice. miums,” said Mark Quarto of Fu “You can make it through this, turetech, an electric vehicle training no question,” King said. “The way organization. “They probably will you would overcome that is to show have some ideas on other things
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you’ll need to do with your building.” David Willett with ProSight Specialty Insurance concurred. “It does take additional coverage, and it does take additional risk measures,” he said. “We get asked those questions from the knowledgeable [shops]. The scary ones are the ones that don’t ask those questions. The industry is woefully unprepared for this.” Quarto said it is also advisable to make sure “the fire marshal is alerted to what you’re doing in your building.” He said the National Fire Protective Association is currently “finalizing some requirements for where battery packs are to be stored, how far they need to be apart when they are stored when they are out of the vehicle.” Quarto was asked what body shops should look for in an electric
Media and Publicity for Shops Shop Strategies
vehicle charging station for their shop. He said most EVs will be compatible with any 220-volt charger that is SAE J 1772 compliant. “It’s considered to be a Level 2 charger,” he said, which can charge most vehicles in four or five hours, as compared to a 110-volt charger that will require two or three times that long. “There are some other options, fast-charging, but typically a shop isn’t going to need a fast charger. They’re very expensive. The J 1772 chargers are anywhere from $300 to $800, maybe $1,000.” It will require a dedicated 220volt circuit, he said. “Nothing else on there. Otherwise the charger will get tripped all the time,” Quarto said. Another speaker during the discussion of EVs at CIC mentioned shops may want a forklift to load or unload EV battery packs into or
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from delivery vehicles. Willett said forklifts are another item to discuss with your business insurer. “We haven’t had those in many shops, and for those in the collision repair industry thinking about having a forklift, there’s a lot of additional training and safety requirements,” he said. CIC Among First In-Person Meetings The discussion took place during the first of the quarterly CIC meetings held in-person since January of last year. Organizers said about 130 people attended the meeting in Phoenix―about half as many as is typical―but the meeting was open to “virtual attendees” as well. “We’ve been very anxious to get back to a live scenario,” CIC Chairman Darrell Amberson said at the conclusion of the first day of the two-day meeting. “We knew there were some risks with that. We knew that hardly anyone else in the industry is meeting live. But we also felt like somebody has to be the first to jump off the dock. I’ll say right now, the water feels pretty darn good. It’s been absolutely terrific.”
Hertz Posts Positive EBITDA in Q1 by Auto Rental News Staff
“This quarter we realized the first effects of the leisure travel rebound and capitalized on strong demand-driven pricing in destination markets that exceeded 2019 levels,” said Paul Stone, Hertz Global’s president and CEO in a May 7 statement announcing first quarter 2021 results. “We’re continuing to see improved demand and are optimistic about a sustained recovery.” It’s okay to call this an understatement, owing to what Hertz has been through over the last 12 months: a bankruptcy, the accidental burning of 3,500 rental cars, senior management turnover, de-listing from the New York Stock Exchange and a much-scrutinized Chapter 11 equity raise. Hertz’s Q1 global revenues are no surprise: Total revenues of $1.289 billion are down a staggering—but expected—39.5% compared to Q1 2020, the last “normal” quarter before the pandemic. Yet Hertz still managed positive adjusted corporate EBITDA of $2 million, compared with minus
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$243 million in the same quarter last year. In the U.S., Hertz’s largest market and the one experiencing the biggest rebound, Hertz pulled in adjusted EBITDA of $24 million. International dragged down the strong U.S. performance, as Europe and South America are still under the pandemic’s grip. That said, Hertz saw gains in international adjusted EBITDA over the previous year’s quarter. Hertz’s performance is a testament to the ability of the car rental industry to engage in cost-cutting measures that other travel sectors can’t as easily. Certainly, being able to sell into the stratospherically high used car market is a primary factor in this recovery. Airlines, cruise operators and hotels don’t have the same luxury. Hertz’s performance is also remarkable when compared to Avis Budget Group. Avis posted a better overall adjusted EBITDA of $47 million in the first quarter on $1.37 billion in revenues, though it was able to avoid Hertz’s more severe fleet cuts and store closures. Both companies posted their best first
quarter adjusted EBITDA since 2015. Hertz’s per-unit metrics were solid too, befitting an environment of tight supply and returning demand last seen exiting the Great Recession. In the first quarter in the U.S., Hertz recorded per-unit gains in revenue per day (RPD) and revenue per unit, per month (RPU). In RPD, Hertz realized an 11% gain quarter over quarter ($47.63 per car in Q1 2021 compared to $42.74 in Q1 2020) and a 24% gain in RPU, from $867 in Q1 2020 to $1,075 in this year’s first quarter. As a result of this strong performance and leaner, more efficient operations heading into strong demand, Hertz finds itself in a bidding war that includes shareholder recovery, unusual for a Chapter 11 exit. A May 10 auction was scheduled. During the quarter, Hertz also closed on the sale of its fleet leasing and management subsidiary Donlen to Athene Holding for $891 million. Liquidity at the end of the first quarter was $1.1 billion. We thank Auto Rental News for reprint permission.
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Sherwin-Williams’ Lee Rush Provides Insight on Quality Validation Needs by Chasidy Rae Sisk
On March 25, the Tennessee Collision Repairers Association (TCRA) hosted an evening of training, featuring Lee Rush from Sherwin-Williams, who explained “Why Ignoring Quality Control Will Cost You Profits and Sales.” Rush promised to deliver an informative presentation on quality control as well as a demonstration of a new QC product. TCRA President JMark Smith welcomed attendees from the Carolinas Collision Association (CCA) and the Mississippi Collision Repair Association (MSCRA), and noted, “QC is an important part of our business, and as a member of TCRA, quality repairs are something we place a lot of emphasis on because we want repairs done correctly.” Beginning by sharing some details about his background and experience, predominantly as part of an operations team, Rush offered insight into how to implement processes in multiple locations with multiple variations. “Over the years, in-process quality validation proved to be challenging,” Rush said. “The industry needs methods and procedures to evaluate quality throughout the process instead of figuring out what needs to be reworked once the repair is completed, or worse―having the consumer find the quality issues!” After chasing a better method for quality validation and verification for years, Rush joined Sherwin-Williams, where he works with shops on developing and improving the business model, allowing him to educate those shops on why ignoring QC and technology costs profits and sales. His goal for the presentation was to provide enough insight to begin to change the shops think about quality validation. “The first part of this is just changing how we think and beginning to move away from tradition into a new business model,” he said. “Technology is our friend when it comes to quality validation,” Rush continued. “The industry is finally catching up with regards to applications that improve our ability to bet-
ter manage, lifting the burden and allowing us to focus ON business instead of being crazy IN the business.” While the industry has long known there is a need to validate quality, the real challenge has always been determining how to do it. “We need to validate quality prior to the consumer validating it,” Rush stressed. “Over the years, we’ve tried many methods with limited―or no―success, but QC validation continues to be a universal challenge for
On March 25, the Tennessee Collision Repairers Association (TCRA) hosted an evening of training, focused on QC validation methods
the collision industry. This industry is a high variation business model, and all that complexity from vehicle to vehicle adds complexity. “Quality is a pain point on every production floor, plus it presents a huge liability risk that won’t be defendable with a pencil and paper checklist going forward.” Rush also addressed how quality issues cost every shop profits and sales, both in materials costs related to reworks as well as by preventing the shop from creating new revenue. “We’ve grown tolerant to this disruption in production, and we need to focus now on improving our labor utilization,” he said. Shops face increased liability and risk due to vehicle complexity and required repair methods related to ADAS, complex steels, aluminum, carbon fiber, electronic components and new bonding technologies. “These increase our liability and risk, which is getting steeper and steeper for collision operators every day,” Rush said. “Change is constant; make sure quality is constant, too.” The need for in-process QC validation is even greater due to insurer demands related to DRP service level agreements, including varying insurer needs, virtual claims, approval process, inconsistent appraisals,
32 JUNE 2021 AUTOBODY NEWS / autobodynews.com
customer handling process, parts usage and authorizations, and supplement authorizations. “The market hadn’t produced any real technology to help and assist shops as they verify quality with their techs. It’s contingent on us to remind people and ensure we remain compliant from program to program,” Rush said. “Now, there’s technology to assist us with this, and it can easily be managed through a phone application to ensure each claim is handled according to that carrier’s expectations and requirements.” QC validation is also a relevant component of customer satisfaction, and citing a study that showed 82% of consumers are less likely to use a business after seeing a negative review, Rush identified causes of those: missed delivery times, defects on delivered vehicles and poor internal communication. “Our current internal communication method is ‘stop and tell someone,’ but that’s disruptive because it negatively impacts labor utiliza-
tion,” Rush pointed out. “It’s a bad system, but we’re going to rectify that with technology and in-house quality validation.” Poor quality costs shops in reworks, increased cycle time, wasted production time, inefficient communication processes and recurring unaddressed issues with parts, equipment or skills. “It’s cumulative, so we’re all desensitized to it. But we have to take care of it. The reality is when we stop, reverse or rework, cumulatively, this replaces a lot of potential labor we could have produced and sales that could have followed,” Rush said. “If you calculate it, you’ll be shocked at the amount of profit, cost and sales impacts.” Traditionally, shops perform QC during a visual post-repair inspection, but the only items that can be seen post-repair are fit, function and finish. “Post-repair inspections don’t tell us about the unibody or frame, if the suspension measurements are within tolerance or if the structural
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components are welded correctly,” Rush noted. “There’s no validity with a paper checklist, and no method to recall or review the data. There are a lot of challenges with the traditional QC methodology, and the industry has a real need for a consistent QC validation method.” The average collision repair requires a 20-step process, according to Rush, as well as an average of 75 individual operations, 23.6 labor hours and 10 new parts replaced. “Vehicle damage repair is a highly variable practice; I believe the automotive industry has the highest degree of variability in any industry,” Rush said. “The average vehicle will go through five different practice repair phases, and eight to 10 individuals can be a part of each repair order. Given the massive amount of variation, a paper and pencil checklist does not meet the need of today’s repair cycle complexities; it demands a better solution.” Rush suggests a method that uses quality validation technology to ensure shops are verifying and validating quality as the vehicle cy-
cles through the repair process. He believes the industry needs a “digital tool, designed to be used with any tablet or handheld that doesn’t require special purchases. It should use imported repair order data, identify non-compliance using photo triggers and enhance communication, while also providing fully customizable, dynamic SOPs. “It must allow us to inspect quality in-process regardless of the vehicle, the insurer, the OE requirement and the number of handoffs, or why use the application?” Sherwin-Williams developed the Collision Core Quality application to meet these needs. “Conducting in-process quality validation gives shops the ability to verify the operation was completed and then validate whether it was done correctly by passing or failing it,” Rush said. “It includes an event log to demonstrate the QC validation and protect shops from liability by showing that we have a deliberate in-process QC system. These documents verify that we’re serious about our QC process, and they will stand up against scrutiny.”
The application also allows users to sort and distribute finished records, emailing them to anyone during or after the repair. It also removes blockages and allows for labor optimization by enhancing internal communication. “The minute I hit ‘fail,’ the app communicates to those who need to know,” Rush said. “The instant real-time communication is the most powerful aspect for me.” Shops can load as many customized SOPs as desired, and the app also allows technicians to pull down OEM repair methods directly from the manufacturer and save them to the repair order, demonstrating responsibility and due diligence with regard to liability and risk. The Quality Validation dashboard allows users to analyze where failures are occurring most frequently so they can evaluate whether processes need to be modified to reduce failures. “Today, we have nothing. We’re intuitive to a degree because we know a little, but we really don’t know what we don’t know. We want to have these records and reporting
ability so we can review them, document them and improve our repair process based on that data,” Rush advised. “Highly technical vehicles require highly technical repairs. Quality validation must be an accessible, simple-to-use solution to address a complex problem, plus it must provide high-level dynamic quality checks and produce a full digital reporting trail,” Rush said. “This app offers a mechanism to record and remove errors, improve quality and efficiency, and reduce repair liability while improving internal communications, which also reduces errors.” Rush proceeded to demonstrate how to use the app to conduct quality validation through the repair process, showing how photos can be added in-app and raving over the communication piece. He also showed different customizable features before answering attendees’ questions. Sherwin-Williams’ Collision Core Quality application is available to anyone in the collision repair industry; users do not need to be customers of See Validation Needs, Page 42
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Tips for Busy Body Shops
Stacey Phillips is an award-winning freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at firstname.lastname@example.org.
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Best Practices for an Effective Health and Safety Program An effective health and safety pro- Curtis. “I was impressed with our gram can help collision repair facil- team keeping up with the services ities reduce injury and illness rates, and demands.” with compensation Stacey Phillips decrease workers’ Autobody News reached out to costs, increase productivity and im- Curtis to learn more about the improve morale across the workforce, portance of establishing an effective according to Wayne Curtis, direc- health and safety program that entor of field services at KPA. sures compliance with national and Based in Lafayette, CO, KPA state regulations. provides environment, health and safety (EHS) and workplace comwith Victoria Antonelli How can a collision repair pliance software and services for a facility ensure proper compliwide range of industries, including ance? automotive. Each year, about 100 KPA safeI recommend starting with ty specialists conduct audits at more the basics. The first step is to than 2,000 auto collision-related fa- evaluate the shop’s current situation cilities across the U.S.,Ed Puerto Rico and do an assessment. with Attanasio and Canada to determine if busi- I’m emphatic that all collision nesses are compliant. Once the eval- repairers should perform an audit to identify environmental and safety risks. This will help determine the necessary actions to meet mandatory requirements, avoid citations and with Gary Ledouxpotential legal action. Third-party companies, such as KPA, are available for these types of audits. After reviewing the inspection results, the next step is to determine the priorities when developing a health and safety program that adWayne Curtis of KPA said providing regular dresses the high-risk areas in your safety training for employees helps collision with Stacey Phillips workplace. All collision centers are repair facilities establish a safety culture and is proven to reduce injuries required to have a written hazard communication program and prouations are complete, the company vide training to employees as a basic then discusses concerning issues, of- Occupational Safety and Health Adfers recommendations and conducts ministration (OSHA) requirement. training if necessary. Facilities are also required to with Mike Anderson “The goal is to help companies install a program to protect workproactively identify risks, stay up- ers from respiratory hazards. Shop to-date on evolving regulations and owners and managers can ask themkeep workers safe,” said Curtis, who selves: “Are all employees trained has worked with KPA for 17 years. on our workplace hazards and how He estimates KPA completed to protect themselves? Have emmore than 20,000 in-person and vir- ployees who wear tight-fitting restual field visits to auto dealerships, pirators been fit tested? Have they collision repair shops, trucking and been medically evaluated to wear a rental car locations in 2020. This respirator and do you have proof of is a similar number that took place medical clearance on file?” prior to the pandemic. In addition, If the answer is “no” and a facilthe company conducted 1.2 million ity determines that it doesn’t have a trainings last year, the majority of good process in place, it’s important which were online. to find someone who can assist. Not “It was certainly challenging only can it help streamline the steps for us during the pandemic,” said needed to navigate the maze of regu-
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lations, but it can also bring the shop to a level of compliance sooner, faster and less expensive than you can do on your own. In addition, facilities should pay close attention to environmental requirements. This includes practices related to waste management, documenting hazardous waste inspections, container labeling and retaining waste manifests. A safe workplace requires more than just being compliant. Periodic evaluations can help identify weaknesses in the processes your company uses to address hazards. By being proactive, it allows everyone to have the knowledge to identify and resolve hazards before they create a serious incident.
What types of regulations should repair facilities be aware
There are requirements by OSHA, the Environmental Protection Agency (EPA) and Department of Transportation (DOT), as well as state regulations. The collision industry is heavily regulated when it comes to EHS. The same standards that apply to auto dealerships apply to collision centers. It’s imperative to have the tools, resources and equipment that allow for the most compliant and safe applications. It seems that the Biden administration is paying close attention to the environment, specifically the Clean Air Act. I’ve also seen increased activity with the EPA 6H Rule, the National Emission Standards for Hazardous Air Pollutants. EPA Region 4 recently sent out letters to collision centers reminding who is subject to 6H rule requirements and emphasizing the impor-
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tance of compliance. The 6H rule requires an initial notification form to be sent to the EPA, ongoing employee training and other requirements such as paint booth filter efficiency and HVLP paint guns. The industry is adapting to these rules. With newer paint lines carrying fewer heavy metals, petitioning the EPA for an exemption is now possible. We are very focused on that right now and feel that it will be a key focus area over the next few years. The EPA Clean Air Act penalty policy is stringent and has escalation factors for larger businesses. The EPA expects larger companies, that have better funding and resources, to use these resources to achieve compliance. If non-compliance is observed, an economic penalty is assessed based on the size of the violator. If you are an MSO and have one facility that is not compliant, you could be looking at hundreds of thousands if not millions of dollars of liability. It’s critical for shops to develop written compliance programs for federal and state safety regulations.
In some areas of the country, such as California, it can be really challenging to keep up with the regulatory climate without having a dedicated EHS person on your staff. Compliance is often very complex and having a consulting company that comes in to help navigate can be advantageous.
What are some best practices facilities can put into place?
Business success cannot occur without having a workforce educated in industry regulations, internal policies, safety and ethics. At a minimum, all employees should be trained on the types of hazards that are present and where they can get access to information about chemicals that can lead to these types of situations. This is where compliance training can be so helpful. Many accidents that take place in the workplace are avoidable. Providing regular safety training for employees helps you establish a safety culture and is proven to reduce injuries. I always recommend establish-
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ing a safety committee and holding regular meetings. It’s a great way to keep your team up-to-date with EHS initiatives and helps adds a strategy on how to achieve your EHS goals. A good rule of thumb is having a quarterly safety committee meeting to assign preventative actions, develop incentive and enforcement programs and review processes. Helpful checklists and resources are available at https://www.kpa. io.
What are some of the most impactful changes you have seen as a result of COVID-19?
There are a lot of changes regarding regulations that have happened since the pandemic. In March 2021, an OSHA Directive was released, outlining the policies and procedures for implementing a National Emphasis Program (NEP) for COVID-19. The NEP focuses on high-hazard industries such as health care and dentistry, which are more likely to come in direct contact with COVID-19 positive cases. The collision industry
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was not listed as a primary focus of the NEP. When President Biden came into office, OSHA provided updated COVID guidance within a week. Since that time, we’ve seen the initial steps towards scaling back of CDC guidance. We expect that’s a sign of the vaccinations and more information on the risk of infection. President Biden also asked OSHA to investigate if an Emergency Temporary Standard (ETS), a new OSHA standard, should be issued regarding COVID. On April 26, OSHA issued a proposal for a Federal ETS to be issued. An ETS would effectively bypass the normal rulemaking process of OSHA. If adopted, OSHA would have six months to adopt a permanent rule. We expect to know more about the details of OSHA’s proposed rule soon. In regard to local COVID regulations, these still remain very different and under direct enforcement. It’s imperative to follow what is going on in the state, county and city where your business operates. That can be very challenging since each local area has done things very differently in regulating the pandemic. What are some of your predictions for the future?
Short-term, we should expect a loosening of COVID guidelines and a greater consideration on the risk of infection. I recommend all businesses to continue to remain in alignment with CDC and OSHA guidelines even while vaccinations increase and local regulations are lifted. Long-term, it will be interesting to see the Biden administration’s activities and how that will impact our industry. Over time, we expect increased budgets to be passed for agencies such as OSHA, EPA and DOT. Likewise, we should expect increased funding for enforcement, leading to more boots-on-the-ground inspectors performing more frequent inspections. Protecting the environment was a key campaign pledge for Biden so we will be keeping a close eye on any areas of emphasis, namely air and water. KPA will remain on the lookout for any areas that impact collision centers and how we comply. See Safety Program, Page 42
autobodynews.com / JUNE 2021 AUTOBODY NEWS 35
How to Get Your Customers to Trust You in a Skeptical World by Ed Attanasio
Do your customers trust you? If so, how and if not―why? People want to trust their financial advisors, teachers, lawyers, doctors, politicians and, yes, the people who work on their cars. But many consumers entering any business transaction are often skeptical at the outset, and that’s why trust has to be established and reinforced over time. Every business wants its customers to trust them and feel comfortable enough to use their services again and refer them to others. A body shop is being judged every day―by its customers, insurance partners and vendors, and in a world of instant transparency, trust is more important. Throw in the pandemic and a full year of uncertainty, and people are more skeptical about everything now. One body shop owner told me recently he doesn’t even ask what’s next, he just puts his head down and gets the work done, in order to maintain his sanity. “20/20,” “60 Minutes,” “Fight Back! With David Horowitz,” “CBC Marketplace,” “Project Bumper” and “The Investigators” have produced multiple TV episodes about body shops ripping off customers. I recently saw a news segment produced by CBS Chicago designed to protect consumers, but they also scare them. As a result, many vehicle owners are wary before they even enter any repair facility for the first time. In the old days, these types of reports appeared on TV once or twice, but now they’re available on YouTube 24/7. Bad press illustrates the importance of building trust with your customers. In general, American drivers don’t trust auto mechanics, according to a AAA survey. It found 66% of drivers do not trust car repair shops in general, though 64% indicated they do take their car currently to a repair shop with a reliable mechanic whom they can trust. The AAA survey also shows 33%―75 million motorists in total―are still trying to find a trusted service department, which leaves
them vulnerable for when their car breaks down. Here are the top reasons why American drivers mistrust automotive repair shops, both mechanical and collision:
Collision repair is one of those how important they are to establish industries where the average custom- trust with your customer. Point them er is already disgruntled, so the goal out when they show up to your shop is to both placate them and get them for an estimate, almost like a checkto trust you―and that’s not easy. list, because studies prove that when In most cases, your customer is you show someone five truths, they in a rush and wants everything done feel you are trustworthy.” Recommends unnecessary services yesterday. No one ever says, “Hey― Here is an example of five truths (76%) let’s have some fun and get our car communicated during the first 10 Overcharges (73%) serviced!” Vehicle repairs rank right minutes interacting with the cusA negative experience (53%) up there with trips to the dentist. tomer for the first time: the appear John Stuef is an industry con- ance of your shop/reception area; the Sub-quality work (49%) sultant, life coach and the author way your people dress and speak; Other main offenders include charging of “From Doing to Leading: Your the plaques on your walls showing Guide for Inspiring People I-CAR, training and OE certificafor OE parts that are either on the Front Lines.” He tions; the overall attitude in the shop; aftermarket parts, phantom has managed MSO shops and the thoroughness of the estimate. repairs, lapses in communication and bait-and-switch for decades and dealt with Stuef claims you can’t build tactics. literally thousands of cus- rapport until you establish trust, and Interestingly, older vetomers, so the topic of trust the best way is with the five truisms. hicle owners from the Baby is a subject Stuef has been One way to build trust is by Boomer generation are most John Stuef, industry studying for decades and using technology to provide a betlikely to trust car repair fa- consultant, life coach developing techniques to ter experience for your clients. By cilities, compared to Millen- and author, said if address it. using today’s tools, you can enable nials and Gen-Xers. Twenty you can establish “Trust is built when peo- them to make their lives easier and five truisms with percent of Boomers surveyed ple see that your actions line drama-free. a new customer, for the AAA study say they they will trust you up with the words you say,” Now they can eliminate phone Stuef said. “I often talk calls and paperwork; they can com“totally trust” the auto repair completely industry. about the five truisms and See Skeptical World, Page 40 In addition, Boomers are also more likely to have a car repair shop they trust (76%), compared with 55% of Millennials and 56% of Gen-Xers. Philip Reed, a reporter for Edmunds, interviewed a handful of body shop owners for a blog, “Confessions from the Auto Body Shop, Get Your Car Fixed Right Without Getting Ripped Off.” He interviewed shop owners off the record, so he got truly candid reactions. TRUST FORD PARTS Reed heard things like, “I don’t CERTIFIED PARTS WHOLESALING DEALERS care what state you live in, for every 10 body shops, three of them FLORIDA TENNESSEE are unethical and five of them do Grieco Ford of AutoNation Ford Memphis mediocre work at best;” “The last MEMPHIS Fort Lauderdale thing we want is a bad reputation or FORT LAUDERDALE 800-388-6457 reports of poor customer service;” 954-390-6400 901-362-7381 Direct “Most body shop owners are very 954-390-6449 Fax 901-794-2360 24 Hr Fax concerned about getting good feedHours: M-F 7-6; Sat 7-2:30 Hours: M-F 8-5 back and building a list of customers email@example.com www.autonationfordmemphis.com who’ll come back next time work is needed.” GEORGIA So, if indeed 30% of all the AutoNation Ford shops out there are shady, how do UNION CITY you convince the public you are a 866-520-7893 member of that 70% category? How 770-964-8604 do you build trust with customers 770-306-6715 Fax who are not in a positive space afHours: M-F 7-5; Sat 7-5 ter an accident has added a bunch of drama to their lives?
36 JUNE 2021 AUTOBODY NEWS / autobodynews.com
Collision Repair Veteran Brings I-CAR Training to Collision Industry in China the most dedicated collision repairers along the way. Here is his story, Like many others who work in the as told to Stacey Phillips. collision repair industry, you could I was born in Dallas, TX. Afsay Tony Simon grew up in a body ter World War II, my dad worked shop. His great-grandpa, grandpa, on John Deere tractors until he was dad and brothers all worked on vehi- hired at Ed Mauer Ford repairing and painting vehicles. We lived in cles, in some form or another. a house with a very large garage where he repaired what they called “re-builders.” Dad saved enough money to open his first body shop and I spent my free time on weekends and summers at his facility. I swept the floor, cleaned the toilets, anything to be there. I Pictured, left to right, are Sue Zheng; Zhang Jingwei, vice admired the way people represident of the China Automobile Maintenance and Repair paired and painted vehicles. Association; Ron Olsson, president of Pro Spot InternationRudy, a painter and body al; and Tony Simon during a student skills competition in man at the shop, taught me Wu Xi, China, in 2013 how to paint, along with Simon had a passion for cars my Dad and older brother and menand turned that into a long-term ca- tor, Fred. Fred was my inspiration. reer where he had the opportunity to We worked together for 20 years and work internationally, bring I-CAR he provided me with the skills and training to China and meet some of knowledge that I have depended on by Stacey Phillips
throughout my life. “Tony was born to be a body man. Even as a child, he was drawing custom cars. By the time he was in junior high, he worked at his dad’s body shop after school and Saturdays. Then on Sunday, he would go with his dad and brother to the drag strip where he worked with the pit crew. Tony has incredible hands that can fix or build anything he visualizes.” — Don Doak, lifelong friend. We began to repair heavy-duty trucks in 1964. Soon after, we stopped working on passenger vehicles. As the business grew, we needed more shop space and upgraded our equipment. Shop employees were hard to come by as not many people worked on heavy trucks. Few auto techs wanted to make the transition. As a result, we developed an in-shop training program for repair procedures starting in the late 1960s. A man named Kevin Costner came to work for us after graduating from high school in 1979 and became a trusted employee. Kevin is
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currently a technical trainer at Gerber Collision. “Tony is a dreamer. He envisions a project and sees it through. He doesn’t take rejection as a stopping point. He works around it. Tony taught me to see the world much differently… that there are no restrictions in life. I can be the best I can be at repairing vehicles and being a human being.” — Kevin Costner. In 1983, my Dad retired, so my brother and I closed the truck shop and I moved to Kauai, HI. I worked as the body shop manager at Kuio Motors, a small GM/Nissan dealer on the island’s south side. We moved back to Texas in 1985 and I opened Simon Company Body Shop the following year. As my business grew, I opened another shop nearby in 1987 to handle the work volume. Kevin began working with us again. Unfortunately, I needed to close my shops in 1991 due to a divorce. In 1996, I was hired as a body tech at a local GM dealership where I worked for two years.
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During this time, I attended my first I-CAR class. I became interested in becoming an instructor and I contacted the I-CAR southwest regional manager to begin that journey. Jeff Peevy soon came on board as the regional manager. He currently holds the position of vice president, Technical Products, Programs & Services at I-CAR. I moved to New Zealand in 1998. I found a job in a panel beater shop (body shop) that participated in I-CAR training―A1 Paint and Body in Auckland, North Island, NZ. I worked in the paint shop as a prepper and eventually performed collision repair work while attending I-CAR classes. I also taught panel bonding on the North Island for New Zealand I-CAR. When my father passed away in 2000, I returned to the U.S from New Zealand. Jeff asked if I would conduct I-CAR classes for him in the Phoenix, AZ, and East Texas areas. “Tony has a genuine dedication to educating the industry and will go to extreme lengths to make it happen. Once, while preparing for an I-CAR regional conference, Tony drove 100 miles one way just to help load boxes because I had hurt my back. Tony never sought recognition for all the work he has done for the industry over the years. He simply just wanted to see that people learned things they needed to know.” — Jeff Peevy. Several times, I drove non-stop from Arizona to Texas for a class in Ft. Worth and only had two students. To help solve the low-attendance problem, we came up with a plan under the I-CAR Fort Worth committee leadership of Dave Gauthier―to arrange some sponsors and give away two free classes. We held an awareness event called The I-CAR EXTREME and taught 237 students at one time. One of the sponsors was Tim Curran, owner of Car-O-Liner Southwest Company. Tim asked Ron Olsson, president of Pro Spot International, to donate a demonstration spot welder, as Tim sold both brands. Pro Spot sent a spot welder and an engineer, Bob Pulth, from the company’s California factory to demonstrate how to use it, because spot welding was a new technology
to the collision industry back then. The demonstration included a chemist from Lord Fusor, who replaced a quarter panel with weld bonding prepared by Kevin and his team. Since that first event, many similar types of programs have been conducted. “Tony has definitely been a gifted teacher and very generously contributed his time and knowl-
One of the attendees was the China National Model for collision repair shops, Mr. Wei. He understood the meaning of my lecture and began to change his shops over to 80/20 gas. This has been my main measure of success working in China. A teacher at the school knew that I had lived and worked in New Zealand and introduced me to Xiangyun Zheng (Sue), an English major at Shandong University in Jinan. Shortly after we met, I asked Sue to travel with me to a lecture and be my interpreter. In 2004, the Chinese government asked Sue and me to conduct an 11-month training program in 40 cities for the China Automobile Maintenance and Repair Association (CAMRA). As Tony Simon is shown giving a demonstration during part of the program, there the 10th China International Auto Repair Tech, Tool and was a competition. We Equipment Fair in Beijing, China trained 120 students in each edge with many technicians over the city. The competition was a new enyears. Tony will always be remem- deavor for the collision industry in bered as a true pioneer with I-CAR China and still takes place. and its training mission,” — Tim The students measured and Curran. I had wanted to visit China since President Nixon traveled there. I learned that Car-O-liner was going to sell equipment in China, so I asked Tim to introduce me to CarO-Liner’s international sales rep. I arranged a meeting with the rep the following year and developed a Visit these Genuine plan. Hyundai Parts Dealers Car-O-Liner had a relationship with Shandong Jiatong University in China and provided them with Florida a frame machine and measuring KEY HYUNDAI equipment. The school operated a Jacksonville 4660-100 Southside Blvd. shop on campus but did not use the 866-973-6996 equipment. 904-565-2281 The rep thought I could help 904-565-2210 Fax him train the school and encourage M-F 7:30am 5:30pm them to use the equipment. I made Sat 8am - 4pm an agreement with the school to email@example.com teach the students English while I also traveled for them, lecturing North Carolina about collision repair. SPORT DURST HYUNDAI During the summer, I lectured Durham at a China automobile associa4507 Durham Chapel Hill Blvd. tion meeting in Yantai. I met a lot 919-425-0877 of leaders and spoke on the use of 919-536-6566 Fax M-F 8am - 6pm 75/25 gas in MIG welding. At that Sat 8am-4pm time, shops had MIG welders but firstname.lastname@example.org bought 100% CO2 gas to weld with www.sportdurst.com because it was cheaper.
38 JUNE 2021 AUTOBODY NEWS / autobodynews.com
pulled, MIG welded and spot-welded with a Pro Spot PR-2000 welder donated by Ron Olsson. Since 2005, Sue and I have traveled back and forth to China to focus on collision repair training and testing. We also taught in Taiwan and mainland China for AIG insurance. “When Tony headed to China, I don’t believe he knew anyone. He overcame the culture and language and I feel he even helped the collision industry there with training and his relationships with equipment companies here in the U.S.” — Kevin Costner. In 2006, we attended the I-CAR annual meeting in Scottsdale, AZ, and Jeff suggested that we meet with the head of the I-CAR weld test program about a new pilot program where testing was conducted in shops rather than schools. In addition to being president of Pro Spot, Ron was an I-CAR board member and was attending the conference. I asked if he could provide a trailer and welders for the pilot program and he said, “Yes.” Ron had recently sold welders to Sterling Auto Body and needed to
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provide MIG and spot-welding training for each of the 57 shops. Sue and I mapped a route of all the locations, found the Gold Class shops along the way and faxed ahead to see if any shops wanted tests performed. Most people thought we were scammers as no one had heard of inshop weld testing. We traveled more than 15,000 miles to 110 cities in 42 states over 10 months. Until October 2018, we spent 250 or more nights a year in a hotel on the road training and testing. I-CAR then asked that we work as consultants with their China endeavor. Over the years, many people and companies have requested that I-CAR train in China.
We introduced I-CAR to some of our business friends in China and began to arrange face-to-face meetings in 2019, where Sue acted as the translator. Unfortunately, the COVID-19 virus began to spread and that ended all the work, here and in China. I hope the industry recognizes what a great opportunity that I-CAR has given our industry to gain the knowledge to repair today’s complex vehicles. Without I-CAR and the great people who are part of their leadership team, like John Van Alstyne, CEO and president, and Jeff Peevy, our industry wouldn’t be the same.
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Tesla Says All Supercharger Energy Will Be Renewable in 2021 by Steven Loveday, Inside EVs
Reportedly, on Earth Day, April 22, Tesla announced it has plans to power all Superchargers with renewable energy by the end of 2021. This would work to significantly reduce costs over the long term and make driving a Tesla even better for the environment. Tesla’s Supercharger network is arguably one of its top advantages over other brands producing electric cars. While most other automakers count on third-party public charging options, Tesla is constantly improving and expanding its fast and reliable Supercharger network. Keep in mind, Tesla also has its own solar business, so this plan won’t really be something new for the automaker. Even if competing brands decided to roll out a massive network of public fast-chargers over a short period of time, there’s a pretty solid chance they’re not planning to make them all run on solar energy. And, if they did, they may have to go to a company like Tesla for
help. Apple recently announced it’s using Tesla’s battery storage systems at its California solar farm. The report about the Superchargers running on renewable energy was published by Electrek. As the story goes, Justin Lange, Tesla’s marketing chief for mid-Atlantic Superchargers, posted some interesting information about Tesla’s Supercharger network and its progress. The post surfaced on Earth Day and include the following sentence: “Additionally, all our Supercharger energy will be 100% renewable in 2021.” Lange also highlighted Tesla’s Supercharger milestones, including delivering 2.4 TWh of energy, enabling 8.3 billion emission-free miles, saving 334 million gallons of gas and offseting 6.6 billion pounds of CO2. This seems like a very lofty goal. Can Tesla do it? Do you believe this will apply to all areas across the globe, or just to those for which Lange is responsible? We thank Inside EVs for reprint permission.
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Skeptical World municate instantly via text or email. If they want photos of the repair, it’s a snap, and they are kept in the loop during every stage of the process. By writing estimates that are fast, easy and, most importantly, accurate, there are never surprises along the way. By bringing more to the table with new technology and cutting-edge techniques, vehicle repairers are building trusting relationships with their customers. By continually pursuing cutting-edge tools, these forward-thinkers will continue to excel in a market that’s already more knowledgeable, skeptical and more discerning than ever. You can tell people great things about your business all day long, but folks want to see it, and the five truisms described by Stuef will always speak louder than words. The underlying message is if you run a good shop that produces quality work, trust is the byproduct and good things will happen as a result.
Ford Releases New Position Statement on Bumper Fascias Ford and Lincoln vehicles contain many state-of-the-art features that provide occupant safety and enhance the driving experience. Bumper fascias play an integral role in the performance and functionality of these features. The original bumper fascias on Ford Motor Company vehicles are designed and manufactured to function with advanced driver assistance systems (ADAS), including Pre-Collision Assist with AEB, BLIS® with Cross-Traffic Alert, Intelligent Adaptive Cruise, Lane-Keeping System, Active Park Assist, Evasive Steering Assist, BLIS® with Trailer Coverage and Pro Trailer Backup Assist. During body repairs that involve front and rear bumper fascias, it is critical the vehicle be restored to proper operating condition to ensure these important safety systems function correctly. Repair of bumper fascias using fillers, reinforcement tape, hot staples or plastic welding can adversely affect ADAS operation. For this reason, Ford Motor Company is limiting repairs on front and rear bumper fascias on all Ford Motor Company vehicles equipped with any ADAS features to topcoat refinish
Why Tesla Hasn’t Been Affected by the Global Chip Shortage by Andrei Nedelea, Inside EVs
The pandemic has had an effect on the microchip industry, and this has hindered the production of everything that requires them. It also drove up demand for some electronics, which further deepened the problem. Industries affected by the shortage included the automotive sector, but Tesla recently announced how it found a workaround that should allow it to be unaffected by the insufficient chip situation. Tesla was previously affected, and during the most recent earnings call, CEO Elon Musk compared the situation to wartime shortages. However, the manufacturer found a way around the problem by opting to use microcontrollers instead, and redesigning the software to be compatible with different chips from other supplies. “In Q1, we were able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously
developing firmware for new chips made by new suppliers,” Tesla said. This has to be some kind of achievement: to design a new chip, find a new company to make it and modify the firmware in order to make everything compatible—all of this was done on the fly, without really stopping vehicle production. We’re pretty sure legacy automakers would not be very inclined to do something like this, even though this move allowed Tesla to bypass the shortage that affected pretty much every other major carmaker, causing delays. Tesla has proven yet again that it does not have to do things exactly like the traditional automakers that are often hindered by their size and inability to apply changes quickly. If the chip shortage persists, and there’s a good chance that it will affect the industry through 2021, this kind of mentality will keep giving Tesla an edge over OEMs. We thank Inside EVs for reprint permission.
40 JUNE 2021 AUTOBODY NEWS / autobodynews.com
only. Topcoat finish cannot exceed 12 mils (300 microns) in total thickness. Any bumper fascia damage that requires substrate repairs must be replaced. Measurement of the topcoat finish requires the use of an ultrasonic paint thickness gauge, such as PosiTector 200 or Phase II UTG-2900, available through Rotunda. The following points provide an overview of bumper fascia repairs: • Paint repairs can be made if the material thickness does not exceed 12 mils (300 microns) in total thickness • Use of any filler materials or reinforcement tapes to repair substrate damage is not permitted • Use of hot staples or plastic welding to repair cracks or damage is not permitted • Repair of any sonic-welded sensor retainer rings or tabs is not allowed, due to possible misalignment and incorrect operation of the sensor • Note that vehicle wraps, bumper stickers and aftermarket accessories in the area of the fascia can create system operation concerns Reconditioned, refurbished or salvage bumper fascias may have
been repaired using substrate repairs, including the use of filler material, plastic welding and hot staples, which can interfere with ADAS operation. For this reason, Ford Motor Company does not approve the use of reconditioned, refurbished or salvage bumper fascias. Only by using Ford Original Equipment bumper fascias can you be assured of the fit, function and safety of the repair. Ford recommends the use of the Integrated Diagnostic System (IDS) or Ford Diagnosis and Repair System (FDRS) to perform all vehicle diagnostic testing, and when performing module programing and system calibrations during collision repairs. Additionally, Ford factory diagnostic and repair procedures should be used when carrying out all collision repairs. Ford dealer-owned body shops can access service information, training and diagnostic scan tool support through the Professional Technician Society at http://www.fordtechservice.dealerconnection.com and independent collision repairers can find information at www.motorcraftservice.com. Source: Ford
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Chip Shortage Forces U.S. Automakers to Shift Focus to High-Profit Vehicles by Sam D. Smith, CarScoops
It would appear that during a tumultuous period for car production, U.S. automakers may begin to focus on lower volume, premium-priced cars over cheaper alternatives. A report by Reuters details an investor call from GM CEO Mary Barra, who stated the company can deliver better results without stockpiling vehicles or padding sales volumes with low-priced, low-margin models. U.S. automakers have often opted to keep up production of higher-volume, lower-margin cars, appealing to a broad cross-section of buyers. As Jalopnik points out, the concept of Alfred Sloan, GM’s president and chairman in the 1920s until the late 1950s, was “a car for every purse and purpose.” But after a challenging period during the pandemic and the difficulty faced in sourcing semiconductors for production, by prioritizing sales of higher-margin cars, GM has been able to post solid profits for the first quarter.
“We’ll never go back to that level of inventories that we held pre-pandemic because we’ve learned we can be much more efficient,” said Barra. Similar statements have been made by other automakers as well, including Stellantis and Ford.
During the chip shortage, General Motors has shifted supply and supported the production of higher-margin cars while temporarily halting production of high-volume but less expensive models. The General recently announced it would idle production of its second-best selling U.S. model, the Chevrolet Equinox. They have also
Continued from Page 33
For more information about TCRA, visit MyTCRA.com.
We thank CarScoops for reprint permission.
Safety Program On the federal level, 6H will continue to be a focus. Also, we expect to see increased enforcement under the Clean Air Act penalty policy for car and truck modifications that reduce the original manufacturer emissions settings or equipment. The ultimate goal should be to have an overall compliance program for your business. We all have challenges hiring workers and if we’re down one or two employees due to an entirely preventable safety accident, it speaks directly to the bottom line. By implementing good strategies and being compliant, the fewer incidents shops will have and the less likely they will be involved in litigation. From an owner’s perspective, you can sleep better at night knowing you have an established compliance program in place to help ensure a safe, healthy, compliant and productive workplace. You limit your risks and know your employees will return home in good health to their family members.
Validation Needs Sherwin-Williams. “Traditionally, we don’t inspect quality until the repair is completed, but we really aren’t inspecting quality―we’re just repairing the vehicle, passing it to the next department, and hoping they find the issue if there is one,” Rush said in conclusion. “We’re checking boxes but not really inspecting quality while the repair is in-process. “We don’t inspect quality, and we have to change that behavior. The industry needs to create a new tradition of quality validation.”
curtailed the output of the Cadillac XT4 and Chevy Malibu. Attaining greater profitability by way of reducing stockpiling, shunning volume sellers and focusing on models with fatter margins isn’t a new concept to Detroit’s Big Three. However, it wasn’t widely implemented due to pressure to keep factories open and chase sales numbers. But thanks to external pressure from the lack of supply, automakers have been forced to go down this route. The boost in profitability and share value will, no doubt, be hard to unsee. It’s not all good news for GM, though. Barra went on to say the semiconductor situation is likely to worsen before it gets better, and both Ford and Stellantis predicted supply delays will likely continue into 2022. GM also forecasts the chip shortage is likely to see $1.5 billion to $2 billion lost from this year’s profit.
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Axalta Launches Mobility Coatings
LexisNexis U.S. Auto Insurance Trends Report Shows COVID-19’s Impact on the Industry LexisNexis Risk Solutions on May 10 released its 2021 U.S. Auto Insurance Trends Report, which aggregates annual market data about driving behaviors, auto insurance shopping, underwriting and claims to help insurance carriers better understand the shifting landscape. This year’s report analyzes 2020 data to reveal changes in consumer behavior, carriers’ reaction and the overall impact of the COVID-19 pandemic on the auto insurance industry. It also provides auto insurance carriers with trended insights to help improve their capabilities and competitiveness across the auto insurance lifecycle. “When we look at all of the 2020 auto insurance trends, we can see a pattern that comes from a series of disassociated events,” said Adam Pichon, vice president and general manager, auto insurance, LexisNexis Risk Solutions. “While the evolving impact of the pandemic is still unknown, understanding these trends and evaluating their projections can help insurers make better business decisions and more
confidently prepare for the future regardless of unexpected market turbulence.” The report looks at how consumer behavior and carrier business practices tied to the auto insurance policy lifecycle diverged in 2020 from the patterns we typically see―largely due to the influence of COVID-19. Auto Insurance Trends Highlights a Rollercoaster Year The auto insurance shopping data fluctuations were turbulent throughout 2020. However, year over year, 2020 shopping volumes closed 5.3% higher than 2019 with an annual year-end shop rate of 41%. Cyclical policy renewal patterns for many consumers were interrupted by the pandemic with new business policies written down 12.6% in April 2020 and 10.4% year over year. Even so, this unusual activity still prompted an overall net increase for 2020, bringing market retention to 83%. Empty roadways gave rise to dangerous driving behavior with a noted increase in high-speed in-
stances first observed in mid-March 2020 and that held at 10% higher than 2019 figures for the remainder of the year. New generational data illustrated an increase of Driving Under the Influence (DUI) violations among younger drivers―particularly those in the Generation Z age segment, with an approximate 50% increase in recorded violations in March and April of 2020. Collision claims decreased, but severity rose, much like the reduction in total miles driven, the volume of collisions and subsequent claims dropped considerably. Collision severity saw a 3.7% year-over-year increase in 2020. The trends identified in this year’s report highlight several opportunities for auto insurance carriers to improve their business operations regarding quoting, underwriting and claims, and prepare for any future disruptions. Source: LexisNexis
Axalta, a leading global supplier of liquid and powder coatings, on April 22 announced the launch of Axalta Mobility Coatings, a rebranding of its Transportation Coatings business unit. The redefined business will focus on supporting the accelerating demand for e-mobility and the evolving coatings needs of established and emerging light and commercial vehicle original equipment manufacturers (OEMs), fleet owners and shared mobility providers. As part of the rebranding, Axalta Mobility Coatings is unveiling a new solutions portfolio that brings together the best of Axalta’s experience and innovation into three categories: Core Mobility Solutions, Advanced Mobility Solutions and Axalta Advantage. For more information about Axalta Mobility Coatings, visit www.axalta.com. Source: Axalta
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Biden’s Emissions Pledge Comes with Economic Consequences, Experts Warn by Casey Harper, The Center Square
President Joe Biden is expected to announce a pledge April 22 to cut U.S. greenhouse gas emissions in half within less than a decade. Biden will announce the aggressive pledge, according to multiple reports, the same day the White House hosts dozens of world leaders for a virtual climate summit. The pledge would commit the U.S. to lower its emissions by 50% from 2005 levels by the year 2030. But critics were quick to point out flaws with the plan. “Based on currently available technology, there is no way to halve America’s emissions in such a short period of time without radically impacting our battered economy,” said Heather Reams, executive director of Citizens for Responsible Energy Solutions. “We know that by 2030, 90% of all new emissions will come from the developing world and China, so we need solutions that can be adopted as readily in India as in Indiana.” During the summit, which also falls on Earth Day, leaders will discuss a range of environmental and energy issues like coal power plants and carbon emissions. Though Biden has not made the formal announcement, his rhetoric on the campaign trail indicated he plans to take an aggressive stance on environmental issues. “As president, Biden will lead the world to address the climate emergency and lead through the power of example, by ensuring the U.S. achieves a 100% clean energy
economy and net-zero emissions no later than 2050,” Biden’s climate plan released during the presidential campaign says. “He will lead an effort to get every major country to ramp up the ambition of their domestic climate targets,” the plan adds. Biden’s pledge could devastate parts of the country reliant on fossil fuels for their livelihood. Wyoming and West Virginia have the most sig-
President Joe Biden. Credit: Shutterstock.
nificant coal producing capabilities, followed by Pennsylvania, Illinois and Kentucky. Those states produced about 500 million short tons of coal in 2019, more than 70% of the nation’s coal output. A short ton is equal to 2,000 pounds. “Last year during the COVID pandemic, the U.S. cut its emissions by 12% and we all know at what cost,” said Daniel Turner, founder of the energy workers advocacy group Power the Future. “Thousands of small businesses have been closed forever. Unemployment skyrocketed. Entire industries like airlines, hospitality, tourism, have been bankrupted.” Turner’s comments indicate the kind of opposition that Biden, and Democrats who support him, are likely to get from Republicans. Other critics say Americans can
expect widespread blackouts, higher energy prices and economic downturn if Biden’s plan is enacted. “The Biden-Harris administration’s reported second-round commitment under the unratified Paris climate treaty is preposterous and irresponsible,” said Myron Ebell, director of the Center on Energy & Environment for the Competitive Enterprise Institute. “Trying to cut greenhouse gas emissions by 50% below 2005 levels by 2030 would cause energy prices to skyrocket, make blackouts a common occurrence and lead to widespread energy poverty. Luckily, the Biden-Harris commitment is merely an expression of intention and with no legal basis.” Reports indicate the traditional fossil fuel industry supports a little less than 7 million U.S. jobs. Those jobs are often concentrated in certain pockets of the country, meaning a reduction in the fossil fuel industry could send entire cities and even regions into economic recession. “[Biden] will make sure those commitments are transparent and enforceable, and stop countries from cheating by using America’s economic leverage and power of example,” Biden’s campaign pledge reads. “He will fully integrate climate change into our foreign policy and national security strategies, as well as our approach to trade.” Those international relationships, though, are exactly what concerns many experts, who say China will use America’s restraint as an opportunity to gain an economic advantage. “We will forgo our American, domestic, reliable, inexpensive, abun-
dant energy to buy inferior Chinese products which are expensive and inefficient,” Turner said. “Meanwhile China continues to expand, build, grow it’s economy primarily through coal-fired plants and by expanding its production of oil and gas worldwide. China and Russia are thrilled that the American president is willing to punish his own country to achieve a globalist standard which they holistically ignore.” Making public pledges to world leaders will grab headlines and earn favor with the Democratic base, but critics say it will do little to change the reality on the ground without help from Capitol Hill. Biden will need Congressional support to enact the widespread changes needed to make his ambitious promises come to fruition. “We must count on widespread public opposition to convince enough Democrats in Congress to join with Republicans to defeat implementation of this grotesque power grab to cripple the American economy,” Ebell added. Biden does have allies among Democrats who are eager to get a win for the party’s base. Democrats on April 20 re-introduced the Green New Deal ahead of Biden’s summit, pushing for a total reworking of the nation’s spending as well as the energy industry. “Do we intend on sending a message to the Biden administration that we need to go bigger and bolder?” asked Rep. Alexandria Ocasio-Cortez, D-NY. “The answer is absolutely yes.” We thank The Center Square for reprint permission.
FTC Examines Anti-Competitive Repair Restrictions, Recommends Ways to Expand Consumers’ Options In a new report to Congress, the Federal Trade Commission (FTC) identified numerous types of repair restrictions, such as using adhesives that make parts difficult to replace, limiting the availability of spare parts and making diagnostic software unavailable. The report’s findings, including that “there is scant evidence to support manufacturers’ justifications for repair restrictions,” are primarily based on responses to the FTC’s requests for public comments and empirical re-
search issued in connection with its July 2019 workshop, “Nixing the Fix: A Workshop on Repair Restrictions.” The report explores means of expanding consumers’ repair options and how the FTC could assist in that expansion, consistent with its statutory authority. In addition, the FTC notes it stands ready to work with lawmakers, either at the state or federal level, to ensure consumers have choices when they need to repair products that they purchase and own. Congress directed the FTC to
44 JUNE 2021 AUTOBODY NEWS / autobodynews.com
issue the report, noting it “is aware of the FTC’s ongoing review of how manufacturers—in particular mobile phone and car manufacturers—may limit repairs by consumers and repair shops, and how those limitations may increase costs, limit choice and impact consumers’ rights under the Magnuson-Moss Warranty Act.” Congress specifically directed the FTC to include recommendations on how to best address these problems. The FTC voted 4-0 to authorize staff to send the report to Congress.
The FTC works to promote competition and to protect and educate consumers. Learn more about consumer topics and report scams, fraud and bad business practices online at ReportFraud.ftc.gov. Like the FTC on Facebook(link is external), follow on Twitter(link is external), get consumer alerts, read blogs and subscribe to press releases for the latest FTC news and resources. Source: FTC
Volkswagen Group Reports Strong Results in Q1 2021 by Mark Kane, Inside EVs
The Volkswagen Group, which includes Volkswagen, Audi, Porsche, Skoda, SEAT and more, reported quite strong business results in the first quarter of 2021. Let’s first take a look at general numbers and then focus on the plug-in electric car sales.
especially considering the semiconductor shortages. “We started the year with great momentum and are on a strong operational course,” said Herbert Diess, CEO of the Volkswagen Group. “This is clearly reflected in our positive quarterly figures. At the same time, we remain fully committed to our transformation
“Our successful e-offensive continues to gain momentum and we have significantly expanded it with attractive new models” — Herbert Diess, The group has increased its vehicle deliveries by 21.2% yearover-year to 2.4 million, compared to 2.0 million in Q1 2020. That’s 12.4% of global car sales. That allowed it to increase the revenues to $62.4 billion, up 13.2% year-over-year, but more importantly, the operating profits improved to $4.8 billion, which is 7.7% gross margin. The income after tax will be $3.4 billion—5.4% of revenues. It’s not a bad start to the year,
into a climate-neutral and software-driven mobility group. “Our successful e-offensive continues to gain momentum and we have significantly expanded it with attractive new models. We are also making good progress with the key topic of digitalization and have reached important milestones. There is still much more we can achieve in the remainder of the year.” The Volkswagen Group out-
lined four major areas of business: hardware, software, battery and charging as well as mobility and services. The software business is in its early investment phase, but over time it is expected to generate some income through licenses. Volkswagen Group plug-in car sales In Q1 2021, the Volkswagen Group delivered some 133,000 plug-in electric vehicles globally: • BEVs: about 59,948 (up 78.4% year-over-year) and 2.5% of the total volume • PHEVs: about 73,374 (up 178% year-over-year) and 3.05% of the total volume • Total: about 133,322 (up 122% year-over-year) and 5.56% of the total volume For comparison, in 2020 the group sold over 422,000 plug-ins. All-electric car sales by market: Europe: 42,421 (71%)
North America: 7,588 (13%) China: 6,244 (10%) Others: 3,695 (6%) Total: 59,948 All-electric car sales by brand: Volkswagen (cars): 30,735 (51%) Audi: 14,583 (24%) Porsche: 9,072 (15%) Skoda: 2,455 (4%) SEAT: 2,217 (4%) Volkswagen (commercial vehicles): 687 (1%) Other: 199 (near 0%) Total: 59,948 The top selling plug-in models were: BEVs: Volkswagen e-up!, Volkswagen ID.3 and Volkswagen ID.4, Audi e-tron, Audi e-tron Sportback and Porsche Taycan PHEVs: Volkswagen Golf hatchback, Volkswagen Passat Estate, Audi A3 Sport-back and Audi Q5, Skoda Octavia Combi, SEAT Leon Sportstourer and Porsche Cayenne We thank Inside EVs for reprint permission.
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Toyota Acquires Lyft’s Self-Driving Unit for More Than Half a Billion Dollars by Joey Klender, Teslarati
Toyota Motor Corporation will acquire Lyft’s self-driving unit, an announcement confirmed April 26. The cost of the deal is $550 million, and Toyota’s new Woven Planet division will handle the Japanese company’s automation ambitions. Lyft will receive $200 million in cash from Toyota up front, and the remaining $350 million of the deal will be paid over the next five years. “The transaction is also expected to remove $100 million of annualized non-GAAP operating expenses on a net basis—primarily from reduced R&D spend—which will accelerate Lyft’s path to Adjusted EBITDA profitability,” Lyft said in a press release. Toyota will not only acquire the self-driving unit, but the deal will also provide the automaker with Lyft’s 300 employees. “Not only will this transaction allow Lyft to focus on advancing our leading Autonomous platform and transportation network, this
partnership will help pull in our profitability timeline,” said John Zimmer, co-founder and president of Lyft. “Assuming the transaction
closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year.” Woven Planet Chief Executive James Kuffner told reporters April 27, “This is the first step of establishing and bringing together the people. Obviously, building technology and product requires people, and that’s much what this acquisition is about.” Kuffner is likely referencing the presence in Silicon Valley and London that Woven Planet will now have because of the acquisition. The partnership and could alleviate the issues that come with
the acquisition of a new company. Lyft’s advantages in the acquisition allow it to take a profit away from the development of self-driving technologies. Lyft hasn’t released its self-driving tech, which is aimed toward complete automation, known as Level 5 autonomy, but
it can give the rest of the tasks to Toyota while walking away with a hefty profit. Meanwhile, Toyota gains more experience and expertise in the self-driving sector through the acquisition. Toyota has Level 2 automation with advanced driver assistance tech. Level 2 describes “Partial Driving Automation” through Advanced Driver Assistance Systems.
“The vehicle can perform steering and acceleration. The human still monitors all tasks and can take control at any time,” according to Synopsys‘ breakdown of automation levels. Kuffner said Woven Planet will continue investing and growing its team but did not give any further details about acquisition plans or a timeline that would describe possible moves in the future. According to Reuters‘ coverage of the acquisition, Toyota will “likely make more deals, even if they do not ultimately lead to self-driving vehicles to ‘actively gather software and people who have knowledge.’” This is according to Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute. The transaction is expected to close in Q3 2021 and will be subjected to required regulatory approvals and other closing conditions. We thank Teslarati for reprint permission.
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Fossil Fuel Emergency: U.S. Races to Move Gasoline After a Pipeline Hack by Brad Bergan, Interesting Engineering
In an effort to delay the effects of a gasoline shortage and subsequent price spike on the East Coast, the Biden Administration just issued an order to enable overtime for some truck drivers moving gasoline, according to a May 9 declaration from the Department of Transportation. This comes in response to the shutdown of one of the country’s most critical fossil fuel pipelines following one of the largest cyberattacks on gas and oil infrastructure in American history. Fossil fuel shortage could affect the East Coast On May 7, Colonial Pipeline said it suffered a critical ransomware attack—forcing it to halt all operations while it worked to secure its IT architecture from hackers. Some of the company’s smaller pipelines have resumed service, but as of May 10, the pipeline’s main pathways were still shut down for an unspecified timeframe. “On May 7, the Colonial Pipeline Company learned it was the
victim of a cybersecurity attack. We have since determined that this incident involves ransomware,” read the statement from the fossil fuel company. “In response, we proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, and affected some of our IT systems.” The Department of Transportation (DOT) subsequently declared a state of emergency, following the shutdown, and waived requirements for drivers and motor carriers working to circumvent potential shortages from the pipeline shutdown. This means they can drive for more than 11 hours, the typical daily limit, in a collective effort to delay the potential fuel shortages that can happen, since Colonial’s pipeline network fuels roughly 45% of all gasoline on the East Coast. The DOT said the Colonial pipeline shutdown may create shortages of “gasoline, diesel, jet fuel and other refined petroleum products,” with overtime waivers effective in the following territories:
Virginia, Texas, Tennessee, South Carolina, Pennsylvania, Noth Carolina, New York, Mississippi, Maryland, Louisiana, Kentucky, Georgia, Florida, Delaware, the District of Columbia, Arkansas and Alabama.
gas. This is a big deal.” Especially since road and rail transport are far more expensive than pipelines—and there’s another caveat to extending road and rail-based supply lines for fossil fuel. Colonial’s pipeline is integral to the energy infrastructure of the U.S., stretching more than 5,000 miles and moving more than 2.5 million gallons of gasoline daily from refineries throughout the Gulf Coast to more than 50 million people on or near the East Coast. Several tanker trucks racing gasoline down a highThe shutdown comes while way under the sun. Credit: Rasica/iStock many are just starting to resume their normal transits to The East Coast could see pump work. If the pipeline doesn’t go online in the next several days, anprices spike in the coming week “This is the largest impact on the alysts have said fuel prices might energy system in the United States rise along the Eastern Seaboard, we’ve seen from a cyberattack, full with scattered shortages. stop,” said CEO Rob Lee of Dra- This was a breaking story and gos, an infrastructure-focused se- was regularly updated as new incurity firm, in a report from Wired. formation became available. “You have a real ability to impact the electric system in a broad way We thank Interesting Engineering by cutting the supply of natural for reprint permission.
Now is the Perfect Time to Sell or Trade Your Car: Kelley Blue Book If you have been considering selling or trading in your car anytime soon, now is the time to get serious. With low vehicle inventory on dealership lots, increased car-shopper demand and resulting high prices, the market conditions are prime for peak consumer profit for people selling their vehicle, according to Kelley Blue Book. Used-car prices are up 18% yearover-year, meaning a used car sitting in someone’s garage right now is currently worth on average nearly onefifth more than it was last year. Given the high-ticket prices of vehicles, that percentage can translate into quite a bit more cash lining a seller’s pockets. To view it another way, vehicles that were retaining 55% of their value a few months ago are fetching 60% to 65% of it now. The biggest factor contributing to the current market conditions is limited supply of used cars. According to data from vAuto, there are approximately 2.34 million used cars available in America today. That’s more than 530,000 fewer than just one year ago in 2020, and about 430,000 less than during the same period in a
more normal 2019. These circumstances point to a huge opportunity for people thinking about selling or trading in their current vehicle. “There has never been a much better time to sell or trade in your car than right now during this strong seller’s market,” said Matt DeLorenzo, senior managing editor for Kelley Blue Book. “Dealerships are seeking more used-car inventory, and prices are reaching sky high. If you’re in a position to sell, it’s a great time to command top dollar for your old car. And if you’re trading in your vehicle to purchase a new one, the increased value of your used car will help take some of the sting out of the higher price you’re likely to pay when purchasing a car in these market conditions.” Consumers who want to buy a car right now are facing some tough times. Prices are high, supply is low and the forces that could change these conditions are caught up in a perfect storm of complex factors. A worldwide microchip shortage has severely limited new-car production, and the COVID-19 pandemic has triggered many people to look
for an inexpensive car rather than use public transit for their daily commute. Dealerships have fewer used vehicles to offer right now, but people are still buying cars and the demand is growing. Increased vaccinations are leading to the world slowly reopening, and when combined with boosted disposable income from government stimulus programs designed to kickstart the economy, people are shopping for cars again in droves. “America may be slowly returning to some semblance of normal, but the car market isn’t,” said DeLorenzo. “This means that people’s prior car-shopping experiences will not be able to tell them exactly how to handle this market. If consumers are even able to find the vehicle they want right now, they need to be prepared and understand they’re likely going to pay more for it than they probably thought they would. “With demand high and supply low, manufacturers aren’t offering as many discounts as people are accustomed to seeing; without available incentives, dealerships aren’t able to negotiate as much. And we don’t expect this to change much anytime
soon—it’s going to be a lean market for quite some time.” Understanding what your car is worth when selling or trading in, and what you should expect to pay when you’re buying a new or used car, can ensure you get the most for your money in either situation. Before selling or trading in a used car, consumers should research the trusted Blue Book Value® of their vehicle. Prior to purchasing any new or used vehicle, experts recommend that car shoppers check out the Fair Purchase Price range for that specific model on KBB.com. Based on thousands of data points and updated weekly to factor in changing market conditions, Kelley Blue Book’s Fair Purchase Price helps people understand what they should realistically expect to pay for that particular vehicle in their local area. For more information about the timing of buying, selling and trading in cars given the current related market conditions, visit https://www.kbb. com/car-advice/is-now-the-time-tobuy-sell-or-trade-in-a-used-car/ Source: Kelley Blue Book
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