I’m hoping that 2012 turns out to be a great year for those in the automotive glass repair and replacement (AGRR) industry or if great is too high a bar to set at the very least better than 2011. In my opinion there are few key things that need to happen (and perhaps more than a few) for 2012 to be a great year. I’ve listed some of my hopes for 2012. Perhaps some are on your list as well.
- Our industry is affected by three key business drivers: weather, the economy and miles driven. Sadly we have no control or influence over any of these so I’m hoping for some luck for 2012.
Weather – I’m hoping to see “good” weather this year. I think you know what the definition of “good” means. For the most part 2011 was a “good” weather year.
In many markets, the AGRR industry and all those affected by it rises or falls depending upon the severity of the winter season which means snow. A severe winter brings increased breakage while a mild winter has the opposite effect. Annual demand obviously can vary considerably based on those weather fluctuations. I have many friends that compete in the snow-belt and at this time of the year they are looking at weather reports day-in and day-out to see when and where that next big snow will be. That snow, of course, has to come in the right amount and at the right time of day for maximum effect and that would be during rush hour. It would be great to see snow come in every other week so that after that big snow there would be sunny weather that follows allowing all those new repairs and replacements to be completed. If there is no snow, owners/managers are forced to make tough decisions they’d prefer not to make relating to cutting expenses, so please let it snow. Snow brings out plows and salt trucks. If the area you live in still uses gravel or coal or sand, even better.
Then there is ice. Ice can be even better than snow for the AGRR industry. Then there are cold snaps that can cause star breaks to run out when drivers go out and clean frost off windshields on cold mornings with scrapers or even better – hot water. And when drivers turn on the defrosters to get rid of frost and warm air hits cold windshields.
Hail is nice too. Of course not too small that won’t break the glass, but not too big either. Just the right size will do. Rain isn’t ever really that good for our industry, but if it does rain please let it rain at night.
The Economy – My hope for 2012 is that in the United States and everywhere else in the world the economy becomes robust. Since 2007 -2008 the economy in the United States obviously has not been robust. During economic downturns many who experience auto glass breakage – the “do nothings” – delay repairs and/or replacements. Everyone in the industry hopes that as the economy improves those “do nothings” will replace that broken auto glass.
A fully-employed workforce in the United States would be great. My hope for a robust economy includes the wish that everyone has a great job and that its a great paying one. All those fully employed people should have a car too — actually several cars would be even better. It would be great if all those cars would be fully insured with a zero dollar comprehensive insurance deductible. And, since these are my hopes for 2012, I hope that all those cars are fully insured with an insurance company that doesn’t use Safelite® Solutions as its auto claims administrator (I’m guessing most of you’d agree with me on that one). I hope everyone is going on vacations this year and preferably driving to all the beautiful places there are to visit and see in our great country.
A bad economy requires those competing in the AGRR industry to take an introspective look at their businesses. That introspective look should include “SWOT” – your strengths and weaknesses versus the opportunities and threats you face. How you deal with SWOT generally determines how successful you’ll be.
Miles Driven – Miles driven are key to auto glass breakage and my hope is that for 2012 gasoline prices remain “low” which will equate to more miles driven by putting more people in their cars and on the road providing more opportunities for drivers to break auto glass.
The total monthly vehicle miles driven have been growing since the federal government started tracking the data. In September 2011 the Department of Transportation’s Federal Highway Commission released an in-depth Traffic Trend Report. If you follow this link to a graph on miles driven, after hitting a moving 12-month high of 3.039 billion, yes billion miles driven in the rolling 12-months ending in November 2007 the graph shows a down-tick in estimated vehicle miles driven that occurred in 2008 – 2009. Thankfully the miles driven appear to have somewhat stabilized for now.
But the cost of gasoline is a major influencer relating to total miles driven. On December 18, 2011, a Chicago Sun Times (Chicago Sun Times article) article titled “At gas pump, 2011 was the year of the big squeeze” reported on the annual cost of gasoline for the average American family in 2011. The opening line of the article stated, “It’s been 30 years since gasoline took such a big bite out of the family budget.” The article goes on to report, “the typical American household will have spent $ 4,155 filling up this year, a record. That is 8.4 percent of what the median family takes in, the highest share since 1981.” This wasn’t good news for AGRR retailers in 2011.
On January 6, 2012, a Los Angeles Times (Los Angeles Times article) article titled “Gasoline prices start the year at a high – and rising” reported on how gasoline prices are starting out this year. The article states, “but this also may be the year of the gas-pocalypse, analysts warn. That’s because gasoline prices are the highest ever for the start of the year, and they’re on the rise, supercharged by expensive oil and changes in refinery operations.” That’s certainly not good news for AGRR retailers looking for 2012 to be a better year than 2011.
The AGRR industry really needs to see lower gasoline prices that will cause a spike in miles driven for its business outlook to improve in 2012. Based on predictions made by Edward Morse, head of commodities research at Citigroup Global Markets, Inc., on December 22, 2011, on Bloomberg Television’s “Surveillance Midday” that doesn’t seem likely. If you follow this link Mr. Morse talks about factors affecting the crude oil market and the outlook for oil and gasoline prices. You’ll see that he holds out little hope for “low” gas prices in 2012. Mr. Morse sees the floor for gasoline prices to be $ 4 by the end of May 2012. That’s certainly not good news for AGRR retailers in 2012.
My hope for 2012 is that gasoline prices are low and miles driven are high. Based on the realities of the marketplace and comments from experts you’d better cross your fingers and say a prayer for that one.
- I’m hoping that in 2012 some entity – some organization or company in the AGRR industry steps up and becomes a leader for the industry. By the way, I’m certainly not suggesting that the “market leader” can assume that role. I don’t think that’s possible. I am hoping that leadership is shown by someone who really cares about the AGRR industry and the issues that it faces, offering positive ideas for all to improve the valuable services that the industry provides to consumers.
- I hope to see fewer imports of auto glass manufactured overseas coming to the United States/North America and the imports that do come to our shores at least be from those companies that are major suppliers of Original Equipment Manufactured auto glass to car manufacturers and not those who primarily make after-market parts.
- I hope that every windshield that needs replacing in 2012 is replaced using the Auto Glass Safety Council’s auto glass replacement standard known as the AGRSS® Standard. The standard is accredited by the American National Standards Institute (ANSI) standards development organization. The AGRSS® Standard (ANSI/AGRSS® 002-2002 Automotive Glass Replacement Standard) is North America’s only auto glass replacement standard and it addresses the proper procedures that must be used by auto glass technicians, along with other company employees who are also important to ensure the safe installation of auto glass. No other company or organization maintains any standard remotely similar to AGRSS®. I also hope that replacements are completed using a urethane that provides a 1 hour safe drive away time. Your customers deserve nothing less.
- My final hope is that someone steps up and attempts to compete on a larger scale against the market leader. The industry really needs a strong competitor to Safelite®. I really don’t care who that is, but come on already. Somebody step up on the retail or third party administrator side and give them a go.
I hope everyone who competes in the AGRR industry the best of success and luck in 2012.
And finally I’m hoping for a great 2012 for myself.