Industry reform on the 2010 agenda

This year is set to see the autobody repairers, backed by the various state-based motor traders associations, take on the insurers.

NRMA Insurance was exposed to some unwanted media coverage when it’s third party cash settlements scheme was in the lime-light in a series of television stories which aired towards the end of the year.

And according to the NSW Motor Traders Association, the review of the Motor Vehicle Insurance and Repair Industry Code of Conduct has revealed a number of serious issues. So serious, says the MTA, that it is calling for the industry to be reformed.

That, while not an impossible task, will take some time to bring to reality, and only if all states were singing from the same song book.

This reform need not to just consider payment for services rendered. It would need to look at a whole raft of issues which many in the industry see as being constrictive and obstructive.

Issues will include steering clients to insurers’ repairers rather than letting the vehicle owner decide where the repairs will be effected, and the two quotes or tendering system which sees prices forced down as hungry panel beaters take the hammer to the price to ensure workflow through their shops.

Most importantly, any reform of the industry would have to take a good, close look at duty of care. Where will the buck stop?

Insurers are always looking to reduce the cost of repair and maximise the business profits for their shareholders – that’s business.

Repairers are always looking to ensure what they charge to repair a car will cover costs, wages and make them a profit - that, too, is business.

In the middle is a compromise which both sides need to acknowledge, but safety, and a duty of care, are very important factors in this equation.

When an insurer offers a fixed amount for a part or product used in the repair process that does not cover the cost of an original part, the repairer has two choices. They can take a cheaper, after market product for the price offered, or that can use an OEM part and wear the cost of the difference.

Should the cheaper, after market part be used, then the vehicle is not restored to its OEM condition, and should that part fail, who carries the responsibility?

Perhaps one of the biggest challenges facing the industry as we enter 2010 is the ability to enforce, effectively, the MVIRI Code of Conduct.

Organisations like the MTA will continue to push this Code, and in doing so, push for a better deal for panelshop operators.

This needs to be a national push if it is going to be effective. It needs to see cohesion between the states and it needs to see cohesion between shop owners  within states and regions.

Too often people attend meetings, discuss problems, formulate solutions, think about an action plans and then go back to the panelshop and keep on doing what they’ve always done.

The minority are left to try and implement actions that the majority might agree with, but seem reluctant to act upon.
If that majority, back in their panelshops, want to see real and long lasting change to their industry, then they too must get involved; join and be part of the actions taken by their local motor traders association so that the industry can plan and negotiate with one, common voice and purpose.