Monday, December 10, 2007

bodyshopnewsAsia volume 1-number 2 (forthcoming)...

You know what...if you are not in the mood for can look blanklessly onto your notebook or PC screen wherever you are...and nothing...absolutely nothing comes out of your brain. Sometimes, well, most of the time, pressure does have its merits...hahaha. Michel emailed and texted me profusely, from Sydney, Australia, chasing after my 2nd article for his BodyshopnewsAsia industry magazine. And here's the result of that pressure...hahaha...

A Continual Balancing Act…

I just finished reading the international bestseller ‘Freakanomics’ by Steven D Levitt & Stephen J Dubner, dubbed as rogue economists exploring the hidden side of everything. Telling us to assume nothing, question everything. It’s at the heart of everything we do and the things that affect us daily, from sex to crime, parenting to politics, fat to cheating, fear to traffic jams and it’s all about using information about the world around us to get to the heart of what’s really happening under the surface of everyday life! What immediately comes to my mind, is always trying to relate what I read and making sense of it within the context of our own industry. Where are the commonalities? For example: what do insurance agents and the Klu Klux Klan have in common? Why do parts dealers live with their mothers? How can the car you drive affect (not reflect) how well you do in your life?

The automotive industry (according to accounts for almost 11% of the developed world economy. It is complex, heavily politicised and riven with economic contradictions. It also faces unprecedented environmental challenges, to which it is not responding as well as it should. Investors, governments and even those running businesses in it often have difficulty making sense of it or of where it should be headed. In another report, John Wormald said that half of the profits in the auto industry in Europe comes from the sale of spare parts. Although they represent less than 10% of industry turnover in the region (Europe), the sector is now critical to the survival of many car and component suppliers. Selling parts and servicing cars is what keeps franchised dealers alive. This, according to the report, means that the aftermarket massively cross-subsidises new vehicle sales. (I mentioned something to that effect in my previous article, taking place in our markets as well.) What caught my further attention about that report is that, it seems that ‘the aftermarket is ill-documented because it is so complex and that has made it easy for the industry to hide behind it’. The report also said it is the ‘Cinderella of the Industry’ and yet it can make or break the economics of the sector. It is also the front line in the relationship with consumers. I suspect some of the salient features highlighted in that report is probably prevalent in developing economies in these parts of the world. Autopolis, according to their website, together with Ethos Consulting of Kuala Lumpur, also wrote a policy-oriented report which ultimately became the new National Automotive Policy (NAP) for Malaysia in 2006.

Which brings me to Proton our national carmaker. The impending partnership with a foreign strategic partner, it seems, is now off. It stirred the market, there was a great debate, with fund managers & analysts, as usual, making their analysis about how and why major decisions should be made in public-listed companies, especially government-owned or linked companies, like Proton for example. The media was again adorned with reasons given by the government as to why the negotiations were aborted for now. Conventional wisdom was the order of the day, which I shall not bore you with the details as you probably, had already read online. I suspect freakanomics wasn’t taken into consideration in the decisions of the powers-that-be, but the consolation was that, Proton’s options were kept open for negotiations with interested foreign or local parties again at some future date, perhaps.

We at Motordata Research Consortium (MRC) in partnership with THATCHAM (The Motor Insurance Repair Research Centre, funded by the Association of British Insurers), being the custodian of the Malaysian national centralised database for repair estimation, continue to build bridges, setting standards, encouraging enhancement of skills in all related sectors (general insurance especially the claims department, bodyshops, adjusting firms, auto manufacturers etc etc), in short, continuously encouraging lifelong learning besides our core responsibility of containing cost of claims for the general insurance industry. Similar to other like-minded research outfits elsewhere in the world, we are also members of the global Research Council for Automobile Repairs (RCAR – . The recent RCAR annual conference was held at Salvador, Brasil (hosted by CESVI Brasil) and the forthcoming 2008 RCAR annual conference will be hosted by CESVI FRANCE. HeiTech Padu Berhad ( , a homegrown IT main board public-listed company in Kuala Lumpur, owns 60 % of MRC while the remaining 40 % is owned by Malaysian Reinsurance Berhad (
My colleague, Andrew Miller, Director of Research at THATCHAM-our partner, wrote to me recently to remind us of the fact that All of us involved in the automotive industry recognise the fact that the car is changing – fast.

This change is driven by vehicle manufacturers who have to answer many questions when they launch a new design; it must be attractive to the motorist, whilst addressing environmental issues and the consumer’s requirement for advanced occupant safety as promoted by Euro NCAP.

These demands pose huge challenges for today’s automotive engineers who respond to them with creativity and flair, and who are increasingly specifying new and innovative materials and joining technologies into vehicle body design. This development will present new challenges to the bodyshop industry in our part of the world. Hopefully ‘the new blood’ (which I described in my inaugural article) will be able to adapt, adopt and adept, accordingly to reflect their entrepreneurial – management flair, savvy if you like, balancing the act to survive.
With vehicle designs becoming more complex, model specific repair methods are seen as vital if cars are to be repaired back to pre-accident condition with the original construction integrity and safety features reinstated and ready to protect occupants in the event of a second accident says Andrew.

Following closely after the launch of the BSI Kitemark standard for Crash Repair and the pioneering work of PAS 125, Thatcham has announced their intention to formulate a standard for crash repair methods. Currently repair methods are produced in a variety of formats, and many lack instructions for standard repairs. The lack of a common distribution channel and approach also diminishes their effectiveness. MRC, in reasonant with Thatcham’s thinking, therefore believes that a better approach would be for these repair methods to be formulated according to one recognised industry standard, encompassing all aspects of crash repair whether cosmetic or structural.

Finally, the inter-relatedness of the automotive, bodyshop (not to be confused with the vanity aspects of the human body), assessors and the general insurance industries must never be understated. While we pay attention to technical details, we must never lose sight of the underlying forces that ultimately drive every entrepreneurial endeavour. At the end of the day, consumer preference is determined by how their options are presented. Wishing everyone happy holidays, drive safely and a prosperous new year.

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


Beyb said...

Brillian article Bro! Congrates!


Beyb said...

Brilliant article Bro. Congrates