The Impact of Supply Chain Issues on Auto Collision Repair
The COVID-19 pandemic took a significant toll on most industries worldwide. The auto collision repair industry continues to face long lead times on auto parts, a shortage of repair technicians, difficulty working with auto insurance agencies, and delayed shipping. All factors combined are causing many shops to quote up to six-month repair lead times to customers. Below, we’ll cover many reasons auto shops are continuing to deal with these delays.
Long Lead Times for Parts
With stay-at-home guidelines in place during the first few months of the COVID-19 pandemic, fewer drivers were on the road. Due to this, many states and cities saw a significant decline in auto accidents. With auto collision repair facilities ordering fewer parts, car part manufacturers started producing fewer parts to match this lower demand. When demand stabilized, auto body shops had a growing backlog of work, and auto parts manufacturers struggled in production due to raw material shortages. As of July, we’re still dealing with delays and shortages, causing longer lead times for auto parts. A shortage in the essential microchips for vehicle manufacturing has caused the value of used vehicles to increase, making finding used parts less common. According to a recent AutoBodyNews.com article, Greg Horn from PartsTrader said, “It is probably the latter half of this year when we start to see some relief on both OEM and the recycled parts side.”
Shortage of Repair Technicians
Like many other industries, auto collision shops are challenged by the national labor shortage. This can be attributed to many factors. During the COVID-19 pandemic, many industries were forced to move to a remote work structure. After recognizing the success of this type of structure and flexibility, many companies continued remote options, which are more attractive for many workers. Auto repair shops need team members to be on-site, making the jobs less desirable. Alongside this, the talent pool continues to shift toward more technology-driven jobs, which still hasn’t rebounded. Auto technician jobs are in high demand right now!
Higher Costs for Auto Insurance
Auto insurance companies are also feeling the pressure from the pandemic. With the shortage of microchips and auto parts, the value of these components has increased. Vehicle bumpers, headlights, and general raw material costs have almost doubled in many cases, which lowers the threshold for qualifying a vehicle as a total loss. Additionally, auto collision repair facilities are increasing their hourly rates to accommodate higher costs and reduced labor. These factors are putting pressure on auto insurance companies, causing delays in the auto repair process.
Delayed Shipping & High Shipping Costs
Global stay-in-place orders during the pandemic caused significant delays in worldwide shipping. The US Customs, in particular, is short-staffed, causing a continued higher-than-normal transition time through customs. Due to this, auto collision repair facilities are waiting for auto parts for up to six months. Plus, higher tariffs due to trade relations have caused an increase in shipping rates worldwide.
What Our Customers Can Expect
At Colorado Coach Auto Body, our certifications from the top auto manufacturers set us apart. We have access to more parts suppliers directly from the OEMs, ensuring the lowest lead time on repairs possible. We also have strong relationships with the top auto insurance agencies, ensuring we submit an accurate auto estimate the first time. Yes, we are dealing with supply chain issues like all other auto collision repair facilities. Still, we will continue to do our best to provide auto repair needs quickly and precisely. Reach out to us today to schedule your free estimate!
