A Storm in the Smash Repair industry| June 11, 2015
Alan Kohler’s article on Australia’s four great panel beating families (21st May 2015) left out one of Australia’s important smash repairs industry groups which is made up entirely of family businesses. These far exceed the numbers of the four ‘family’ businesses referred to in Alan’s article.
Car Craft is the longest established and most successful group of premium quality repairers in Australia. It began in Perth WA in 1987 and now has a broad membership base across Western Australia (33 members) and Queensland (14 members). In addition negotiations are underway with repairers in South Australia and New South Wales to form groups in those States in order to become a premium national group of independently owned and operated businesses.
Car Craft’s push to become a national player is driven by the circumstances that are faced by all small business operators that partner with big business; in this case it is the national and multi-national insurance companies that dominate the smash repair industry, with one in particular moving towards vertical integration.
These are the same pressures that over time have forced service station franchisees out of their businesses. Initially some became multi-site operators; however now the service station industry is vertically integrated with retail sites predominantly company owned by Shell, BP and Caltex who take the oil from the ground, refine it, distribute and retail it. There are now just a smattering of independent operators.
The supermarket industry is almost a mirror image. It is now dominated by Coles and Woolworths, again with a very small smattering of independents in IGA.
Independent hardware stores are virtually non-existent, Bunnings and Masters have eliminated them.
Unfortunately it’s the way of the world; nothing could stop those industry giants from their domination and the smash repair industry must evolve to accommodate the changes being brought about by the plans of their big business partners.
However, I need to question Alan’s reference to there being four great panel beating families in Australia. Capital SMART is certainly a consolidator but it is definitely not a family owned business. No-one would question Jim Vais’ ability to operate big workshops very efficiently but the money and ownership behind the business is Suncorp’s.
I would suggest removing Capital SMART/Suncorp as one of the four families and replacing it with the Car Craft Bumper Repairs Perth Group.
Suncorp is one of the two biggest insurance companies in Australia and is in the process of controlling a large chunk of the body repair industry. The company insures the vehicles, repairs the vehicles through its 26 SMART shops and in its latest venture, ACM Parts, supplies the parts for the repairs.
It is highly questionable whether vertical integration is good for the consumer. When a company has its shareholder’s interests at heart; one of the ways to maximise profits is to control costs. This the insurance industry does extremely well by using its superior bargaining power over the smash repair industry operators.
No amount of complaining will stop the repair industry from consolidating and there is no doubt that businesses will close as a result of the many other changes occurring across the industry, including those driven by big advances in technology.
Car Craft intends to ride out the storm by growing a strong, professional national organisation with quality standards, whose members can offer a premium service to their customers and who have confidence in the future of their industry.
Noelle Simons – General Manager
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