Recycled, Rebuild & Aftermarket Parts Constitutes More Than 30 Percent Of Repair Appraisals
Mitchell International, Inc. has recently released its Industry Trend Report for the first quarter of 2014. The Auto Physical Damage edition quarterly report includes feature articles about the collision repair industry, facts, current events, market reports and Mitchell collision repair industry data.
Among that data is the company’s numbers on the use of recycled auto parts in repairs in Quarter Four (Q4) of 2013. The report showed recycled parts consisted of 13.1 percent of the average parts dollars used per appraisal during that part of the year. This didn’t change from Q4 of 2012. In fact, the use of recycled parts used per appraisals has been between 12 and a little more than 13 percent since Q2 of 2011.
In comparison the ITR showed OEM parts represented 66.22 percent of all dollars specified by Mitchell-equipped estimators, 14 percent of appraisals were for aftermarket parts and remanufactured parts represent only 6.7 percent of the average gross parts dollars used in appraisals during Q4 2013.
The editors did note that it is commonly understood within the collision repair and insurance industries that a very large number of recycled “parts” are actually “parts-assemblies” (such as doors, which in fact include numerous attached parts and pieces). Thus, attempting to make discrete comparisons between the average number of recycled and any other parts types used per estimate may be difficult and inaccurate.
The report also showed that the number of new OEM parts per repairable estimate decreased in Q4 2014. Interestingly enough, even though new parts decreased, alternative parts did not increase, suggesting that paintless dent repair and conventional bodywork increased. Repairing panels, rather than replacing them, is often more cost effective.
The Auto Physical Damage edition already featured an article by Greg Horn, vice president of industry relations, titled, “Do Lower Labor Rates Lead to More Repair?” Horn derives three main conclusions from all repairable first-party collision estimates on passenger cars in 2013 for all 50 states:
- Lower labor rates do not mean additional operations written on the estimate
- Lower labor rates do mean more panel repairing occurs
- Lower labor rates does not translate into additional refinish hours
“The discussion of disparity in labor rates is always very lively, and the analysis of data and my fact-based conclusions draws many responses from collision repairers,” said Horn. “The data we look at represents labor rates from shops that do and do not participate in Direct Repair Programs, so it provides a thorough glance at rates in various states.”
Labor rates are valuable for shop billing and the statements are just one aspect of a shop’s interactions with its customers. The overall experience, which typically encompasses service delivery, shop quality and service, and communications regarding a repair, has an impact on a shop’s overall reputation. The bonus article, by Brian Doyle, customer experience product manager for Mitchell’s Auto Physical Damage Solutions, discusses the importance of a shop’s Net Promoter Score and how to effectively gauge customer loyalty.
The ITR also featured a bonus report, “How valuable is your reputation? Customer loyalty in the digital era,” by Bryan Doyle, product manager, Customer Experience, Mitchell Auto Physical Damage.
The complete report can be viewed and downloaded from the company’s home page, www.mitchell.com. The report provides crucial data to insurance carriers, payers, collision repair shops and other key constituents in the collision repair industries. Mitchell highlights its own proprietary data, along with JD Power data, to give insights into market drivers that affect how shops work and interact with customers, and outline how insurers can reduce inefficiencies within various business processes.
Mitchell’s solutions provide an expert level of decision support and connectivity within the claims organization and with industry partners to achieve optimal outcomes. Mitchell’s comprehensive solution portfolio and robust SaaS infrastructure enables tens of millions of electronic transactions to be processed each month for more than 300 insurance companies, including the majority of the top 25 insurance carriers, and more than 30,000 collision repair facilities. With an expanding global footprint, Mitchell products are currently utilized in the Americas, Europe and Asia. Mitchell is headquartered in San Diego, Calif., and has 2,000 employees.