Investment Strategy

Investment Strategy
J.R. Martino is General Manager of Budds’ Collision, one of the most progressive facilities of its kind in North America. He can be reached at jrmartino@buddscollision.com (Photo : J.R. Martino)

There are many factors to consider when shopping for equipment

When it comes to selecting tools and equipment for your shop, any decision to do so cannot be taken lightly. The complexity of modern vehicle construction and the repair procedures required mean that often, shops will be faced with the decision of acquiring specific tooling to fix specific vehicles from a specific OEM.

Many OEMs work with specific equipment vendors, whose equipment is certified for repair procedures from a particular vehicle or vehicle manufacturer.

Making a commitment

From a shop perspective, this is designed to ensure a commitment from the collision centre for investing to work with that specific OEM who will likely send a lot of business to that shop which makes the investment.

Doing it this way helps to weed out shops that are not committed to specific OEMs and their vehicles as well as those that aren’t committed to making the right investments in equipment and training to ensure repairs are completed properly.

Yet it can be difficult for shops to decide which OEM to work with and which equipment investments to make, especially if they are just starting out with certification programs. And as repair complexity continues to increase, one business model that’s likely to become more commonplace is vehicle or brand specialization. This can often be driven by location, customer demographics and the OEMs and dealers the shop tends to work with on a regular basis.

There are already a number of collision centres that focus on one or two specific brands—two I can think of are a shop in North Toronto that does exclusively Hyundai and Toyota and another in our area that strictly handles Mercedes-Benz vehicles. Both shops do a lot of volume and are very successful.

In some cases, if the shop has traditionally worked on all makes and models—provided it has the right employee mix and training and has already developed a plan for multiple certifications and is able to make the required investments—a strategy that focuses on multiple brands can still be effective.

One at a time

Alternatively, the option is to start with one certification program at a time and look for commonalities between some of the brands of vehicles you repair. An example might be that if you are seeing a number of Teslas coming through your store, it would likely make sense to assess and make the commitment to Tesla’s certification program. Then, because of the equipment and training investments required for aluminum repairs and dealing with high voltage electrical systems on Tesla vehicles, there could be commonality with Jaguar and Land Rover models, so investing to certify with JLR’s program might make sense as well.

The main thing when you’re looking to make investments in tooling and equipment and OEM certifications is to develop a five-year plan and see what potential opportunities maybe available and also the frequency of repairs you perform on specific brand vehicles. This will dictate the investments you make in tooling and equipment, staff development and training and also facility maintenance and upkeep. At the end of the day, the essential thing is having a plan and being able to execute it.

 

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