Dutch paint and coatings giant AkzoNobel, on October 1, conducted AkzoNobel RepairTalks 2019, a communication platform for industry stakeholders to work together collaboratively and professionally, in New Delhi, to discuss and debate a host of subjects and share knowledge and best practices in the area of automotive body accidental repair. The day-long conclave saw the presence of large number of industry experts and stakeholders. Autocar Professional was the official media partner to AkzoNobel RepairTalks 2019.
The context for the day was set with the topic of CASE (Connected, Autonomous, Shared and Electric) and the impact of these disruptive technologies in the global automotive industry. It was echoed by RepairTalks' research that the CASE phenomenon is giving an opportunity for companies to reposition themselves wherein auto companies are moving towards becoming mobility solutions providers and technology companies entering the automotive ecosphere.
Touching upon another critical aspect of a global sales slowdown, RepairTalks forecast a 4.4 percent YoY decline by end-2019, with the sub-Saharan and MANA regions showing some positive outlook. Also, many markets, according to RepairTalks, are seeing regulatory changes in lieu of moving towards sustainable mobility solutions. For instance, Europe and the US seeing a big change in the way the government is pushing electrics instead of diesels.
However, despite the challenges of a sluggish market, investments are still continuing towards expansion of capacities in some of the key established manufacturing hubs such as the US, Mexico, China and Russia.
The forum also threw some light on the insurance sector, one which has to deal with challenges like poor customer mindset that one would never meet with an accident. To counter this, some markets are seeing insurance companies working hand-in-hand with OEMs to offer comprehensive insurance packages at good prices aimed at strengthening the relationship between insurers and customers.
While vehicles are becoming more reliable with reduction in service intervals, they are also becoming complex with every new generation. As a result, AkzoNobel RepairTalks believes more investment is required in training an ageing workforce and to install the latest equipment in the bodyshop. There is also a stark lack of new people getting into the automotive aftermarket space; Japan, UK and Canada face significant challenges of not seeing the right people in the right jobs.
According to Graham Threlfall, key account manager, AkzoNobel, "Language used to refer these bodyshop workmen needs to change to portray aftermarket repair as a respectable and responsible profession. A denter needs to be referred to as a body technician to show honour in the job."
L-R: Arun Malhotra, former MD, Nissan India; Vinkesh Gulati, VP, FADA and Managing Partner of United Automobiles; Prasanth Chandrasekharan, Head of Automotive and Specialty Coatings, AkzoNobel India; Shelley Cheshire, CEO, RepairTalks; Pankaj Narula, Executive Advisor, Maruti Suzuki India; and Nikunj Sanghi, Chairman, ASDC and MD, JS4 Wheels.
Panel Discussion 1: The customer of the future and how to align our business models of the future.'
The keynote session was followed by a panel discussion on 'The customer of the future and how to align our business models of the future.' The session was moderated by Prasanth Chandrasekharan, Head of Automotive and Specialty Coatings, AkzoNobel India. The panelists included Arun Malhotra, former managing director, Nissan India; Vinkesh Gulati, vice-president FADA and managing partner of United Automobiles; Pankaj Narula, executive advisor, Maruti Suzuki India; Nikunj Sanghi, chairman ASDC and managing director, JS4 Wheels.
Starting off, Nikunj Sanghi said that at present the customer is in a dilemma and confused whether to go ahead and make a purchase. "It's a tough time for dealerships and everybody is being affected, whether it's vendors or even OEMs.
"The safety aspect needs to be valued both by the customer and dealer. Customers need to be educated about the importance of a high-workmanship repair after an accident, which would not compromise on the safety offered by the vehicle,' he added, commenting about the safety of repaired vehicles.
As regards skilling, Sanghi added that a lot of technology is coming into repair cost estimation, which takes care of the skills of the inspector. But the importance of investing both money and time in upskilling manpower cannot be negated. There's a lot that India needs to do to upskill its people, otherwise there is risk of redundancy.
"Second- and third-generation workmen (denters and tinkerers) don't want to become paint matchers, which is the most important skill in the aftermarket. We need to bring awareness in the bodyshop community about the kind of opportunity. Unless one attaches the kind of respect with skilling, the way things are moving, people who are skilled have brighter futures than those who are well educated," he added. "Technicians have the potential to become brands in themselves," Sanghi concluded.
Arun Malhotra said, "The Indian automotive market is right now facing confusion, chaos and anarchy because of EV incentives and emission policies all coming in together. The customer is changing and so are his/her aspirations. The automotive industry needs to bring back that desire of owning cars back."
Cost of ownership, said Malhotra, has increased due to safety regulations and fuel costs, which have actually led to a change in aspiration. Small-town India, which used to bring a push to automotive sales, is now sputtering and fluttering.
"With a rising vehicle parc and with more advanced vehicles, the service business is looking at more opportunities and there is a need for increased operational efficiency, however, the challenges of high capital investment remain," he said.
The former Nissan India MD further added that for whom usage is more important than ownership, shared mobility will remain important but India is much larger than that and there are Tier 2, Tier 3 towns, where owning a car still signifies a big jump in life.
"There has been a lot of disruption in the service space with a lot of OEM focus and audits. Technology is bringing speed to workshop operations and leading to more customer satisfaction. A lot of focus of OEMs is towards aftersales as they have found out that more than sales, it is aftersales that’s more profitable. Bodyshop contributes 70-80 percent of overall revenue while having only 10 percent of reporting," added Malhotra.
Pankaj Narula, industry veteran in aftersales, said, "I would not be too pessimistic. While the festive season this time might not be celebratory, the market will revive and growth will be seen in a few months down the line. Business in aftersales will be there and whatever vehicles are being produced, they will be coming into workshops and we need to sustain business and be prepared for the extra numbers that will be showing up."
"A low carbon footprint in the servicing space is important and unless it is regulated, it's hard for dealers to adopt these measures. They are, however, looking at cost-effective solutions such as conserving energy by the use of LED bulbs," he added.
Vinkesh Gulati, who represented the dealer fraternity's thought process, pointed out that digitalisation has changed the customer psyche. Whether for service and more so for buying a new vehicle, customers are visiting workshops after doing good research. This becomes insurmountable when it comes to body shop repair. Customers in metro cities are now aware and prefer going to authorised workshops than roadside garages," he said.
"Talking of carbon footprint, while it is otherwise something most dealerships don't even think about, it can only be implemented through regulation. Mahindra, for instance, conducts a quarterly evaluation of its dealer workshops and ranks them as per installation of ETPs and LED bulbs to start-off with," he added.
Panel II (L-R): Manoj Soni, director, Mirka India; Nikunj Sanghi; Graham Threlfall; RK Duggal, former VP and senior advisor, Maruti Suzuki India; Vivek Sahai, national segment manager, AkzoNobel India and Gautam Prasad, MD, Audatex Solutions.
Panel Discussion II: Bodyshop opportunities
The second half of RepairTalks 2019 saw another panel discussion, this time on 'Bodyshop opportunities in current adversity', which saw participation from Manoj Soni, director, Mirka India; Nikunj Sanghi; Graham Threlfall; RK Duggal, former VP and senior advisor, Maruti Suzuki India; Vivek Sahai, national segment manager, AkzoNobel India and Gautam Prasad, managing director, Audatex Solutions. The session was moderated by Shelley Cheshire, CEO, Repairtalks.
According to Manoj Soni, "I see a lot of opportunities in the market, just that we have to reset the button and look at it from a different approach."
Nikunj Sanghi added, "Irrespective of autonomous or EVs, bodyshops will continue to remain a very important source of dealership revenues even in times when these vehicles won't have as much servicing requirements as today. We need to start looking at the pain-points of the painter and mechanise the process to ease their jobs. Unemployment in India is at the highest point at the entry level and we need to encourage them to be part of the ecosystem."
"The US has undertaken an entire program at the school level to bring in fresh talent into automotive repair to solve its shortage problem of 37,000 technicians," he added, citing examples of developed markets facing such manpower challenges.
"There are no takers for the denter and painter training course offered as a defined course under ASDC. Unless we have takers, we will still be creating more infrastructure without having skilled manpower," Sanghi added on a cautionary note.
Graham Threlfall made his comments on the topic and said, "There is a risk that if a bodyshop doesn't have the required skill set to conduct a repair, it could lose the customer forever even for a routine service."
According to RK Duggal, "I am very optimistic about bodyshops as in the long run, the market will improve. With roughly 8-10 percent increase in used-car sales as well, the need for repair in these vehicles is also very important."
Vivek Sahai said, "As we add more cars on the roads, the chances of accidents increase. OEMs and dealers acknowledge that there are not many reductions in BPROs but there are certain changes in the scenario. We have to relook at the business model and evolve to be more efficient. Having said that, the opportunity always exists as a scratch cannot heal on its own. India needs to adopt menu-based pricing fixed by the OEM which is also announced to the insurance companies. Need to have different manpower to handle cosmetic repair and regular repair," he added.
Making the final remarks for the day, Gautam Prasad said, "Despite the downturn, bodyshop orders have either stayed flat or gone up which is a result of not just the car parc increasing but also the infrastructure lacking in its finesse. Safety standards of bodyshops in India are very poor and even insurance companies are shy of passing complete claims.”
The day-long event concluded with the panellists and audience of the consensus that technology is set to transform the automotive refinish business and upskilling is required to enhance workmanship and quality of repair, all of which will help enhance the level of customer satisfaction.
Also read: Industry experts debate aftersales best practices in India at AkzoNobel RepairTalks 2018