Noelle Simons, General Manager, Car Craft Group has sent the following report on business conditions. ‘In Western Australia 2014 started much as 2013 concluded. Each year there has been an expectation that some businesses would not re-open after the Christmas break; however, as in other years, this has not eventuated. All but a very few have returned hoping things may improve down the track. Perhaps those that are struggling will rethink things at the end of the financial year.
Many in the WA industry are very quiet for all the usual reasons, including fewer accidents with minor damage. But the biggest impact is from work being re-directed to businesses that have arrangements with insurance companies. One of the biggest impacts has come from the IAG (SGIO in WA) allocation of the Preferred Repairer Network contracts. The SGIO repairer numbers were reduced following the RFP from around 60 to 19 in Perth and this has shifted the demographics considerably. Those who have a badge are seeing their workshops overflowing with repair work at the expense of those that don’t. Although RAC has committed to continuing to work with a large number body repair businesses in WA they still see the advantages of working closely with a few where they guarantee volume for an agreed average repair cost.
There are obvious advantages for insurers and their body repair partners in the strategy of creating closer relationships with fewer businesses but there are casualties as a result. This makes for commercial uncertainties for those without an agreement regarding future viability and results in reluctance to make spending decisions.
In late January 2014 a meeting was held at Car Craft offices with parts distributors, dealer principles and parts manager from the Car Craft Preferred Supplier network to discuss the inroads being made by parallel parts into the smash repair industry. Car Craft has always supported the OE suppliers unfortunately their existence in the market is being challenged by the parallel importers.
The meeting was attended by approximately 50 people and although there was no conclusive outcome, Car Craft intends to continue the discussion with the manufacturers next time.
Capital Smart opened its second repair centre in Osborne Park prior to Christmas and at this stage there is no word on how it’s affecting the surrounding businesses. There is no doubt that the effects will be felt. The Gemini group has expanded in WA, buying Port Kennedy Car Craft and Cockburn Car Craft. Andy Hopkins from Gemini says that they are currently at various stages of negotiation with another 10 businesses in WA so we can expect further businesses changing to apple green during the year.’