CIAG

The Collision Industry Action Group The Provincial Trade Association for Ontario

The State Of the Industry In Ontario

CCIF Mississauga

January 21, 2006

Contents

Organizational Chart

Objective

Mission

Priorities

Mandates

Small Business Climate

Current Industry Climate

Industry Issues

CIAG Today

Making A Difference

Organizational Chart

Northern

Southern

Western

Eastern

Provincial Board of Directors

Executive Board of Directors

Central

Industry Stakeholde

r

Advisory Council

CIAG Head Office Support

Executiv

e

V.P.

Objective

The NEW CIAG is committed to a provincial trade association built by the people, for the people.

“Your Industry, Your Future, Your Voice!”

An all-encompassing organizational model ensures every region within the province is given an opportunity to address regional issues and concerns, working collaboratively with experienced and knowledgeable industry leaders from across the province.

Mission

CIAG exists to further advance the legitimacy and positioning of the collision repair trade within the industry and amongst mainstream circles.

Priorities

PROVINCIAL TRADE UNIFICATION ON STANDARDS FOR REPAIRCOLLISION REPAIRER WELL-BEING

CONSUMER PROTECTION

Mandates

• Unification of the industry• Dedicated to working with those that

have a vested interest in the automotive collision repair industry

• Dedicated to the proliferation of progressive initiatives that will serve to strengthen and legitimize the collision repair trade and industry

Small Business Climate

Overall profitability decreasing dramatically

FACT: The Automotive Repair and Maintenance industry has seen a steady decline in net operating profit margins since the turn of this century.

1999: 11.9% 2000: 12.8%

2001: 10.5% 2002: 6.0%

2003: 5.2% Source: Stats Canada

Small Business Climate

Operational costs risingMajor Business Factors Affecting Performance in the Past 12 months:

Access to bank financing

Market wages

Labour availability

Insurance premiums

Energy prices

(Source: CFIB, Quarterly Business Barometer, December 2005)

Current Industry Climate

Operational costs risingFACT: 2006 WSIB premium increase of 3.9% and insurable earnings rising to $69,400.

FACT: Minimum Wage has increased from $7.15 in 2004 to $7.75 in 2006; going to $8.00 in February 1, 2007.

FACT: Insurance premiums for property and liability coverage increased up to 30%.

FACT: Increased property taxes.

FACT: In 2004 - 2005: The average hourly wage for trades (in general) increased by 2.4%. ** no benefits or pension **

Source: Stats Canada

Current Industry Climate

FACT: In 2005: The average hourly wage for an auto manufacturer assembly linesman was $28 per hour (excluding benefits and shift work premiums)

Consumer Price Index: (Cost of Living)

1995: 104.2 2000 : 113.5 (+ 9.3%)

2004: 124.6 (+ 11.1%) 2005: 127.5 (+ 2.9%)

Ontario Collision Repair Facilities must increase journeymen wages by 4% - 6% to stay competitive and not lose skilled workers to other industries.

Source: Stats Canada

Current Industry Climate

Service profit margins decreasing

FACT: Negotiation trends between collision repairers & insurers include:

A. Discounts on parts

B. Volume discounts

C. Guaranteed severity

D. Rental concessions

E. Free storage

F. ALL OF THE ABOVE!

HOW CAN HOW CAN WE WE

GUARANTEGUARANTEEA SAFE EA SAFE REPAIR?!REPAIR?!

Current Industry Climate

Collision repair volumes decreasing

FACT: Auto Insurance Claims Frequency compared to 2001: 2003: 40%

2004: 30%

2005: 25%

FACT: In 2005 some insurers downsized DRP lists

FACT: # of Total Losses

FACT: In 2005 towing chasers increased across the province

Current Industry Climate

Traditional collision work sources are changing

Volumes are not improving by much, therefore shops must look for alternative markets.

Retail Charging Retail Door Rate, (instead of Wholesale Rate)

Menu Pricing

Online Services, i.e. Appointment Scheduling, production updates

Creative marketing

Current Industry Climate

Formula For Success

A) Overhead Costs Labour Rate

B)Labour Rate Profit Margins

drive

drives

Industry Issues

Industry issues which may adversely affect business

Consolidation of reporting regulations to provincial government

More stringent guidelines to controllingVOC’s

No standardization of claims and repair processing

New regulations introduced without industry sector input

CIAG Today

Currently working with Provincial Government on 3 program initiatives that aim to:

– Centralize ministerial regulatory requirements– Streamline new environmental emissions

requirement in an effort to minimize cost factor to repair facilities

– Educate consumers on their rights; and moderate conflict resolutions, as they relate to the collision repair industry

CIAG Today

Currently Government lobbying for:

Provincial legislation to mandate towing tenders across Ontario and criminalize chasing

Provincial legislation mandating business license at provincial level with effective enforcement

Provincial legislation to rescind the PST Remittance for material costs and double taxation

CIAG Today

Currently Industry lobbying for:

Standardization of claims and repair processing by insurers and collision repairers

Inclusion of “Not Included” items as part of blueprint

Validation by estimating data system providers of numbers and application methodology

CIAG Today

Currently Consumer lobbying to:

Restore consumer confidence in the industry Educate consumers on the repair process and

their rights as part of the service contract

Making A Difference

What is integral to securing a future for the collision repair industry in Ontario is

not short-term solutions and concessions; Instead it is the

establishment of a solid and stable infrastructure for the industry-at-large; one that will promote positive change,

support standardization, and will lead to the longevity of the trade, and the

opportunity of prosperity for ALL… CIAG

Thank YOU

Your Indust

ry,

Your Future,

Your Voice