One of the most complicated and challenging segments of the automotive industry is collision repair, and it’s a big one, valued at about $7.6-billion annually in Canada.

According to Statistics Canada, in 2014, there were a total of 4,869 outlets for the Automotive Body, Paint and Interior Repair and Maintenance industry in Canada, and it employed almost 22,000 people.

Desrosiers Automotive Consultants Inc. reported that sales per store reached $1.57-million in 2014, with a national average for the total annual compensation per job of $40,335.

But collision repair centres are facing ongoing increasing costs. The cost of each collision repair job is rising because of the plethora of new technology and materials in the latest vehicles, with multiple computers and sensors and safety devices, plus the use of new, hard-to-work-with materials such as aluminum and carbon fibre.

That means collision repair providers need to continue to invest in new equipment to properly repair newer vehicles. So how can dealerships that have their own collision repair facilities ensure the profitability of these operations?

“A facility today needs to be state-of-the-art as cars add more technology,” said Richard Marsh, collision manager of Brimell Toyota in Scarborough, Ont. Equipment like 3D measuring systems, which take the guesswork out of measurement, are now being required by manufacturers so a dealership facility can be certified, he said.

Brimell Toyota is a Toyota Certified Collision Centre. As well, it belongs to the Collision Solutions Network (CSN), a national network of collision repair shops whose purpose is to deliver superior collision repair services by assisting collision repair facilities to continuously improve their operations through performance assessments, ongoing training and marketing initiatives.

“The CSN brand is powerful in the insurance community,” said Marsh. “It’s an insurance-friendly network.”

All CSN collision repair centres offer insurance claims assistance, a national lifetime warranty, modern facilities, free computerized estimates and certified technicians. “We have seen our volume increase through our partnership with CSN,” said Marsh.

“We need to keep up with the repair tools to keep up with the latest car technology,” Marsh added, who has been in the body shop business for the past 38 years. “The investment for a body shop today is in the millions of dollars.”

As a result, we’re going to see the number of shops dwindle, he said.

There were about 8,000 collision repair centres in 2006 and that dropped to about half by 2014. Marsh feels collision centres affiliated with dealerships will benefit from this change. “A lot of the smaller shops don’t have the appetite or the capital for the investment that is needed.”

For example, the latest measuring and welding equipment can cost up to $100,000, Marsh said.

Investing in the latest technology and equipment is critical to running a successful collision shop, said J.R. Martino, manager of Budds’ Collision Services Ltd. in Oakville, Ont.

Budds’ shop, known to be one of the most advanced collision facilities in existence, is supported by the Budds’ Group of family-owned dealerships, encompassing nine stores and 11 brands. Martino said about 50 per cent of the shop’s business is with BMWs.

“OEMs are becoming more prevalent in the collision repair business with certified collision repair programs. They want first contact with the customer, instead of the insurance companies,” Martino said. “It’s all about ownership of the customer.”

Plus, he added, the OEM has the customer’s interest at heart, since it built the car, unlike the insurance company.

“We’ve been in business 30 years,” said Martino. “We’ve been slowly chipping away at these investments year after year.”

That means investments in equipment, tools and training are made every year, on an ongoing basis, and this has been supported by the dealer principal.

As aluminum body parts became more common, Budds’ was the first body shop in Canada to install a dedicated aluminum repair facility. “We probably have a million dollars of equipment installed in that room,” said Martino.

The next transition will be for carbon fibre body components, like those in the BMW i8, i3 and the new 750. Already, Budds’ said it’s one of only two certified carbon fibre repairers in Canada.

“Also, we’re the first body shop in Canada to be certified with Cadillac for the new CT6, which meant we had to buy a $15,000 riveting gun and a $10,000 wet vac to handle aluminum work,” said Martino. The chassis of this all-new sedan uses 11 different materials and a mix of high-strength steel and aluminum.

“You need to run your business efficiently and have what you need to fix these cars properly,” Martino added.

Marsh agreed. “One of the keys for success in the collision industry is not just all the equipment, which you need, but — to drive profit to the bottom line — you also need lean processes and to be super-efficient.”

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Rhino Linings’ born-in-Canada president leads the company’s growth around the world

He’s come a long way from growing up in northern Ontario around Timmins, but San-Diego, Calif.-based Pierre Gagnon still enjoys coming back to his home country to visit family and friends.

After a lengthy career in the automotive industry with roles at General Motors and Mitsubishi, Gagnon became President and CEO of Rhino Linings Corp. in December 2005, heading a company well-known for spray-on linings for pickup-truck beds.

Products include polyurethane, polyaspartic and epoxy coatings, concrete resurfacing and refinishing products, spray foam insulation and sealants, and interior and exterior stucco. The company operates in more than 80 countries.

Rhino Linings is best known for its spray-on bed liner. It was the first company to offer the product, and is the first company in the business to have ISO 9001 certification.

There are more than 850 Rhino Linings retail locations, of which 65 are in Canada. The company came to Canada in 2003. “In Canada, 25 per cent of our applicators are auto dealerships,” said Gagnon.

Rhino service reps — there are two in Canada, one in Ontario and another in Saskatchewan — work with dealerships so it’s easy for customers to order the spray-on lining on new pickup trucks. The dealer can take care of the process so the pickup is ready to go when it’s delivered to the customer.

“We do very well in Ontario, where we’re better established, but most of our recent growth has been in the West,” said Gagnon, who hopes to grow the business by 10 per cent this year. “Canada is a good market for us.”

Applicators, who use either high- or low-pressure spray equipment from Rhino, go through three full days of training to learn how to use the system. “The safety element is really critical,” said Gagnon.

Rhino Linings offers four types of coatings with various hardness and strength ratings to suit different applications. Its signature product is TuffGrip.

Also available are the HardLine, Rhino Extreme, Rhino Hybrid and SolarMax coatings. “All are available in different colours,” said Gagnon, although “over 90 per cent of customers choose black.”

While Gagnon grew up working summers in the gold mines, his job now is to mine continuing growth for Rhino Linings.

For more information, visit rhinolinings.com.

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“The current trend is to celebrate service and improve the transparency between sales and service,” said Arnone.

In some cases, Arnone said the service department actually forms the basis for the facility design, making it the focal point of the dealership operation.

“Ford has long thought that placing and designing the customer lounge and cafe with views into the service department creates a dynamic that improves customer perception,” said Arnone.

“It does this by exposing the business to customers and elevating their level of trust, puts the expertise of the technicians on display, and demonstrates to customers the care the fixed operations staff takes to keep the facilities clean, organized, visible and free of clutter.”

For example, Shanahan Ford Lincoln in Newmarket, Ont., was designed around this premise and offers full transparency, from showroom into service, through the customer lounge and cafe areas.

Consulting and design firm Autoplan Plus Inc. has a distinctive vision of how a dealership’s service area should be set up.

“We’re operational planners,” said owner Gordon Manock. “Our focus is on what we call the sales-service transition.”

This includes offering complete vehicle diagnostics in the drive-through. “Offering diagnostics allows you to bring customers back, even at non-scheduled intervals,” he said.

An example of this type of operation is Nurse Chevrolet Cadillac, in Whitby, Ont., an Autoplan Plus customer five years ago. The dealership boasts that customers will find its lube, oil and filter service to be a “one-of-a-kind experience.”

Prior to the dealership’s renovation and expansion five years ago, “we were the specialists in the four-hour or five-hour oil change,” said Mary Nurse, dealer principal of Nurse Cadillac Chevrolet.

“When Autoplan presented the full package for what we now call the Envirolube Lane, we knew we’d hit the jackpot.”

When a vehicle enters the lane, the interior is cleaned, and then it is positioned on a Hunter 400 for diagnostics. It then proceeds to the lube lane. Finally, it goes through an exterior car wash.

Customers don’t have to wait in a lineup and they don’t have to make an appointment. As a result, “the volume of our lube business has gone up,” said Nurse.

“My favourite part of the process is the mat washer,” Nurse added. “It’s included in the package. Having a clean car on the inside is so much more noticeable and more significant than anything else that possibly could be done. When I look over customer comments, it’s the ‘clean’ part that receives the exceptional notice.”

Service area design improvements are included in the new facility designs that Hyundai Auto Canada Corp. is rolling out across the country.

Based on the company’s Global Dealership Space Identity (GDSI) concept, the new look includes lots of glass and a bronze-coloured roof structure. The interior features modern, premium furniture, customer lounges, digital kiosks and tablets to enhance the customer experience.

“What we’re seeing is a lot of our dealers adding a service drive, which they did not have before,” said Ted Troughton, National Manager of Dealership Development for Hyundai Auto Canada. “They’ve got the advisors right in the drive-through.”

When the customer comes in, the advisors are looking at the car and walking around it. It’s not a brand new idea, but dealers are starting to see this as an opportunity to look and touch without being outside in the rain or the cold, said Troughton.

This helps turn the drive-through into a profit centre, Troughton added.

“They’re putting in Hunter equipment and they’re doing quick lubes right in the drive-through. The Hunter equipment will check cars, do brake and tire checks, and will provide a report card, showing ‘red light’ issues — things that need to be dealt with now, and ‘yellow light’ issues that can be dealt with next time. The dealers are using these to build rapport with the customer.”

Fundamental to any service department is the customer lounge. Customers need to have access to a separate waiting room, which must be neat and clean, said Manock.

The area should offer free food, water and coffee. Comfortable seating is a must, Manock added.

Joe Buccella, President of Bay City Developments, which designed Budds’ BMW in Oakville, Ont., said the store goes as far as including massage chairs, televisions, WiFi and even a ‘barista’ area in the customer lounge area.

The BMW dealership takes customer service seriously, first by greeting the customer the moment they walk through the door.

Buccella also said the service reps walk around with iPads to show customers what work they need to have done, rather than having them lean over to look at a computer screen. “I think this is the coming thing and it will be an evolution for everybody,” said Buccella.

Troughton said that from an operations viewpoint, the service department is probably the most important area of the dealership.

“Moving metal is nice but having that metal come back [for service] is critical. If customers are treated well in service, they’re going to come back.”

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Klempf envisioned a system that salespeople and managers would be encouraged to use because it was easy and quick for handling customer data and inventory records.

When the San Francisco-based Klempf, who started selling cars at the age of 19, later got involved with a business startup accelerator program, he saw the opportunity to develop his idea. He first created an iPhone app that allowed dealership sales staff to capture and organize client information.

With further fundraising, Klempf was able to then develop a full sales management platform that he said is “designed for modern dealerships.”

This led to the creation of Selly Automotive in 2014 with co-founder Joseph Dixon. The company offers a full dealership sales suite, with integrated CRM, Internet lead management, email marketing and inventory capabilities. The software also integrates with programs from major DMS providers.

He feels that his relatively young age, 24, helps him bring a fresh perspective to industry norms. “Over the next five to 10 years, we’re going to see more disruption and change in this industry than in the past 50 years,” said Klempf.

Klempf, who is CEO of Selly Automotive, saw the importance of making dealer systems mobile-centric and social savvy — the kind of things other millennials (those like himself who were born between 1982 and 2004) — understood and appreciated. He found existing CRM systems to be overly complex, and he believed dealerships needed fresh tools to cater to the mobile and social customer.

That first iPhone app has morphed into a new product called Selly Automotive Lite, available for iOS and Android. “We want to be true to the salesperson, so the Lite program is free,” said Klempf.

Selly Automotive now has thousands of users in more than 2,000 unique dealerships, mainly in the U.S., but also in Canada, Australia and Colombia, said Klempf.

Regarding Canada, Klempf said the company recently formed a partnership with SureFireSolutions.com, a DMS provider based in Kelowna, B.C. SureFire has integrated the Selly program and localized it for the Canadian market.

“That means the driver’s licence scanners work for Canada, we use kilometres instead of miles, and we also will be available in French,” said Klempf. “SureFire helped us understand the different nuances between the U.S. and Canada.”

A key component of the integrated program is Selly Mobile, which streamlines the data entry process for salespeople by offering driver’s licence and VIN scanning features.

Dealers that start out with the Selly mobile app “are going to see a 25 to 35 per cent increase in fresh ups entered into the system.” One of the big reasons for this is the driver’s licence scanner, said Klempf.

Klempf added that the integration with SureFire means all that information is sent to a dealership’s DMS system in real time.

“Dealers that are not using an Internet lead management system are leaving money on the table,” added Klempf. “With Internet-savvy consumers, it’s all about speed; it’s about responding to those customer enquiries as fast as possible.”

For more information, visit sellyautomotive.com.

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Quorum’s XSellerator tracks a service work order and compiles comprehensive summaries that are stored in the system.

Dealership management software (DMS) programs are well-known tools to help streamline operations and boost sales. Yet choosing the best system for your needs is no easy task. The systems are comprehensive in their capabilities and complex to analyze. And it’s a competitive marketplace, with loads of vendors promising the latest and greatest solutions, so keeping up-to-date can be a challenge.

A lot of innovative development has taken place in DMS systems over the past couple of years, mainly with a focus of improving the user interface. With high staff turnover in many dealerships, the easier it is to train a new employee to use a DMS, the more quickly the operation will benefit from the software’s capabilities.

Data to go

Another trend focuses on mobile applications, allowing dealers to keep track of business operations using smartphones or tablet computers. With this option, staff are not tied down to a desktop computer — they can have access to data at their desks, out on the lot or while on the road.

One such mobile-oriented program is DriveMotion, the next iteration of Drive, ADP Dealer Service’s mainstream dealer management system. Scheduled for release in late summer, DriveMotion is a new Internet-based program that will be able to present a dealership’s most important transactions and tasks from a central location, in a highly-consistent and usable way.

DriveMotion will be available through any computer with web access, including Apple and Android smartphones and tablets.

“Drive is designed around the workflow of a dealership,” said ADP Canada’s vice-president and general manager, Dean Anton. “Drive facilitates the dealer personnel, so they can work most efficiently and effectively, and it ultimately impacts their relationship with their customer.”

The Drive DMS program, which is installed in about 1,200 dealerships in Canada, brings together key dealer and consumer-facing workflows, such as evaluating a trade-in, applying for financing, scheduling and writing up service, customer relationship and sales lead management, and payroll.

“It’s all driven by workflow management, to make the dealership effective in what it does and ultimately it improves the relationship with the customer. Everything we do is driven around the client experience,” said Anton. “If the dealership is becoming more profitable in selling parts, cars and service, it’s win-win.

In Canada, the company is going to be releasing a new front-end product called CT Wizard said Anton. “The next iteration of that product will be a simple, graphical, straightforward-to-use product that dealers have not had before. It’s entirely integrated with the existing DMS but incorporates more efficient technology. It’s being developed in Canada to meet the specific needs of the Canadian market, and will be bilingual,” says Anton It’s also scheduled for release late summer.

Customer touches

Already offering a completely web-based program, One-Eighty Corp. is a Canadian automotive customer relationship management (CRM) and dealership training provider, serving auto dealers throughout the U.S. and Canada. Its program uses a Software-as-a-Service (SaaS) application, allowing centralized updating, which makes changes to the program more efficient for the dealer. One-Eighty calls its program A-Z Sales and CRM.

One-Eighty aims to provide structure to the selling process, reduce its complexity, engage the customer, provide management control and hold staff accountable. The system features Menu Selling, which automatically loads all deal, customer and vehicle information, eliminating the need for double entry of information by the dealership’s business office. It also offers an optional CRM tool called The Magnet for handling marketing campaigns and centralizing customer contacts.

“Sales reps take to One-Eighty like ducks to water for all that they do — follow ups, appointments, presenting inventory, quoting, traffic, accessory sales, scheduling deliveries, etc.,” said Kerry Meuller, president of One-Eighty Corp. The program tracks data as sales staff are working every day to do their entire sales jobs. It’s all in one system.

Happy customers

“The One-Eighty system immediately improved the flow and accuracy of our entire sales process and raised the level of professionalism of our sales team,” said Rob Ricketts, general manager of Fredericton Volkswagen in New Brunswick.
“It’s so user-friendly, I have not heard of any manager or salesperson with our organization who has not fully mbraced the system,” said Arnold Smith, managing partner, Lone Star Mercedes-Benz in Calgary, AB.

One-Eighty celebrated its tenth anniversary in March.

Breaking down barriers

The ERA dealer management system from Reynolds and Reynolds, Mississauga, Ont., is built on a foundation of applications that can help run a dealership from the web to the showroom, to the financing and insurance office, to the parts and service departments, and to accounting and payroll. “ERA can be customized and scaled according to each individual dealer’s business needs,” said company spokesperson Lucy Pozzobon.

Reynolds and Reynolds spokesperson Thomas Schwartz noted that the company has continued to invest in product development, even during the recession. “We’ll be coming out with some products that will give better results for dealers, to help make the dealership operation more efficient and productive. The goal is to provide utilization and results for the dealer. We’ll be building in more insightful reporting.

“We’re trying, in a number of areas, to break down the barrier between the dealer personnel and the customer, to get the customer more involved in the process. That’s our approach to product development.”

The ERA DMS program was introduced in the U.S. in 1987 (25 years ago) and in Canada in 1988. “We’ve completely rebuilt the ERA DMS software with Windows point-and-click functionality,” said Schwartz. “It improves navigation so it’s easier to get around. We’ve also reduced the number of keystrokes it takes to get around in the program.” The new Windows-based version is called ERA Ignite, and it’s currently in pilot testing in Canada.

“A couple of new things are integrated into Ignite, including computer-assisted instruction (CAI). There’s a lot of turnover in dealer personnel, so new employees need to be trained on the system. Now that’s built in.”

ERA Ignite also has better exception reporting, so general managers can set their own criteria for dozens of business issues. The dealers decide what they want to track, and can see it on a dashboard, saving looking at a lot of reports. “It’s more intelligent reporting,” noted Schwartz.

Integration is key

Calgary-based Quorum Information Technologies Inc., which supplies Xsellerator dealership and customer management systems, is a preferred General Motors DMS supplier in North America. Quorum’s DMS products are also available to Chrysler, Subaru and Hyundai dealerships.

Xsellerator is a comprehensive dealership and customer management solution that automates, integrates and streamlines every department in a dealership, according to Mark Allen, vice-president of sales, marketing and services. It is built as a single, integrated system with overall business processes and work flow embedded within its various 
departmental functions. Departments get ‘horizontal’ communication and the dealership benefits from ‘vertical’ integration with General Motors.

The system was designed with a foundation of workflow and efficiencies across departments. And the factory-to-dealer integration means less rework and more accuracy of information.

Mark Cullen, the general manager of Barry Cullen Chevrolet Cadillac in Guelph, Ont., likes the fact that the system is integrated. “We saved a lot of money when we switched from our previous DMS a few years ago,” he said. “Compared to a system with optional modules, an all-in-one system is cheaper.”

One benefit of Xsellerator for Cullen is that the dealership can dial directly into General Motors and do a recall check on customer vehicles. “It’s a time-saver.” He also said the system is easy to use, being Windows-based. “It’s easier to train new hires.”

As you can see, various programs aim to make life easier for dealership management and personnel, and as their development continues, new methods and technologies will continue to help streamline both operations and customer relationships.

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