The IBIS (International Bodyshop Industry Symposium) conference returned to the familiar surroundings of Montreux, Switzerland this year. Since inception in 2001, IBIS attendance has become increasingly diverse moving from 85% attendance from the U.K. to 35% today. Between the attendees and speakers, the forum provides a global view of our industry. This exchange of information and ideas is important, as historical trends from Europe and emerging markets such as China and India will in some way affect how every one of our industry segments runs our business in the future.
Some of those trends were highlighted by Dr. Peter Wells, a speaker at the conference who has made a career out of studying the automotive industry. His statement: “There exists a tension between manufacturing systems and markets” could be used to tie in the several themes of the conference. For example, in cases where a repair exceeds $2000, in only one percent of those cases worldwide did an airbag deploy. Furthermore, the cost of the airbag has very low correlation to the cost of the car. In other words, the cheapest car has the most expensive airbag, and vise versa. The implications are obvious if you make your living repairing vehicles: the more cars that are totaled, the less cars available for repair yet repairability and manufacturing are not aligned.
“There exists a tension between manufacturing systems and markets”
Dr. Peter Wells, Cardiff University, UK
Thilo Remoz, Manager, Collision Repair Programs for Daimler AG, noted the top three goals for the Mercedes Benz driver as it relates to his division as 1) Accident free driving (developing accident avoidance systems) 2) Vehicle safety in the event of a crash and 3) Repairability to standards post-crash. Notice, Thilo was asked specifically about this- that Daimler has no true strategy to increase repairability and/or to sell replacement parts. Therefore, we have markets (collision repair, some consumers, insurance companies on a case by case basis) in conflict with manufacturing (Daimler).
Wells also was asked to pick a list of “winners” and “losers” in the manufacturing world. I did have to disagree with his choice to put BMW into the losers bracket. Wells’ argument was that the strength of the performance brand could lead to its demise as it lacks flexibility to change with the (greener) times. My initial reaction was that the amount of wealth being created on a worldwide basis provides the brand with a bright future. I felt somewhat vindicated today when I received the Automotive News 2008 Global Market Data Book. BMW Group sold 19,591 cars in China in 2004. The global forecast for 2008 is 68,624 and for 2012 it is 131,794.
Another option, for BMW, of course, is to create a third (Mini being the second) brand. If I were them, I’d leave BMW alone.
Next year, IBIS is in Berlin, Germany. You can find out more about IBIS at www.ibisworldwide.com. It’s a long way to go for a conference, but worthwhile if you are interested in the global automotive market.
Every industry and business has unique challenges and opportunities that ultimately revolve around one principle: customer retention.
You can have operational excellence, financial discipline, marketing genius and the best strategic vendors and partnerships. Without customers, however, you are not a viable entity; and without customer retention, you are not positioning your organization for long term health and growth. And, while most of us fancy ourselves to be well above average in the arena of customer service, the plain facts state otherwise.
For example, an illuminating J.D. Power and Associates survey of 5000 adults found that the majority were unsatisfied with the service levels of 120 different categories of products and services. However, when asked to rate their own industry, 75% gave it a positive response. When asked to rate their own personal contribution to customer satisfaction, they graded themselves out at virtually 100%.
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