Fewer Models

Fewer Models
Does specializing in specific brands make sense for MSOs? (Photo: Huw Evans)

Will opting to repair fewer marques secure the future of shops working under an MSO umbrella?

Today, OEMs see themselves as not just in the business of manufacturing vehicles, but creating wholesome experiences for their customers. Fuel Economy and safety regulations in particular have driven vehicle complexity to new heights. And, in order to protect their brand and create the desired ownership experience, OEMs are increasingly taking an active role in how their vehicles are repaired following a collision.

Paul Prochilo, CEO, Simplicity Car Care, compares current and future collision centres to hospitals for vehicles. “We need to triage the repair to discover the extent of the damage, conduct X-rays (frame measurements and scanning), to determine what a holistic solution is for the vehicle and also ensure that procedures are followed, just as a doctor would be expected to.” The aim, like successful surgery for a patient, is to deliver a safe and reliable repair.

Should MSOs opt forbrand specialization?

Collision centres today are extremely wary of touching vehicles if they are not OEM certified even though they are often capable of completing repairs properly. With a wider coverage through multiple store locations, MSOs have a better opportunity to diversify and specialize. Representatives of major MSOs in Canada agree that specialization makes a lot of sense to keep thriving in the current environment.

“It makes good sense as specialized equipment, training and maybe even a different level of customer service are required because of the expectations set out by high end dealers,” says Bill Davidge, Director, OEM Strategy and Equipment, CARSTAR.

Paul Prochilo further expands on this idea, noting that brand specialization can be helpful for MSOs especially if shops can load level the specialized repairs from alternate locations to help assist in the ROI of the specialized facility. He adds, however, that the investment necessary for specializing in luxury brands is not for the “faint of heart.” “In my opinion, the challenge lies in how to monetize the luxury repair capacity and ensure you are receiving enough support to deliver the desired ROI,” says Prochilo. “An MSO is better positioned to leverage its abilities, but an independent could definitely be successful as well.”

Andrew Neufeld, Director of Operations at Fix Auto Canada, points out that the decision to specialize depends on the goals of the company, locations of the shops and whether the market has the scope for it. “The cost of each certification program is usually quite expensive in terms of upgrading equipment, the actual cost of the program itself, and ongoing training. To be everything to everyone is becoming less and less of an opportunity,” he explains.

A different perspective

Not equipping every shop to fix everything might be the best play for scheduling and keeping costs down for MSOs. The industry has to consider the fact that OEMs will be more connected to their vehicles in the future, having control of the first notice of loss, which was traditionally the role of insurers. Neufeld, however, suggests a different kind of specialization for MSOs instead of targeting brands. “One shop can be aluminum-capable, and another can be set up for more fast-lane jobs such as 15 hours or less. Another can be set up for more structural replacements and repair,” he says. Specializing in this way as opposed to specific OEMs might actually be a better model for MSOs. What is the best way to do this? “We want our shops to stay current and be best in class when it comes to repairing vehicles safely and properly. So, we don’t necessarily have to go down the road of being OEM certified for every brand,” notes Neufeld.

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