Experts say the coronavirus is having a devastating impact on the automotive incident repair industry in three key areas – parts supply, cash flow and mobility says UK industry consultant Mark Hadaway.
That was the conclusion of a free webinar hosted by ARC360, in association with I Love Claims, on Wednesday (25 March 2020) afternoon.
Taking part in the free-to-access webinar was Chris Weeks, NBRA executive director; Richard Steer, CEO of Steer Automotive Group; and Greg Cole, claims director, Aioi Nissay Dowa.
All are on the frontline of the automotive incident repair industry and all agreed that since Boris Johnson put the country into semi-lockdown on Monday, parts supply had almost immediately overtaken volume and staff absenteeism as the number one concern.
Chris said, ‘Parts have dried up almost overnight, and those suppliers that aren’t closed are likely to close by Friday (27 March 2020). It’s the biggest problem right now amongst repairers.’
Richard agreed, saying he had seen a drastic change since Monday with about 40 companies in Steer Automotive Group’s supply chain suspending trading. He said repair over replace was an option being considered wherever possible, but to make it more viable they needed much more guidance from insurers as to what parts they could use, and in what repairs.
Meanwhile, Richard also urged greater speed of transaction in a bid to keep bodyshops open.
He said, ‘Cash will be king. We need to be allowed to get the finished jobs authorised and invoiced, and let’s get the invoices paid as soon as possible.’
Chris added, ‘If bodyshops try to trade through this period with all their usual overheads but only 50% of revenue they will be operating at a loss. If you wind the clock forward a few months it’s inevitable some bodyshops will have closed down, meaning we’re going to have a supply and demand problem – as if we don’t have one now.’
He encouraged insurers to make a ‘brave’ move to support their bodyshops.
Greg said cooperation was vital at this time and insurers recognised their reliance on their supply chains, but insisted the same challenges were being faced across the board.
He said, ‘Yesterday we saw a 70% reduction in claims. That was backed up by mileage data from our telematics devices. We expect that to increase going forward. We’re also facing similar issues around parts supply. It’s having a massive impact on insurers because we’re not sure how we deal with immobile vehicles if we have nowhere to take them. This has really drummed home the inter-dependency, and ultimately we want a sustainable supply chain at the end of this.’
When that will be and what it will look like is anyone’s guess, but Richard believed the industry will be forever changed.
He said, ‘This is a war without the bombs and bullets, with no winners, only survivors. Whatever normal was, I don’t think we’ll see it again. This will reset the whole industry.’
Meanwhile, ARC360 in association with I Love Claims has announced it will continue to host free webinars on Wednesdays to provide a communications platform for the industry during the coronavirus crisis.
Co-founder Mark Hadaway said, ‘None of us have been here before, so it’s a learning curve for everyone. We want to engage with the industry and keep these vital conversations going.’ For a full recording of the webinar, visit here.