New research from the Center for Automotive Research (CAR) emphasizes the need for the automotive industry to keep pace with ever-changing technological advancements and employee expectations — a stance that shouldn’t be unfamiliar to collision repair businesses.

“It may be cliché to say that the auto industry stands at a historic crossroads but this reality also brings an unparalleled opportunity for exponential growth while building a foundation for the next 100 years,” CAR wrote in a recently published whitepaper. “Developing an agile, resilient organization with a focus on people, processes, and technology is key to addressing uncertainty and mitigating risk.”

CAR says that not only has the automotive industry faced worldwide economic impacts from the COVID-19 pandemic but it’s also facing several worldwide and U.S.-based economic impacts. Those include the Middle East conflict, the ongoing Russia-Ukraine war, diplomatic and trade tensions with China, the possibility of further monetary tightening by the U.S. Federal Reserve and a possible recession, and ongoing concerns regarding the rapid growth of AI use.

“Stir in a healthy dose of [Connected, Autonomous, Shared, and Electrified] CASE-driven industry transformation, escalating demand for battery minerals, EV adoption challenges, political turbulence, and changing consumer expectations, and it becomes clear that today’s automotive industry is facing unprecedented change and uncertainty,” the whitepaper states.

“The very nature of the automobile, and automotive transportation in general, is transforming today at a greater rate than ever before, arguably more so than the shift from the horse and buggy to the horseless carriage itself. The sheer scope of this change is dizzying, resulting in newly emerging product and service offerings difficult to imagine only a few years earlier.”

While OEMs are adding more advanced driver assistance system (ADAS) features, the National Highway Traffic Safety Administration (NHTSA) is also standardizing requirements with a new Federal Motor Vehicle Safety Standard (FMVSS) that will make AEB, including pedestrian AEB (PAEB), standard on all passenger cars and light trucks by September 2029.

Dave Gruskos, Reliable Automotive Equipment, Inc. president, recently told Repairer Driven News the evolution of technical advancements that started with companies, such as Mercedes-Benz, 25 years ago used to take a decade or more to become industry-wide. Now, similar advancements can be widespread within a year of introduction to the industry, he said.

“Everything is evolving to the next level,” Gruskos said. “There is no simple vehicle.”

CAR notes several automotive shifts underway that it believes to be significant:

• • Internal combustion engine (ICE) vehicles to new energy vehicles (NEVs)
  • Hardware- to software-designed vehicles
  • Toward autonomous transportation
  • Vehicle ownership to transportation as a service

While the whitepaper focuses on business strategies for OEMs and suppliers to consider, they’re noticeably applicable to collision repair businesses as well.

Those include:

• • Accepting uncertainty and developing enhanced “sense-and-respond” capabilities to stay ahead of unprecedented change and disruption
  • Proactively anticipating key trends and developments to further mitigate risk and gain competitive advantage
  • Placing customer-centricity and operational excellence at the center of business strategy
  • Thinking beyond organizational boundaries to embrace the entire automotive ecosystem
  • Developing a holistic understanding of customer needs, motivations, and expectations across the entire value chain

Data and cybersecurity

Debate is ongoing in the U.S. and Europe over OEM access to data both through the “right to repair” movement and otherwise. However, CAR encourages data collection by OEMs and suppliers to serve as revenue streams and as a means of keeping up with technological advancements. 

“…automakers can now access a wealth of information never before available,” CAR’s whitepaper states. “In this data-rich ecosystem, competitors best able to utilize data for analytics and modernizing business processes will obtain a first-mover advantage in exploiting new opportunities and reducing risks.

“Advanced technologies are reshaping the automotive value chain in many ways, arming automakers with opportunities for new revenue streams, cost reductions, and risk mitigation. However, enterprises must adopt a comprehensive technology strategy to achieve such results.”

OEMs and suppliers are encouraged by CAR to use all data — while it’s a “daunting endeavor” to collect, store, and integrate — “the rewards are considerable” by “providing modern data-hungry advanced analytics and AI/ML [machine learning] applications with the fuel necessary for next-generation business insights and process automation,” the whitepaper states.

CAR adds that the collection and storage of data also comes with the responsible stewardship and liability of it as well as all onboard software, regardless of who developed it. CAR notes the threat of cyber attacks will “continue to grow over time in direct proportion to the exponential growth in connected devices and systems.”

“Automakers cannot manage this responsibility casually, underscoring the need for proactive data stewardship and compliance,” CAR wrote.

When it comes to cyber attacks, CAR notes a single incident can compromise the integrity of operational data sets and potentially cause devastating liability-related costs and risks.

“Further, in the face of such occurrences, it is not unusual for companies to overreact and introduce onerous new barriers to communication and collaboration,” the whitepaper states. “To guard against such situations, organizations should implement processes and protocols such as role-based security and multi-factor authentication in an expedited manner.”

People-related strategies

Amid a talent shortage, not only of repair technicians but across the automotive industry that is in competition with other tech-based and other skilled trades industries, CAR recommends companies adopt a “whole person” talent development strategy. The strategy accounts for a generational shift in expectations by Millennials and older Gen Z employees.

“Decision rights should be pushed down to facilitate employee empowerment, organizational agility, and responsiveness,” the whitepaper states. “The modern digital workforce, primarily Millennials and older Gen Z, is motivated by more than just financial incentives. Accordingly, companies need a ‘whole person’ strategy, which provides employees with meaningful and impactful work, growth opportunities, a collaborative, flexible work environment, alignment with their values, and opportunities for self-actualization through participation in personally consequential causes.”

All of those actions have been encouraged by others as well including the Society of Collision Repair Specialists (SCRS) and I-CAR based on its 2023 survey of collision repair technicians.

Skills development is another necessary factor of employee retention and recruitment, as noted by CAR, SCRS, and I-CAR.

“No matter their role, every employee — regardless of level — now needs a significantly higher degree of technical expertise than what was necessary less than a decade ago,” CAR wrote in its whitepaper. “The pace of this change will only continue to accelerate, underscoring the need for role-specific training delivered just in time, utilizing various learning methods.”

In efforts to keep pace with those changes, a shift in perception of the collision and automotive repair industries is underway from a grease monkey-type job to a sophisticated technology-centric and advanced knowledge-based learning environment to repair and maintain ADAS and other facets of modern vehicles. The hope is that the more the stigma of an automotive and collision repair world that no longer exists is removed, the better technician recruitment and retention will be.

‘Call to action’

Wrapping up its synopsis of automotive industry trends, CAR recommends the following “call to action” items:

• • “Listen to the environment — read how the winds are blowing within the global automotive industry as well as in adjacent industries and the economy as a whole;
  • “Prioritize speed over stability — In the digital era, success will belong to those who can best sense—and ideally anticipate—challenges and opportunities and respond fastest to them. The traditional approach of seeking certainty before acting is inherently risky in a business environment as dynamic and fluid as today;
  • “Leverage technology — When properly aligned with business objectives, technology can be the secret weapon in a company’s arsenal to combat uncertainty and emerge stronger from the transition;
  • “Align the organization and culture — Redesigning the organization for greater agility and transparency and fostering a culture of trust and collaboration; and
  • “Actively manage the change — A key requirement for a successful change program is executive sponsorship, which is then cascaded down through the various levels of the organization.”

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