To help dealers get more customer referrals from insurance companies, Toyota Motor Sales U.S.A. Inc. will certify dealership body shops.
Four Toyota dealerships are piloting the program, which is part of Toyota’s strategy to support dealership collision repair, said Roger Foss, Toyota’s national body shop business development and technician recruiting manager.
To become a Toyota Certified Collision Center, a body shop will undergo a two-day on-site evaluation. The shop will be measured on how well it conforms to 10 standards that range from business ethics to safety and environmental compliance. The standards incorporate performance, productivity and profitability.
Weaknesses will be pointed out during the evaluation, and suggestions will be made about how to fix the problems.
The pilot began in October; the national launch is scheduled to start in March or April. Dealer participation is voluntary, Foss said.
Currently, 465 of Toyota’s 1,200 dealerships have body shops.
The push to help body shops boost efficiency and effectiveness is designed to increase labor sales for dealers, increase parts sales for Toyota and offer another way to reinforce customer satisfaction.
NEW PROFIT CENTER
“We decided that it is an important part of our and our dealers’ future,” Foss said.
Each year, 1.5 million to 2 million Toyota vehicles are damaged, and $3.6 billion was spent last year to repair them, according to Toyota. Most of those vehicles are repaired by independent body shops, Foss said.
Most insurance companies have direct repair programs, which means they refer customers to a list of body shops. The recommended shops must meet criteria for equipment, training and pricing.
Toyota is instituting the support program to make sure its dealers’ body shops meet and exceed the insurance companies’ criteria, Foss said. It will focus on helping dealers in three primary areas:
1. Business operations – includes operating standards, consulting services, management training and marketing programs.
2. Technical support – technician training, certification and recognition; published repair standards; technical communication; facilities and equipment upgrading; and environmental compliance information.
3. Insurance industry support – encouraging insurance companies to direct customers to Toyota Certified Collision Centers; reinforce the use of genuine Toyota parts.
Since insurance covers about 90 percent of all repairs, it makes sense to build a close relationship with insurers, Foss said.
Early on, company representatives began meeting with insurance companies’ policy makers to learn how Toyota could build its dealership body shops to fit the insurance companies’ needs.
“They control direct repair,” Foss said. “We will continue to market these shops based on the quality of repair and the ease by which our shops handle customers. We can offer our parts at a competitive price.”
Joe Bertolami, owner of Toyota West in Statesville, N.C., is participating in Toyota’s program. He said his shop can compete with the industry’s best, but he has found room for improvement. For instance, at Toyota’s suggestion, Bertolami instituted a pay plan to reward employees for doing a good job.
“I’m impressed with what I’ve seen. I fully intend to be certified,” said Bertolami, whose body shop sales were $2.3 million in 1996.
Fred Hass Toyota in Houston is also taking part in the program. Vic Vaughan, the general manager, said the program will give his dealership an edge over competitors.
“Certification will give us a new level of credibility and let the insurance company know what we’re doing right,” said Vaughan, whose store racked up $3.5 million in sales in 1996.
While manufacturers have typically not been involved with dealership body shops, that seems to be changing. Ford Motor Co. launched “Body Shop 2000″ in January 1993 as a consulting and management program for its dealership body shops to help the shops improve sales productivity and quality.
Later this year, Toyota plans to develop materials to encourage other Toyota dealers to look at body shops as a business opportunity.
Body shop top 10
Toyota’s Dealer Support Program for body shops has 10 types of certification standards:
1. Business ethics 2. Customer satisfaction 3. Financial performance 4. Management practices 5. Marketing strategies 6. Production processes 7. Training/certification 8. Facility 9. Tools/equipment 10. Safety/environmental compliance
Toyota Motors Sales U.S.A. will certify dealership body shops to aid dealers in securing more customer referrals from insurance companies. Body shops will have to be subjected to a two-day on-site evaluation focusing on its conformance with 10 certification standards ranging from business ethics to safety and environmental compliance before they become Toyota Certified Collision Centers. Four Toyota dealerships will pilot the program.