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Manitoba Collision Repair Industry Study Final Report

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Manitoba Collision Repair Industry Study Final Report Manitoba Collision Repair Industry Study Final Report January 20, 2010 PREPARED FOR: Manitoba Public Insurance Automotive Trades Association of Manitoba Manitoba Motor Dealers Association PREPARED BY: Meyers Norris Penny LLP 2500 – 201 Portage Ave. Winnipeg, MB R3B 3K6 MNP CONTACT: Leslie Dornan, Partner Director, Consulting Services Phone: 204.788.6072 Fax: 204.783.8329 [email protected] Manitoba Collision Repair Industry Study TABLE OF CONTENTS PAGE NO. 1.0 Executive Summary.........................................................................................................................................1 1.1 General Overview of the Industry in Canada.....................................................................................1 1.2 Other Jurisdictions.............................................................................................................................2 1.3 Collision Repair Industry in Manitoba................................................................................................2 1.4 Summary Conclusions.......................................................................................................................4 1.5 Recommendations.............................................................................................................................5 2.0 Introduction and Background...........................................................................................................................7 3.0 Objectives and Scope of the Study..................................................................................................................8 4.0 Methodology and Process ...............................................................................................................................9 4.1 Stakeholder Consultation ..................................................................................................................9 4.2 Other Jurisdictional and Secondary Research ................................................................................10 5.0 Overview of the Collision Repair Industry......................................................................................................11 5.1 Industry Size and Composition........................................................................................................11 5.2 Financial Performance – Statistics Canada.....................................................................................13 5.3 Industry and Business Environment................................................................................................15 5.4 Trends Impacting the Collision Repair Industry...............................................................................23 6.0 Human Resources in the Collision Repair Industry .......................................................................................30 6.1 Occupations in the Collision Repair Industry...................................................................................30 6.2 Labour Force Characteristics ..........................................................................................................32 6.3 Compensation .................................................................................................................................36 6.4 Training and Certification.................................................................................................................39 7.0 Other Jurisdictions Models ............................................................................................................................43 7.1 Saskatchewan.................................................................................................................................43 7.2 British Columbia ..............................................................................................................................44 8.0 Collision Repair Industry in Manitoba ............................................................................................................48 8.1 Survey Population ...........................................................................................................................48 8.2 Survey Response Rate....................................................................................................................49 8.3 Business Structure ..........................................................................................................................51 8.4 Human Resources...........................................................................................................................57 8.5 Major Business Processes ..............................................................................................................66 8.6 Financial Performance.....................................................................................................................69 8.7 Business Succession.......................................................................................................................83 9.0 Major Observations and Conclusions ............................................................................................................87 10.0 Recommendations.........................................................................................................................................89 Meyers Norris Penny LLP | Table of Contents Manitoba Collision Repair Industry Study Appendix A: MPI Accreditation Agreement Appendix B: Stakeholder Consultations Appendix C: Data Collection Tools Appendix D: Research Sources Appendix E: Financial Performance Indicators for Automotive Body, Paint and Interior Repair and Maintenance Appendix F: General Economic Trends Appendix G: ICBC Sample KPI Report Appendix H: Overview Major Business Processes Appendix I: Fair Market Value Adjustments used in Financial Analysis Appendix J: Comparative Average Income Statements by Revenue Category ii Manitoba Collision Repair Industry Study TABLE OF FIGURES Figure 1: Automotive Body, Paint and Interior Repair and Maintenance Establishments ...........................................11 Figure 2: MPI Accredited and Non-Accredited Vendors..............................................................................................12 Figure 3: Automotive Body, Paint and Interior Repair and Maintenance Establishments by Number of Employees..12 Figure 4: Financial Ratios for Automotive Body, Paint and Interior Repair and Maintenance (NAICS 811121)..........13 Figure 5: Automotive Repair and Maintenance Financial Performance – Statistics Canada ......................................14 Figure 6: Profit Margins by Province – Statistics Canada ...........................................................................................14 Figure 7: Claim Payments...........................................................................................................................................16 Figure 8: Claim Severity..............................................................................................................................................17 Figure 9: Payments per Shop - Manitoba, B.C., Saskatchewan .................................................................................17 Figure 10: Payments per Accredited Vendor, Manitoba..............................................................................................18 Figure 11: Claims and Total Losses in Manitoba 2004-2008......................................................................................18 Figure 12: Total Losses as a Percent of Total Claims.................................................................................................19 Figure 13: CPI Manitoba and Canada.........................................................................................................................20 Figure 14: Unemployment Rate, Manitoba and Canada.............................................................................................21 Figure 15: Comparative Change, CPI, IAW, MPI Door Rate.......................................................................................21 Figure 16: WCB Assessment Rates - Manitoba..........................................................................................................22 Figure 17: WCB Assessment Rates by Province........................................................................................................22 Figure 18: Body Shop Business 2009 Industry Profile................................................................................................23 Figure 19: % of U.S. Collision Repair Shops by Size..................................................................................................23 Figure 20: Mitchell Parts Index 2003-2008...................................................................................................................26 Figure 21: Parts Use Trends (Canada)........................................................................................................................26 Figure 22: Paint and Material Costs............................................................................................................................27 Figure 23: Employment in Automotive Repair and Maintenance Industry - Western Canada ....................................33 Figure 24: Automotive Repair and Maintenance Labour Force by Age ......................................................................33 Figure 25: Automotive Repair and Maintenance
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