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Sales dip, profits up, at Trinity

Franchised bodyshops: an easy life taking work from carmakers or in the insurance mixer with independents?

There has long been an element of snobbery among independents towards franchised bodyshops. Many bodyshops hitched to a franchised dealer pale against independents on quality of repairs and business professionalism.

But it’s a sweeping statement to suggest all franchised bodyshops are in this mould. The ones that are successful businesses often function as standalone operations. Take the case of Trinity Accident Repair Centre in Hinckley, Leicestershire.

Two years ago the 55,000 sq ft bodyshop, part of Trinity Motors, was repairing 150 cars per week, with 85% of work directed from insurers and accident management companies. The rest came from the group’s Mazda and Land Rover dealerships. But the business was losing money.

Enter general manager Paul Hayes. A veteran of Nationwide Accident Repair Centres and, latterly, Churchill Insurance, he recognised the ‘busy fools’ syndrome afflicting the bodyshop. “Things needed to change,” he says, and they did.

The accident management work was rationalised – “accident management companies take a slice of a very small piece of cake” – and out went the worst of the insurance approvals.

Insurers, primarily Royal Bank of Scotland and Norwich Union, now account for 30% of business.

Filling the gap is fleet – Trinity has the AA contract, which makes up 40% of its work – retail, at 20%, and 10% from the franchises. Throughput has been cut to 120 cars per week, which enables Trinity to chase only profitable work.

#AM_ART_SPLIT# 70% success rate from approaches

“There is plenty of business that is not insurance work as long as you are prepared to go out and get it,” says Hayes.

He spends at least one day a week visiting companies to drum up work. “I live with the Yellow Pages by my side and for every 10 approaches I make I usually get a 70% success rate as I do my research and target the right companies.”

In addition to repairs, the centre does servicing, air-con, LPG conversions, high performance engines, off-site repairs and parts supply. With the investment made in the latest equipment, including Boran steel welding facilities and Optiflex wheel alignment, Trinity sees itself as a one-stop shop.

“We are a big bodyshop and however I have to fill it, I’ll do it, as long as it’s profitable work for us and the work provider,” he says. “The benchmark for the business in the past used to be on the number of cars going out the door. Now we measure it on the hours sold and our profit.”

More money from Premier contract

Hayes has created two contracts. The basic agreement covers the estimate and repair. The Premier deal adds collection/delivery, courtesy car (like-for-like in non-fault cases), valeting, and any other requirement for the company – but at a price.

“A lot of people are frightened to ask for more money because they are afraid to lose the business,” Hayes says. “But if you lose it on price, then it wasn’t worth doing in the first place.”

He takes the same policy with insurers. "We will do anything for them as long as it’s within our capability and they pay us for it in a timely manner."

Cynics would argue that Trinity can afford to take this approach because it has the safety net of the franchised dealer. “This is a big benefit, but we only get about 10% of our work from there.

The benefit is more about the good name of Trinity and its standing in the local area,” says Hayes. His 18 months as a general manager at Churchill Insurance gave a good understanding about insurers’ focus on costs and provided some fresh ideas.

Cost-cutting measures slashed unnecessary overheads: courtesy cars were reduced from 125 to 63, while the 3:1 non-productives to productives ratio was cut to 1:1. Some staff were converted into debt chasers – Trinity was poor at getting paid – while all staff can multi-task, with receptionists producing invoices and estimators doing reception work.

Trinity Accident Repair Centre now accounts for about 30% of Trinity Motors’ £56m turnover, and is back in profit.

“The industry is focused on the hourly rate from insurers – but it’s not about that. I can make more from £25 per hour than some can from £45 per hour by minimising my outgoings without affecting quality,” says Hayes. He believes many of the industry’s trade associations are keeping insurance companies and bodyshops apart “when they need to bring us together”.

Trinity is showing how all bodyshops – franchised and independent – can forge their own futures without being reliant on work providers. It is going from strength to strength.

#AM_ART_SPLIT# ‘Insurers look after every penny – like us’

Paul Hayes has sat on both sides of the fence – bodyshop and insurer.

His career started as a coachbuilder in the north east with his father. He progressed from the shop floor to general manager before joining Nationwide Accident Repair Centres, then still owned by Perrys Group.

He was there for six years, leaving in 2002 when Perrys sold the business and the new owners decided to pull out of the London area. Then came the call from Churchill Insurance. Hayes joined as general manager, staying for around 18 months.

“It helped me to understand how the insurers look at the bodyshop industry and their focus on costs because they don’t make a fortune,” he says. “They are looking after every penny, just like us. The experience gave me new organisational and management ideas but I missed the day-to-day running of a bodyshop too much. When I was approached to join Trinity I jumped at the chance.”

The business

Turnover: £16m
No of staff: 55
Productives/non ratio: 1:1
Size: 55,000 sq ft
Throughput: 120 cars per week
Hours sold per month: 5,000+

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