facebooktwitterlinkedinyoutube

Understanding bodyshop networks in a consolidating market

Understanding bodyshop networks in a consolidating market

Today’s collision industry is facing several disruptive trends. These are fundamentally changing its structure, shifting workflow and impacting revenue. Bart De Groof, Axalta’s Commercial Director of Refinish for Europe, Middle East and Africa, asks, are bodyshops ready?

The collision industry is in a state of flux. The balance of power is changing. This shift will likely have a significant financial effect on a business. In an already pressurised sector, it could be terminal for bodyshops who either have not seen it coming or who have been too slow to react.

“An impactful trend disrupting the industry is the increasing influence of different types of networks. Many bodyshops across our region have been reluctant to engage with these growing national and international networks. To keep pace with the challenges of a consolidating industry, it is in a bodyshop’s best-interest to engage proactively with these groups and to understand their value proposition completely,” says Bart De Groof, Axalta’s Commercial Director of Refinish for Europe, Middle East and Africa.

What do networks do?

Networks are umbrella entities under which bodyshops are grouped. They often do a lot more than simply take care of one aspect of a repair. Some only manage the repair process while others manage the entire claims process on behalf of insurance, lease and rental companies. These companies and their partners increasingly influence the volume of repairs being steered towards specific bodyshops.

“The most active, successful and strong networks in our region are in the business of repair process management. They provide an end-to-end service. That means everything from taking the first notice of loss and selecting the best-fit repairer, to the financial settlement of the repair and delivery of the vehicle. Throughout the entire process, transparency with all stakeholders is guaranteed. This ensures customer satisfaction at every point of the repair journey,” De Groof explains.

Networks mitigate complaints and help to find solutions for quality or service issues during the claim and repair process. On top of this, networks also provide active support to bodyshops to improve their performance in a competitive market. They benchmark results, measure relevant KPIs and provide insight to repairers on how to improve performance. Networks also offer technical and sales training. They prepare their bodyshops for future automotive technologies, including electric, hybrid and connected vehicles.

Different types of networks

Franchised networks represent a larger group or brand. Bodyshops – the franchisees - in these groups share the same identity as the franchisor and are able to provide strong consistency in pricing and service across all sites. This consistency is essential to the franchisor’s value proposition. The bodyshops will typically generate a large part of their volume through relationships secured by the franchisor.

Loyalty networks are set up by suppliers to create stronger bonds with their key clients. These groups are increasingly moving towards more commercial network structures. Seeking ways to add value and services to loyal members, they are investing more in the consultancy space. They are also representing their members with insurers and work providers to generate extra repair volume for the bodyshops.

“Axalta’s loyalty networks are experiencing volume growth and increased market share. This is a trend we are monitoring closely, but it underscores the strength that Axalta brings to a partnership,” adds De Groof.

Independent accident management networks tend to manage the entire claims process. This complete end-to-end approach is atypical for most networks. De Groof explains, “The networks that own the entire claims journey have the strongest grip on repair volumes. They will steer more work to better performing shops in order to make sure that the expectations of their client – the insurer - are met.”

Lastly, there are the risk carrier networks. These networks are managed by the insurance, lease and rental companies themselves. As they are liable for the risk and customer satisfaction, they will select bodyshops that are able to serve their customers in a professional way. Repairers in these networks must understand what is important for the work provider and deliver on those needs.

Action not inertia

“The network landscape is complex, that’s undeniable, and for some bodyshops it may be daunting. Bodyshops have to come to terms with the role networks are playing in the repair process. Those with growth ambitions must engage with the companies that aggregate work,” De Groof says.

To do that, bodyshops must consider their presence in the market. They should proactively increase their attractiveness to different types of work providers as work is sent mostly to the best performing bodyshops.

“These days, it’s all about a quality repair at the right cost, and a customer experience that exceeds expectations. Insurers, for example, strongly believe the repair is a moment of truth in the relationship with the policy holder. They want every driver to be happy with their repair and the experience. Often, they expect other networks to take responsibility for delivering that,” De Groof says.

On one hand, independent bodyshops are going to struggle to represent themselves with large work providers. On the other, insurers, lease and rental companies are increasingly outsourcing the network management activity. Therefore, the role for networks in the collision industry is a valid one. “By exploring these new models of collaboration, bodyshops can help secure future work and future growth,” says De Groof.

Strength in numbers

National networks are becoming more powerful. The networks whose reach extends across multiple borders are truly forces to be reckoned with in the region.

“Networks in the collision industry are here to stay, there is little doubt about that. So bodyshops have a decision to make: embrace the trend or become victims of it. Opportunities for growth in this highly volatile sector means coming to terms with a ‘new normal’. There is strength in numbers, so make the most of it,” says De Groof.

For more information about Axalta Refinish, please visit

www.refinish.axalta.eu.