No Money in Panel Beating? In Perth?

[Crazy Dazz]

I often browse through the pages of businesses for sale; curiosity, looking for ideas, etc.
I'm stunned by the number of people trying to offload established panel shops, usually below replacement cost of their equipment.

Having looked into acquiring a small industrial property, I know what they go for and how much rent they can demand in Perth, so its not surprising that many businesses are struggling to pay their landlords and wages.

I suspect that insurances companies are becoming even more vicious in forcing costs down, which mean that professionals who insist on doing quality work would find it hard.

Whilst I'm on the subject, can anybody recommend a QUALITY panel shop in the Northern Suburbs? Preferably around Wangara, Gangara, or Landsdale?

[comagutsa]

i have used Rosco's RE-Car http://www.yellowpages.com.au/wa/lan...nessTypeSearch

to do a few small jobs on my utes and they have been done well

[ohzone]

[QUOTE=Crazy Dazz;5155208]I often browse through the pages of businesses for sale; curiosity, looking for ideas, etc.
I'm stunned by the number of people trying to offload established panel shops, usually below replacement cost of their equipment.

Having looked into acquiring a small industrial property, I know what they go for and how much rent they can demand in Perth, so its not surprising that many businesses are struggling to pay their landlords and wages.

I suspect that insurances companies are becoming even more vicious in forcing costs down, which mean that professionals who insist on doing quality work would find it hard.

Nailed it !

[Smoke Pursuit]

Yep.

I have a friend who has a very large panel shop. The only way to be competitive is be really big, or not be in the industry at all. Hes got 30 - 40 cars getting worked on at any given time, hes lucky he owns his own real estate.

He said the insurance companies do put high demands on you.

[partsguy]

26 panel shops closed in Melbourne in March.
12 months ago we down-sized our parts department because of a major downturn in sales to panel shops, it's not getting any easier, found out yesterday another local panel shop had closed, this one still owes me money, unlikely to ever see it.
The insurance companies (Suncorp in particular) have screwed the industry right down, they are now dictating terms to shops.

[Peter B - CV8]

Originally Posted by partsguy

26 panel shops closed in Melbourne in March.
12 months ago we down-sized our parts department because of a major downturn in sales to panel shops, it's not getting any easier, found out yesterday another local panel shop had closed, this one still owes me money, unlikely to ever see it.
The insurance companies (Suncorp in particular) have screwed the industry right down, they are now dictating terms to shops.

Funny you should mention Suncorp..... Talk to any panel shop & none of them have a kind word to say about them & their associated companies.

[xisled]

Bascially this.

http://www.paintandpanel.com.au/news...ts-company-lkq

http://www.paintandpanel.com.au/news...bbed-acm-parts

http://www.smh.com.au/business/car-r...413-36ldp.html

[Franco Cozzo]

Divide and conquer, unfortunately unless the panel shops/business stand up together they'll die one by one like they're doing.

It most likely explains the poor quality work that comes out of them when insurance jobs go through.

What annoys me though is if you go to them with a cash job and still get poor quality work in return, this aint no insurance work so please, I'd like some quality.

All it takes is a few bad businesses and it ruins the reputation of the whole trade.

[Crazy Dazz]

Originally Posted by partsguy

26 panel shops closed in Melbourne in March.

I thought maybe it was just Perth, due to high wages and rents, but seems to be universal.

I see that a lot of cars get written off for relatively minor damage, owing to the relatively high costs of repairs, but it seems PnP guys are caught between a rock and a hard place.
Thing that irks me, is that it will be the **** operators who survive.
I used to go to a REALLY good bloke in Landsdale. His shop did top quality work, always looked after the customer, and he would basically bully the Insurance companies for me. RAC would say "take it to dodgy bros," he would ring them up and say "the cars here, I'm going to fix it, this is the quote, deal with it." Sadly, he saw the writing on the wall and sold out to a complete dill.

Its sad, becuase the really skilled guys, the ones who actually work metal rather than pile on the bog, that's a skill I admire and a dying art.

[marty351]

Just a thought.. If panel beaters refused to deal with insurance companies, could it force insurance cos to change tact? Or a campain against dodgy repairs/expose dodgy jobs or insurance customer
awareness/demand for the best job? I dont get discounts on my premiums so why should the companies get discounts on MY vehicles repair job.

[BadMax]

The panel repair industry is a difficult one, if you want volume you need to sacrifice profit margin, quality and morals in return for being dictated to by the insurance companies.

Insurers are simply not interested in good quality repairs, 'cost efficient' repairs are what they want as it's not their reputation on the line it's the repairers who wont get repeat custom. Some insurers like Suncorp expect their repairers to give away their margin they make on buying parts, to the point that Suncorp acquired LKQ, apparently the biggest automotive recycler in the world as they will now start direct supplying of parts to their repair network...Another margin gone!

Suncorp in conjunction with a very despised operator have setup rapid repair shops, they palm them off as someone else's but the reality is they are 99% share holders in them. These shop will turn you car around in 24 hours, what else can you expect apart from shoddy repairs?

RACV in Victoria abolished all supply contracts 18 moths ago, whereby you had to re-apply. The catch was and is, you had to nominate an average repair cost and stick to it. Repairers are known to have put in as low as $1,600, the average repair cost in the industry at the time was $2,100 my current average is $2,900. How can you expect quality repairs?

The you have the other end of the spectrum where you have third party recovery shops. A friends son had his year old Commodore repaired by one, he was bluffed by all the smoke and mirrors, signing authority for them to act on his behalf. Well, the quarter panel is welded on, in the wrong spot, the inner wheel arch is still damaged and rear door shell is bowed. Unfortunately for him, by going through a third party recovery shop and signing over authority, he has now got a poor repair on a new car that wont get rectified without a legal stoush. Mind you, this shop was paid at least double what a normal repairer would have been for the exact same job.

Since I was on the workshop floor wages have doubled, couple this with every other increase, margins are further eroded. I found a quote a mate did for me about 12 years ago, the exact same quote would be acceptable today and the pay rate has not changed!

Essentially, if you want to be told how to repair cars, what parts to use, mark up's allowed on items, stood over, dictated to and threatened. By all means, buy a panel shop!

[BadMax]

@Marty, the insurers have divided and conquered over the last 20 years. The industry is so divided that banding together will not happen. There will always be a handful of repairers who will sell their soul to make a dollar.

[Nikked]

I think there is only 2 paths a Panel shop can go down, low volume work, but taking on a large number of restoration type work.

Or


Having a large shop with the latest equipment, continually updated.


Insurance companies now take cars from shops that don't have the required equipment, to shops that do. Where I work is BMW accredited, and is constantly being improved...over the past year a Aluminium-only work area has been added, gone solar, all booths run on natural gas and we use Glasurit 90 line (water based)...

And yes, there is always a constant battle with Insurance companies over the smallest stuff...

[ozpacman]

I completed my apprenticeship in the noble craft of panel beating in 1980. Did a year or two as a tradesman and made the decision back then that it was not something that I could see myself doing for the next 40 or 50 years.

Even in those days the insurance companies were screwing the shops for every dollar. Unfortunately for the operators it's an industry that is totally controlled by insurance companies because they provide the work. They essentially dictate to operators how much they are prepared to pay for a job to be done so it becomes a matter of take it or leave it. A shop needs to keep the work rolling through the doors to survive so they have no option but to take it on for the money that's offered.

I can't think of any other trade that is bent over and dictated to like the crash repair industry. Imagine telling a mechanic how much you will pay him to rebuild your engine, or the plumber how much you're prepared to pay him to fix a broken pipe in your house?

I have the utmost respect for those who are prepared to persist in the industry. I suspect that for a lot of them it's a case of panel beating being all they know and what they're good at doing so they continue.

Go down to your local paint supply company and see how much a few litres of primer/surfacer, some 2 pack colour, hardener and reducer etc cost you - you'll be gobsmacked!

I'm amazed that shops can turn out good quality work when you consider what they're paid and what their overheads must be in this day and age.

I'm proud to have 'done my time' and have never regretted it for a moment, because I believe that completing an apprenticeship in any trade provides a young person with life skills and experience that will serve him or her well beyond the boundaries of the trade to which they're indentured.

Russ.

[GasoLane]

Surely all Insurance companies cant be all bad.

Is it possible for some of the Tradesman on here to say which Insurance Company wants a good (or even reasonable) job and which ones just want the cheapest no matter what goes out the door.

[buickman]

I would gather some shops would go the 457 visa to get workers as Panel beaters are always required and a lot get out of the physical aspect of the trade. Not only insurance company’s owning large panel shops but they would be looking to opening up large wrecking and second part yards to supply their panel workshops to repair the cars.

[Bearman]

The whole industry is cactus. The panel shop I have used long term is just hanging on. They were bullied by their main insurance company to spend a mozzarella on the premises and equipment with no guarantee of retaining their accreditation!! The guy owns the shop. If not for that he would have just closed his doors and sold his gear.

They simply cannot do any more old school type resto/projects for people because they need to spend every minute on churning out insurance jobs just to get by. They can't afford to put on any more tradesmen and they are just holding on.

The mind boggles how many have left the trade. The insurance companies have sent plenty to the wall, their conduct has been a disgrace.

[BadMax]

Originally Posted by GasOLane

Surely all Insurance companies cant be all bad.
Company wants a good (or even reasonable) job and which ones just want the cheapest no matter what goes out the door.

Sorry to be abrupt, but if you truly believe an insurer wants quality over profits, you're delusional!

insurance companies are ALL about profits! RACV churn around 20% net profit, in monetary terms we're talking four time what Qantas earns per annum and they continue to squeeze repairers dry.

Every supply agreement I have seen has never quantified volume of work being provided, but you have a strict criteria to meet. They essentially buy labour but also refuse to pay for simple things like, detailing the car for return, delivering a car and pick up from wheel alignments or tinting or any off site work.

Think of insurance companies as bookies, they are hedging their bets that you wont crash. Does it make sense why you sometimes get stupid premium quotes? They don't want your custom, you're too much of a risk!

It's a national disgrace and the government wont do anything to support the repairers!

[GasoLane]

Originally Posted by BadMax

Sorry to be abrupt, but if you truly believe an insurer wants quality over profits, you're delusional!

Not a problem, I guess that deep down I was hoping that there would be at least one that still some scruples.

Originally Posted by BadMax

Think of insurance companies as bookies, they are hedging their bets that you wont crash.

I read somewhere once that House insurance is where they pay you everytime your House burns down.
You pay them every time it doesn't

[Franco Cozzo]

Originally Posted by Bearman

The mind boggles how many have left the trade. The insurance companies have sent plenty to the wall, their conduct has been a disgrace.

Go for a walk through Kangan Institute's new Docklands auto facility, all these new panel/spray painting facilities, ovens etc, barely any apprentices in there doing it.

Gonna be even less across the board now that the government cut all of the apprentices incentives, they offered that in the first place to get kids into apprenticeships.

You'd have to be mad to do an apprenticeship as a panel beater or light vehicle mechanic, no $$$ there at all, better off stacking shelves, you get paid more and don't need $10K worth of tools to do it.

[Crazy Dazz]

Originally Posted by Bearman

The whole industry is cactus. The panel shop I have used long term is just hanging on. They were bullied by their main insurance company to spend a mozzarella on the premises and equipment with no guarantee of retaining their accreditation!! The guy owns the shop. If not for that he would have just closed his doors and sold his gear.

They simply cannot do any more old school type resto/projects for people because they need to spend every minute on churning out insurance jobs just to get by. They can't afford to put on any more tradesmen and they are just holding on.

The mind boggles how many have left the trade. The insurance companies have sent plenty to the wall, their conduct has been a disgrace.

I agree with most of that, but I'd have thought that doing resto work would be one area they could actually get some margin?

[Rob1964]

Belair smash in landsdale are pretty good

[Kingsley]

Originally Posted by GasOLane

Surely all Insurance companies cant be all bad.

Is it possible for some of the Tradesman on here to say which Insurance Company wants a good (or even reasonable) job and which ones just want the cheapest no matter what goes out the door.

My family owned a large and very successful panelshop for 30+ years until they sold out and retired. In the early 90's they were having drama being paid by a major insurance company who would only pay once every three months for work done. Since employees and bills need to be paid weekly, this was unacceptable. They would also harass to get cars completed quickly, argue every quote and generally make an *** of themselves. It was getting out of hand. One Monday he rang and told them if he wasn't paid for work already done by Friday, all cars regardless if they were finished or not would be towed down a lane across the street and left there. Come Friday close they hadn't paid (and weren't going to). So every car insured by them was pushed or towed down the lane way. Most were missing panels, paint, glass, wheels, masked up etc. He rang them and told them where to find them. Once they figured out he wasn't kidding they paid up. However he refused to take the cars back and for ten years refused to repair cars from this insurance company, which caused some grief since they no longer had a repairer in the area. They had to send a fleet of tow trucks up from Sydney to remove the cars. When they did do cars for this insurance company, it was a weekly pay deal. You probably wouldn't get away with it these days.

[BadMax]

I am quite passionate about the industry, but it's getting less so as years go by.
I'm on a board that I consult to in regards to the apprenticeship modules and training. The wheels are turning slowly in regards to training reform, but you still see influences from insurance companies.

It is really sad to hear and see how sausage shop repairers treat peoples cars. Cars in many instances are the second biggest dollar purchase after a house and to be treated so poorly is morally wrong.

[tranquilized]

Man I have an irrational, seething hatred towards all insurance companies. The whole industry is an absolute rort. The way they dictate to people what they may drive, and how they may modify, based only on statistics. Then stories like this only make me hate them more. What makes it even worse is the general belief that car insurance is absolutely necessary, and to drive even 50 metres down the road without it makes one completely crazy. It's all BS!

[Flat Top]

The newer "SMART" shops have decimated the panel repair shops in melbourne.
in essence they de-skill the operation by breaking the repairs down into lower skilled segments. therefore no needing as many highly skilled painters etc.

it comes down to "CHOICE of REPAIRER" in your policy. I had my Ute damaged and refused to take to the designated repairer. It wasnt my fault so i left them to fight it out amongst themselves.
loaner car,great job by Sheen in Frankston perfect!

The lower write off costs really are a "OPPORTUNITY" for someone with smash repair capabilities isnt it?? buy fix sell

trev

[chopstar87]

I think insurance company is just like EVERY other business out there, they want to make money, Just like Ford, Holden, Woolworths, Coles, Banks and who ever else.

Yes insurance company does screw down costs, I would be thinking because any time a repairer use to hear insurance work, they would start charging a lot more for the repairs, then what they would charge someone off the street for. so they became a lot more strict on costs.

the business world is a very unforgiving place to be these days, if you cant compete or adopt to where the market is moving to, you will full to side and die off. yes it does suck for sure that this what happens, but its just like the rest of world, its not just insurance and panel beating. its the corner stores, the butchers, independent servos, which if they are not something special, they are all dying off.

also I not sure about the whole dodgy repair thing, considering that they have Life time guarantee on repairs these days?? also if you want choice of repairer and not the insurance company telling you where to go, don't be a tight *** and pay the extra on a better policy that gives you choice of repairer if that is important to you.

Well that's my thoughts anyways.

[BadMax]

The difference is, they want to make money and obscene profits at the repairers expense.

The days you speak of was well prior to the digital age we currently live in. The days where quotes were hand written, tow truck drivers carried shot guns and baseball bats to ensure they got the cream job. You're talking 30 plus years ago.

Adopting, you mean investing in potentially millions of dollars capital equipment and then have your margins continually eroded and supply agreements that aren't worth the ink they're written with? At least supermarkets commit to volume purchases to get volume discounts.

Dodgy repairs do exist. The repairer must provide a 3 year statutory warranty on work performed, then insurer holds the remainder of the warranty. The reality is, most things will go wrong in the first few years if not the car will more than likely be sold on.

I'm currently looking at a 2007 Audi TT, the insurer has cut corners being an older car and all. The paint is now peeling, the repairs are visible...The kicker is the car is insured for
44K and they still treated it like that! Oh, the repairer isn't interested in fixing it and insurer is trying to back away from it, unfortunately for them the owner is a very switched on guy and will hand their **** to them.

[Nikked]

Originally Posted by BadMax

The difference is, they want to make money and obscene profits at the repairers expense.

Yep, and waste money on obscene ideas, like having 3 field assessors do a spot check on a car, or during hail storms renting out huge shed's and paying all the travel and accommodation expenses for the DPR's blokes to blow in and out...more often then not smashing through work doing below average work (note, this isn't about all PDR blokes being shoddy, just the rush jobs done in the 'dent sheds') that shops are left to fix anyway...


Own a 5 month old car? Smashed the front end? You'll get aftermarket air core's, radiators and intercoolers...and maybe genuine coolant...

Because they said to use them...

nothing like a non-gen radiator in your brand new car...with less cooling tubes etc...how does that effect warranty?

[XRGREIGHT]

I can see this industry going the way of the big chains taking over. Like the grocery and hardware markets.
Already starting to happen in most places. This would suit the insurance companies anyway who generally dictate how the industry turns.