CRA Market News – USA
By John Huetter
Caliber Collision on Tuesday described a vision of treating a market as “one giant body shop” instead of numerous individual ones.
Supply chain strategy and procurement Senior Vice President Dave Smith presented the Auto Insurance USA 2020 audience with a slide describing Caliber’s segmentation strategy. It discussed a “Dense cluster of shops” with dedicated Express, Non-Drive and Luxury centers and “OE certified coverage by market.”
According to the slide, the Non-Drive facilities tackled the “Most complex repairs,” which is logical. But they also offered “Centralized total loss handling.”
Smith said Caliber would also route aluminum repair to specific shops given the expense of equipping a facility with that capability. “We can balance that out,” he said.
The company also offered specific advanced driver assistance system calibration centers and Caliber Auto Glass facilities.
However, Caliber’s segmentation was not absolute. Smith’s slide said all Caliber locations include pre- and post-repair scanning. They’re also all I-CAR Gold Class, and Caliber demands “I-CAR Welding certification for all technicians, Center and Regional Managers.” (The slide didn’t elaborate which of I-CAR’s three separate welding certifications were mandated or if both nonstructural and structural technicians carried those credentials.)
Smith presented another slide showing how Caliber segmented the San Antonio, Texas, market. The map showed 23 shops. One was an Express center. One was a luxury location, which the previous slide defined as a Caliber facility specializing in “Hi-Line coverage, such as MBZ, Audi, BMW, etc.” Two facilities were Non-Drive sites. Four of the shops, including one of the Non-Drive facilities housed Protech calibration stations. Two shops were classified as an “Advanced Material Center,” though Caliber didn’t define which substrates it considered advanced.
“This is what everyone is gonna have to think about from a network,” Smith said.
Quality, not geography, should be considered, Smith said. It’s possible that Caliber might have to move a vehicle to the right center, or ask the customer to do so.
Obviously, the typical repairer might not own 23 shops within a metropolitan area. Focus Advisors recently estimated that only about 125 businesses in the industry own four or more locations. But the Caliber segmentation discussion matters even to a single-shop operation as well for a couple of reasons.
First, it’s free perspective on a potential future industry trend and a look at a significant competitor’s strategy.
Second, it also describes qualities that Caliber includes in its shops regardless of its segmentation in a market. This arguably creates a benchmark for competing shops as well. Is your facility set up to pre- and post-scan vehicles? Are you I-CAR Gold Class? Are your technicians and managers carrying I-CAR welding certification? If not, it could be harder to pitch yourself to customers if the Caliber next door boasts such traits — to say nothing of the potential for your shop to have more difficulty with repairs.
As of the end of 2019, 8,359 collision repairers held Gold Class status, up 23 percent from 2018. Yet the collision repair industry has more than 30,000 shops.
I-CAR CEO John Van Alstyne in January 2019 projected about 46 percent of technicians who welded steel in 2018 still weren’t I-CAR trained, though he said this represented “a big improvement over where we were.” About 69 percent of techs who welded in 2013 lacked I-CAR training, the organization estimated.
Reuters Events Auto Insurance USA 2020, July 28, 2020
The Caliber Collision logo is shown. (Provided by Caliber Collision/PRNewsFoto)
Caliber Collision on July 28, 2020, showed the Auto Insurance USA 2020 conference how it segmented the San Antonio, Texas, market. (Caliber Collision slide; screenshot from Reuters Events video)