Mike Black and others in the auto industry know that supply chain and other issues that have hit the industry as a result of the pandemic have not eased up.

Black, who is chief executive officer of Dent Wizard, mentioned various issues that have negatively affected the vehicle reconditioning industry and the auto industry as a whole.

“Obviously, the supply chain continues to wreak havoc for the entire space,” Black said. 

He mentioned issues such as unfilled parts orders. Shipping costs, fuel costs, labor costs, chip shortages for OEMs and new-vehicle production issues have presented major challenges in recon.

“The pandemic has driven intense pressure on companies across the industry,” Black said.

Several other representatives of the vehicle reconditioning slice of the auto industry agree that those and other issues that have affected the industry have not subsided, exposing the industry’s need for vehicles, the need for speed to sale and the need for labor.

The need for vehicles

Scot Wingo said the lack of new vehicles coming into the system is putting pressure on the used market and recon.

Wingo, who is CEO and co-founder of Spiffy, an on-demand car care, technology and services company, said his customers are acquiring used vehicles, and that is creating opportunities to recondition. 

As businesses such as rental car companies keep vehicles longer, that increases the amount of maintenance that must be done.

“It makes it harder to have good fleet utilization because when you have an aging fleet you are going to have 10% to 15% of vehicles having a problem of some kind,” Wingo said, noting that rental car companies that work with Spiffy kept vehicles until the 60,000-to-70,000-mile range or less and are now keeping them much longer.

Eric Meahan, head of operations for AutoMobile Technologies, or AMT — which provides enterprise-grade used-car reconditioning software — said that supply chain issues have meant that more auctions and dealers are seeing heavily damaged vehicles than they did previously. Repairify, which offers diagnostics, calibration, programming, and workflow services to automotive professionals, acquired AMT earlier this year.

“A lot of dealers are selling older, more heavily damaged vehicles than they would have in the past just because of the lack of used vehicles on the market and … cost of those vehicles,” Meahan said.

The need for speed

Because of the lack of inventory, many dealers are selling vehicles while they are in recon or directly out of recon, said Anthony Greenhalgh, director of marketing and sales operations for reconditioning software company, Rapid Recon.

“So, the emphasis on speed has never, ever been higher,” Greenhalgh said, adding that his company helps dealers improve speed to sale.

He continued, “And it’s not about holding costs anymore. It’s about if I can’t get a car to the front line, I’m not going to sell it to this guy. I’ve got buyers lined up that want to buy the car. They will go anywhere to get a car right now.”

The need for labor

Troy Blackwell says that with the past year being one of the most profitable for the auto industry in recent history, rental companies and fleets are reconditioning vehicles instead of automatically replacing them.

To meet consumer demand, industry members have been forced to become overnight experts in reconditioning, said Blackwell, who is chief operating officer for NuVinAir, a company that offers patented and proprietary products designed to create healthy vehicle interiors.

“Since customers are now paying more for used vehicles and daily rental-car fees, the quality of the car must stand tall,” Blackwell said.

He went on to discuss the nationwide talent shortage as a major industry challenge, which he said makes in-house reconditioning even more challenging.

“Moving forward, I anticipate more dependency on third parties that will impact the profitability of dealers and rental companies, especially when business begins to normalize,” Blackwell said.

Meahan of AMT said technology has helped fill the gap of the labor shortage.

“But it doesn’t exactly make up for the fact that there’s more demand than there is people to fulfill the demand,” he said.

To help in the area of the need for labor, Repairify this past November hired automotive training and development veteran Chris Chesney as vice president of training and organizational development. Chesney will help establish a training initiative for customers, industry partners, employees and the Repairify network of technicians.

The need for odor control

Wingo at Spiffy said in an Auto Remarketing article last year that vehicle odor elimination was a hot topic among consumers, and he said it still stands out as an issue this year. 

Concerns continue about smoke odors in vehicles, along with the vaping trend causing vehicle odors, as well. 

“And then there’s cannabis, so there’s tobacco and cannabis smoke, and those odors seem to be the ones that are really triggering folks that are … either buying used cars or renting cars,” Wingo said.

To help address the situation, Spiffy earlier this year released its Smart Tumbler product, which the company said can remove odors from organic materials, smoke molecules and bacteria in 15 minutes.

Other needs, trends

The importance of electronic component vehicle health is a factor these days as well. Repairify president Tony Rimas said an approximately 12-year-old vehicle is 80% car and 20% computer or less. A 2022 vehicle is around 60% or more computer, and the rest, car. 

“Vehicle diagnostics and diagnostic trouble codes are basically kind of the EKG of the vehicle,” Rimas said. 

He continued, “It’s that health check to understand what the potential symptoms of the issues are, the vehicle may have, just looking at the vehicle, right? Cosmetic repair or cosmetic damage, it’s super important to understand, are electronic control units working properly [or] are there any … CANBUS issues in the car.” 

Black of Dent Wizard said vendor consolidation continues as a trend.

“Having one reconditioning partner that simplifies the reconditioning, improves cycle time, and leveraging a variable cost model is truly becoming a reality with a significant percentage of our customer base across the dealer and rental channels,” he said.

He mentioned a pullback in cosmetic repair as another trend.

“Today, dealers are saying, ‘Hey the bumper’s hanging off … repair the bumper. The door panel’s crushed … paint that, but don’t worry about these minor imperfections,’” Black said. “They don’t want the little stuff handled because there’s such a demand.” 

But Black sees positive signs for the industry, saying the most disciplined dealers continue to execute their high standards in the area of used-vehicle reconditioning.

“The ROI remains a great investment,” Black said. “Dealers aren’t looking to sell just one vehicle to their customers. They ultimately want to create customers for the long term; hence, they want to provide their customers with a well-maintained and reconditioned vehicle that they will be proud to drive.”