Thursday, August 02, 2007

(this article will be published in the inaugural
issue of bodyshopnewsAsia from Australia)

How do we ensure growth, success and sustainability in the auto body repair industry? Dov Seidman could not have framed it better when he took the idea of success even further by redefining it as a quest for significance, to have a positive impact, to make a difference, to excel. Isn’t that what we all really want? He shows us a new way to think about enduring success in times of change. The auto body repair industry in Asia has to quickly rise up to the demands of operating their businesses in a transparent, wired, global marketplace.

Closer to home, we continue to grapple with unending issues and challenges of the Malaysian auto body repair market. The auto body repair industry in Malaysia is part and parcel of the automotive industry, the motor insurance industry and other stakeholders. Auto manufacturers and insurers have common interests in ensuring on behalf of their common customers – the auto owner who is also the auto insurance policyholder – that auto repairs are carried out in a cost-effective manner and that the automobile being able to meet safety standards and are road-worthy.

The auto body repair fraternity in Malaysia plays no small role in the overall automotive scenario. While there are still ‘under the cherry tree’ type bodyshops, the repair industry is going through an interesting evolution. There won’t be any major revolution. That, I can assure you, but the industry is keeping up with the times. I spoke to the president of the Federation of Workshop Owners Association Malaysia or FOWOAM in short, Cho Chee Seng who himself is a New Zealand trained accountant. He tells me that the nation’s bodyshop repairers, are undergoing transformation and the stereotyped workshop owner is now passing over the baton to their children some of whom are engineers or have had tertiary education abroad in Australia, the UK or the USA. They see things from a different perspective and realize and accept that in order to sustain their business they need to embrace technology and adopt the ‘doing more with less’ approach with a global overview. Bodyshops like Thong Hin in Kuala Lumpur, Malaysia’s capital, Wong and Lau Motor Workshops of Ipoh, are some examples of this new wave.

FOWOAM has 3000 members according to Cho, and there are roundabout 15,000 repair bodyshops in the country (including, mechanics and machine shops and those that handle engine blocks as well). The ratio of bodyshops to mechanics in Malaysia is 1:3. Franchise bodyshops make up another 600 and the General Insurance Industry Association of Malaysia or PIAM-approved workshops stands at 800.

While the industry, generally, is not yet overly conscious with legislation and strict environmental laws like their counterparts in Europe, we are moving in that direction. In the UK for instance, the newly launched Publicly Available Standard 125 (PAS 125) in February last year has been touted by some as the savior of the body repair industry. Then there are other legislations or the BA5750/ISO9000 standards for example. But the PAS 125 is particularly important to me because it is industry specific, of a greater technical nature and is sponsored by the industry for the industry. We at Motordata Research Consortium (MRC), being the custodian of the national centralized database for motor repairs estimation, believe that PAS 125, has relevance to our market because its key drivers include, among others, the concern at the rapid increase in repair technology; the multicity and duplication of schemes by various stakeholders to which bodyshops are sometimes subject, causing unnecessary costs and downtime which affect everyone including the policyholder, the acknowledged and growing skills gap; the resultant ‘corporate risks’ of unsafe repairs arising from both legislation and corporate social responsibility; the impending inspection of repair supply chain quality processes and procedures; and the belief that PAS 125 will provide a platform for business improvement.

At the governmental level, the Ministry of Consumer and Domestic Trade, a legislation to license workshops under the Motor Vehicle Repair Maintenance and Services Act, has been drafted. The Malaysian autobody repair industry will soon be regularized (not necessarily regulated though) with the certification of mechanics, technicians within this industry sector. Vocational training with a much more structured approach is being revisited to meet the skill shortages. Again, the image of the industry is not helping efforts at raising the bar and attracting the young in making autobody repairs their career of choice. Other market factors affecting the local autobody repair industry includes, opening up of markets, liberalisation, AFTA et al and the perceived rise in manufacturers’ aggressive inroads into parts, services and after sales services so I was told.

On the automotive front, reports are adorned with news of PROTON’s (our national pride) impending partnership with VW. Car sales in the country are expected to pick up in the third quarter this year, after slipping 12 percent in the first half as reported by today’s mainstream daily. The nation is celebrating its 50th anniversary on August 31st and as the nation matures we hope that the autobody repair industry matures in reasonance. MRC is proud to continue playing its role in building bridges in the motor vehicle repair industries in Malaysia in particular, and in Asia, hopefully in the foreseeable future.

(Khaeruddin Sudharmin, Managing Director & Chief Executive of Motordata Research Consortium Malaysia was a keynote speaker at IBIS2006, Montreux, Switzerland)

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