Looking for a Clear Road Ahead

Presentation on theme: "Looking for a Clear Road Ahead"— Presentation transcript:

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Looking for a Clear Road Ahead

The number of US households that have had auto glass repair or replacement during the previous 12 months has remained stagnant since spring 2014 when it was 18.6 million. The totals during fall 2016 were 18.62 million and spring 2017, 18.63 million.

2017 year-to-date sales of all new light-vehicles in the US have decreased 1.7% through October, compared to sales for the first 10 months of 2016. Sales of pickup trucks, SUVs and crossovers have increased.

Despite these otherwise negative factors, the outlook for the industry is improving as high-tech features are being introduced, such as greater strength, less weight, soundproofing, sun-proofing and even augmented reality (AR).Slide3

Top-Shops Shakeup

Although

Safelite

AutoGlass

maintained its dominance of the industry, its 2016 revenues decreased from $1.5 billion to $1.1 billion for fiscal-year 2017, and the number of locations decreased from 800+ to 720+.

According to the latest data available from the US Census Bureau, as of 2015, there were 6,106 automotive glass replacement locations and 4,810 companies (SIC 7536). Of these, 74.8% employed 0–4 people; 16.8%, 5–9 people; and 5.3%, 10–19 people.

Some of the top 10 auto glass repairers in

Automotive Repair and Replacement Magazine’

s 2017 rankings have changed positions. The list of 69 top companies in the industry includes five newcomers. (See the bottom of page 1 in the Profiler.)Slide4

Technologies May Lead to an Open Road

Smart technology, super-strong and lightweight Gorilla Glass™ and laminated automotive glass are becoming more commonly used because of functional improvements, boosting revenues of the more innovative auto glass replacement shops.

Car manufacturers have started to incorporate more technology, such as front-facing cameras in windshields, and now insist that windshields be replaced with OEM parts, which may take weeks to arrive at repair shops, causing customer service issues.

With the autonomous vehicle trend, manufacturers are challenged by how to replace the thrill of driving. Some are considering using the glass as information and entertainment, with interactive touch screens.Slide5

Bits and Pieces

OEM manufacturers account for more than 80% of the auto glass made worldwide. In some states, such as Florida, for example, insurance companies are required to fix or replace broken windshield at no cost to the policyholder if they have full coverage.

Safelite

negotiated high-volume, low-cost windshield replacement rates with the biggest auto insurance companies, such as Geico, Progressive and Allstate, effectively lowering the price that insurers are willing to pay and impacting small, independent glass shops.

On average, a front or rear windshield replacement costs $300, but many windshields can be repaired for as little as $20. When a windshield is replaced, sometimes car owners will also have to replace the special molding, which can add 20% to the cost.Slide6

A 360-Degree View of the Industry

Some auto shops are adding paint protection film (PPF) to their list of services. This is a durable film that is added to the surface of a vehicle to protect the paint from chips, wear and tear and chemical stains.

According to Gary

Lubner

, CEO of

Belron

,

Safelite’s

parent company, the auto glass industry has been stagnant due to lower speeds, less traffic and more utilization of mass transit, resulting in lower auto glass breakage rates.

Some auto glass shops have been committing insurance fraud, performing repairs, but charging for replacements. As a result, some states, such as Arizona, have introduced legislation to exempt insurance companies from covering auto glass replacement.Slide7

Advertising Strategies

Educate the public about the inexpensive, no-hassle option of windshield repair as well as its safety benefits.

Distribute a simple flyer to customers and consumers in states that require insurance to cover auto glass repair/replacement at no cost to policyholders with full coverage to communicate this benefit.

Help local auto glass repair shops find co-op advertising opportunities on the Media Group Online Website and its link to the Local Search Association’s co-op directory.Slide8

New Media Strategies

Offer online appointment scheduling for customers via your Website.

Use email and/or the mobile channel to contact customers and social media followers prior to and during the winter-weather season when potholes and other road disintegration are likely to increase chipped windshields.

Ask customers to tell their glass repair stories on video and highlight the most unusual circumstances that led to a necessary repair. Post them on your Website and social media pages and provide customers with a coupon for posting on their social media pages.Slide9