CIAG
The Collision Industry Action Group The Provincial Trade Association for Ontario
The State Of the Industry In Ontario
CCIF Mississauga
January 21, 2006
Contents
Organizational Chart
Objective
Mission
Priorities
Mandates
Small Business Climate
Current Industry Climate
Industry Issues
CIAG Today
Making A Difference
Organizational Chart
Northern
Southern
Western
Eastern
Provincial Board of Directors
Executive Board of Directors
Central
Industry Stakeholde
r
Advisory Council
CIAG Head Office Support
Executiv
e
V.P.
Objective
The NEW CIAG is committed to a provincial trade association built by the people, for the people.
“Your Industry, Your Future, Your Voice!”
An all-encompassing organizational model ensures every region within the province is given an opportunity to address regional issues and concerns, working collaboratively with experienced and knowledgeable industry leaders from across the province.
Mission
CIAG exists to further advance the legitimacy and positioning of the collision repair trade within the industry and amongst mainstream circles.
Priorities
PROVINCIAL TRADE UNIFICATION ON STANDARDS FOR REPAIRCOLLISION REPAIRER WELL-BEING
CONSUMER PROTECTION
Mandates
• Unification of the industry• Dedicated to working with those that
have a vested interest in the automotive collision repair industry
• Dedicated to the proliferation of progressive initiatives that will serve to strengthen and legitimize the collision repair trade and industry
Small Business Climate
Overall profitability decreasing dramatically
FACT: The Automotive Repair and Maintenance industry has seen a steady decline in net operating profit margins since the turn of this century.
1999: 11.9% 2000: 12.8%
2001: 10.5% 2002: 6.0%
2003: 5.2% Source: Stats Canada
Small Business Climate
Operational costs risingMajor Business Factors Affecting Performance in the Past 12 months:
Access to bank financing
Market wages
Labour availability
Insurance premiums
Energy prices
(Source: CFIB, Quarterly Business Barometer, December 2005)
Current Industry Climate
Operational costs risingFACT: 2006 WSIB premium increase of 3.9% and insurable earnings rising to $69,400.
FACT: Minimum Wage has increased from $7.15 in 2004 to $7.75 in 2006; going to $8.00 in February 1, 2007.
FACT: Insurance premiums for property and liability coverage increased up to 30%.
FACT: Increased property taxes.
FACT: In 2004 - 2005: The average hourly wage for trades (in general) increased by 2.4%. ** no benefits or pension **
Source: Stats Canada
Current Industry Climate
FACT: In 2005: The average hourly wage for an auto manufacturer assembly linesman was $28 per hour (excluding benefits and shift work premiums)
Consumer Price Index: (Cost of Living)
1995: 104.2 2000 : 113.5 (+ 9.3%)
2004: 124.6 (+ 11.1%) 2005: 127.5 (+ 2.9%)
Ontario Collision Repair Facilities must increase journeymen wages by 4% - 6% to stay competitive and not lose skilled workers to other industries.
Source: Stats Canada
Current Industry Climate
Service profit margins decreasing
FACT: Negotiation trends between collision repairers & insurers include:
A. Discounts on parts
B. Volume discounts
C. Guaranteed severity
D. Rental concessions
E. Free storage
F. ALL OF THE ABOVE!
HOW CAN HOW CAN WE WE
GUARANTEGUARANTEEA SAFE EA SAFE REPAIR?!REPAIR?!
Current Industry Climate
Collision repair volumes decreasing
FACT: Auto Insurance Claims Frequency compared to 2001: 2003: 40%
2004: 30%
2005: 25%
FACT: In 2005 some insurers downsized DRP lists
FACT: # of Total Losses
FACT: In 2005 towing chasers increased across the province
Current Industry Climate
Traditional collision work sources are changing
Volumes are not improving by much, therefore shops must look for alternative markets.
Retail Charging Retail Door Rate, (instead of Wholesale Rate)
Menu Pricing
Online Services, i.e. Appointment Scheduling, production updates
Creative marketing
Current Industry Climate
Formula For Success
A) Overhead Costs Labour Rate
B)Labour Rate Profit Margins
drive
drives
Industry Issues
Industry issues which may adversely affect business
Consolidation of reporting regulations to provincial government
More stringent guidelines to controllingVOC’s
No standardization of claims and repair processing
New regulations introduced without industry sector input
CIAG Today
Currently working with Provincial Government on 3 program initiatives that aim to:
– Centralize ministerial regulatory requirements– Streamline new environmental emissions
requirement in an effort to minimize cost factor to repair facilities
– Educate consumers on their rights; and moderate conflict resolutions, as they relate to the collision repair industry
CIAG Today
Currently Government lobbying for:
Provincial legislation to mandate towing tenders across Ontario and criminalize chasing
Provincial legislation mandating business license at provincial level with effective enforcement
Provincial legislation to rescind the PST Remittance for material costs and double taxation
CIAG Today
Currently Industry lobbying for:
Standardization of claims and repair processing by insurers and collision repairers
Inclusion of “Not Included” items as part of blueprint
Validation by estimating data system providers of numbers and application methodology
CIAG Today
Currently Consumer lobbying to:
Restore consumer confidence in the industry Educate consumers on the repair process and
their rights as part of the service contract
Making A Difference
What is integral to securing a future for the collision repair industry in Ontario is
not short-term solutions and concessions; Instead it is the
establishment of a solid and stable infrastructure for the industry-at-large; one that will promote positive change,
support standardization, and will lead to the longevity of the trade, and the
opportunity of prosperity for ALL… CIAG
Thank YOU
Your Indust
ry,
Your Future,
Your Voice