Posts made in February 2nd, 2018

Hitting the Reset Button

Posted by on Feb 2, 2018 in Uncategorized | Comments Off on Hitting the Reset Button

Driven by trends in technology and repair techniques, parts recyclers are calling for a new focus on industry forces working together. Whether you’re a new technician entering the automotive world, or you know someone who is – perhaps you’ve just hired one or two – it’s critical to understand one thing: Your education is never finished! “The best professional automotive recyclers demonstrate essentially the same characteristics as those in automotive repair shops. They subscribe to best practices, including the Gold Seal and Certified Automotive Recycler certifications of the Automotive Recyclers Association (ARA), and work to position themselves in the marketplace as providers of excellent experiences for their customers. They’re also trying to stay ahead of rapid changes in vehicles rolling off the assembly lines. Some examples of those changes include advanced virtual computers; high-strength steel and plastics; high-tech software that can track the habits of car owners; 24/7 wireless connectivity that’s subordinate to high-profit business models (think Tesla and Google); and OEMs exerting control over the recyclers’ creations. Bottom lines and business models are changing. Regulations, legislation and the courts are impeding. Yet despite all the changes, professional automotive recyclers continue to seek creative ways to serve customers and maintain market share. What follows are some of the issues that the industry is working to master. Some of the issues will be years in the making; others are knocking on your door now. The Parts-Data Issue Not so much a trend as a critical need, recyclers continue to struggle for access to parts numbers entitled to them by law. “Two years ago, President Obama signed the Fixing America’s Surface Transportation (FAST) Act into law,” notes ARA regional director Scott Robertson, president of Robertson’s Auto Salvage of Wareham, Mass. “It requires OEMs to provide data to recyclers to identify recalled parts. We still don’t have the data. In the future, the OEMs could control all aspects of the vehicles they manufacture. Therefore, they could control how they are repaired and disposed of at end-of-life.” Viewing this as an antitrust issue, and one that’s not in the best interests of the consumer, ARA is investing time and resources on Capitol Hill in the belief that more partnering is required. Should these efforts be successful, they would benefit all repair, insurance and auto recycling industry partners. “Until the data is released,” adds Mike Kunkel, of Profit Team Consulting, “the auto recycler must continue to stay efficient to remain profitable.” The High-Value Parts Issue Smartphones keep consumers connected, and they want that same level of connectivity in their cars, too. Automakers are responding to these desires at light speed. And as the National Highway Traffic Safety Administration’s (NHTSA) Crash Avoidance and Electronic Controls Research Program contributes to the public’s acceptance of advanced crash-avoidance systems, automakers are digitizing their vehicles at a rapid pace to meet the demand, which means that the number of salvageable auto parts is multiplying – as is the value of those parts. For example, just one electronic sensor on a new Volvo costs $1,200. Automotive recyclers will seize the opportunity to salvage these high-dollar electronics, which will likely replace current cash-cow parts. Imagine dismantling and recycling all of those systems? Yet for the progressive and adaptable recycler, the potential for profit will be astounding. And although vehicle safety technology mandates might increase, with the intended result being fewer accidents, auto salvage recyclers must rise to the challenges of increasing the number of parts of higher value that they have in stock. “Electric and hybrid vehicles will soon dominate the market,” says Norman Wright, president, Stadium Auto Parts in Denver,...

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