Where will the collision repair industry be in 2035?
That daunting question was tackled this spring by the Future Disruptions Committee at the Collision Industry Conference (CIC). As the panel discussion began, Sean Carey of SCG Management Consultants pointed to a weakness in the exercise itself.
“Rather than take yourself forward 14 years, take yourself back 14 years,” Carey suggested.
Think about comparing a 14-year-old Honda Accord to a current Honda Accord, he said: the differences in the vehicle itself, in the repair procedures used, in how estimating is done and how the entire claim is settled.
“It was vastly different from where we are today, and in 14 years it will be vastly different again,” Carey said. “It’s not always easy to conceive what’s going to happen in the future. We’re guessing at best.”
With that preface, Carey said he foresees “mass consolidation” in the industry, with the formation of at least one cross-functional entity that includes an insurance company, technology companies and a large repairer group---its “own ecosystem.”
“From a moment that vehicle is in an incident, this organization, under one single ownership, takes care of everything,” Carey said. “Data is going to make that very, very possible.”
Direct repair and OEM certified shop networks will give way to licensed shops, each “capable of repairing only particular types of vehicles,” he said. “This mainstream, ‘bring it all in on Monday, we’ll ship it all out by Friday,’ will be a thing of the past. [Vehicles] will not be allowed to go to an unlicensed shop.”
There will be far fewer vehicle repairs, but what there are will be very costly, he predicted.
“Severity will climb through the roof,” he said. “Severity today will seem laughable. Think tens of thousands, not two or three thousand, and shaving an hour here or a procedure there. These things are going to cost a lot to repair.”
Other speakers agreed the repairer-insurer-OEM dynamic will change significantly by 2035.
“One of the things I foresee has been happening outside of our country for many years,” said Frank Terlep, co-chairman of the Future Disruptions Committee. “When you buy a new vehicle in 2035, you will be getting your insurance with the vehicle. That’s going to change the model.”
Jimmy Spears, a former executive at USAA who is now with Tractable, agreed the line between automaker and insurer will blur or be eliminated entirely.
“Look at how you have Tesla Insurance, or Onstar Insurance from General Motors,” Spears said. “You’ll probably have a vertical that will take care of that customer much, much better than [separate companies] that don’t have the incentives to work together.”
Terlep said the added cost of vehicle safety systems will have led to more vehicles being declared total losses, with the repairable vehicle count dropping “as much as 30 or 40%.”
“You’re going to have to be a licensed professional to get access to those safety systems,” Terlep added. “A lot of people don’t want to hear that, but I just don’t see the OEMs and the government releasing direct access to all the safety systems.”
Committee co-chairman Jake Rodenroth agreed.
“You have to be licensed to cut hair but not to calibrate ADAS or cut panels off cars or work on electric vehicles,” he said. “That’s got to change.”
Several speakers agreed by 2035, accessing OEM repair information will be less “clunky” and time consuming, no longer requiring use of multiple websites.
“So in 2035, my prediction is the procedures will be living with the vehicle,” Terlep said. “You’ll be looking in the vehicle for those procedures, not on someone else’s website. The repair procedures will be presented to you based on sensors in the vehicle that will know: These areas are damaged.”
Rodenroth agreed, noting collision repairers are not the only ones needing easier access to the information.
“There are first-responders who need to know where they can cut a vehicle, where they can’t cut one. There are tow truck drivers who need to know how to safely tow a vehicle. They’re all in a race against time,” Rodenroth said. “They don’t have time to flip a book, or go through an app or even to ask Siri. They need to have it easily accessible and immediate. Maybe it’s a combination of on the vehicle infotainment screen or on a handheld as they walk toward the car. But it’s got to be instant."
Also in the future, Terlep foresees more use of remote technicians, even those in other countries, for diagnosis and electronic work, given the shortage of technicians here.
Rodenroth said he recommends the industry start recruiting “the tuner kids,” those who can customize a vehicle “to turbocharge it or create a bigger engine and push more fuel and air.”
“They understand how the [vehicle] network works before they change it,” he said. “So when you bring them in, don’t ask them body shop questions. Ask them about how they feel about electronics and wiring diagrams, how immobilizers work and things like that. You’ll see some of them explode. I met one yesterday when I picked up a rental car. This kid was sharp. That’s the future technician right there.”
John Yoswick