Connected Cars, Connected Shops
The future belongs to those that control the data.
Connected vehicles are about to change the collision repair landscape dramatically. While there are only a handful of connected cars on the road today, within four years, it is predicted they will comprise about 90 percent of new vehicles on the road.
“We are going to know everything about that collision before the glass hits the ground,” says Jeff Labanovich, Director, Head of Operations, CARSTAR.
“We are looking at living in an age where the vehicle has a good understanding of the damage it has sustained.” Labanovich notes that following a collision, two events will happen simultaneously—the instant first notice of loss to the insurance company, eliminating the traditional lag time of notification, and notification of an appropriate repair facility.
“This is where collision shops need to be highly aware of the fact that in today’s world, technology can identify for the insurers, which is the right repair facility for this particular vehicle—the right collision repair facility to fix the right car at the right time.”
Jack Rozint, Vice President of Sales and Service, Repair for the Auto Physical Damage Business unit of Mitchell International notes that all “OEMs are building connected car strategies and want to be in close contact with the vehicle owner throughout the car’s lifecycle, and that includes collision events that do happen from time to time.”
Historically, because those events, on average, only happen every seven years, collision repairs traditionally haven’t been as much of a focus for OEMs.
What OEMs have found through research, however, is that when there is a bad experience during a collision repair, 60 percent of those people will sell their vehicle within one year of that event, and 60 percent of that group will change brands because they associate the bad experience of the collision repair with the brand.
“There is more visibility into the capabilities of shops today,” says Jeff Labanovich. “When you look at OEM certifications, the automakers play a very big role in validating whether a store does or does not have the credentials to make the repair.”
Andy Neufeld, National Director of Operations, Canada for Fix Automotive Network notes that as an industry, “we’re at the point with technology that insurance companies can [depending on the vehicle involved in the collision] quickly determine who has the training, the capability and the certification to carry out the repair.”
Neufeld sees some competing scenarios developing. “The insurance companies want the car fixed correctly, while the OEMs are focused on gaining control of the vehicle, so they can influence every part of the entire process to ensure the customer has a positive experience.” To some degree, we’ve already seen this happen with General Motors OnStar. “There is a third-party operator involved, but it is immediate,” says Neufeld.
Neufeld notes that for collision repair networks, depending on how connectivity rolls out, “if we can be the collision provider of choice, and if the customer determines which shop they go to, that’s good for us and shops with good reputations.” As far as OEMs are concerned, however, their focus is maintaining the customer relationship. “They want to have the first crack at it,” says Neufeld. “They want to maintain that relationship, so if your shop is brand certified, you will be the one notified, if you are deemed the closest qualified shop in the area.”
Ultimately, it depends on who controls the information. The OEMs think it should be them, the Insurers also think they should be in control, and the customers believe they own the information. The government has yet to weigh in and decide who should own this information.
“There are three schools of opinion on how this will play out,” says Mitchell’s Jack Rozint.
These scenarios are:
- The OEMs will capture a very high percentage of repairs and direct them to their network of shops, which is going to be a very different network of repair facilities with a different agenda to fix the car.
- The OEMs are going to capture a much higher percentage of early conversations, and will recognize that working together with the insurance companies makes a lot of sense. Most automakers don’t write insurance policies, so if they can work together with the insurance companies to come up with a hybrid program that meets OEM needs for a proper repair and meets the insurer’s need for controlling their loss cost, those hybrid networks might be the right way to go.
- The insurance industry is still going to control things through their advertising and smartphone apps and by doing so, they will continue to dominate most of the repair business.
“If the OEMs own the information, being certified by them is going to play a key part,” says Fix Auto’s Andy Neufeld. “At FixAuto we are going the route of CCIAP certification. It’s all the same criteria as the OEM programs, it’s just more of a blanket coverage. All of our Fix-Autos in Canada are registered with CCIAP (Canadian Collision Industry Accreditation Program), and a handful have already completed the program.”
Jack Rozint adds that “for many of the OEMs I have spoken with, connectivity means that when a connected car is involved in a collision event, either via crash data or the deployment of airbags, that vehicle knows very well that a crash has happened. As a result, the OEMs that have collision repair networks can immediately contact the vehicle owner, either through the head unit in the vehicle or a phone call to their cell phone and get the vehicle owner off to a good start right from the beginning.”
There was a video produced a few years ago by Kristin Felder of Collision Hub, (Virtual Steering, The Future of Automotive Collision Claims— available on YouTube) and it shows the head unit of the vehicle lighting up right after a collision event. The operator comes on and asks the driver, “Are you OK? Our sensor indicated you were just in a collision.” The man is seated in his car with a deflated airbag, is stable and can immediately engage in a conversation.
“That video has gone from being someone’s vision of the future to being implemented today,” adds Rozint. “The connected car is going to know about the accident before the consumer can reach for their phone and call their insurance company. The data on that collision event is already on the servers at the OEM.”