Manheim's repair shop takes on retail

by Paul Schreiber

SBJ Reporter

pschreiber@sbj.net

In response to diminishing demand for auto body repair in fleet, rental repurchase and customer-service vehicle markets, Manheim Certified Auto Body Repair at 2945 W. Sunshine is now offering its services to the public.

Auto repair revenues were $2.7 million in 2003, said Lance Reid, general manager. Following the company's April opening of its services to the public, Reid expects that business to push sales beyond $4 million in the next 12 months.

Manheim Certified Auto Body Repair and 166 Auto Auction, located across the street, are owned by Manheim, a subsidiary of Atlanta-based, publicly held Cox Enterprises.

Why the shift?

Ford Motor Co. has been Manheim's largest commercial account locally, providing the Manheim 166 Auto Auction at 2944 W. Sunshine with vehicles to be remarketed, Reid said. The cars, after arrival, went through 166 Auto Auction's auto body repair shop and gave it a steady stream of business.

During a typical year, Ford repairs produced approximately $1 million, said Steve Agnew, manager of the collision center.

"The auction industry nationwide, not just 166, is experiencing a reduction in factory units and fleet lease units," Reid said. This slowdown has prompted Manheim's move to "take advantage of a huge marketplace that's out there that we really haven't taken advantage of before," he added, referring to the general public.

Ford is looking at the working cash it has wrapped up in car inventories at auction houses across the country and is trying to expedite the sales of those vehicles, rather than tying them up with preliminary repairs, said Agnew.

"As soon as they arrive at any auction, not only ours, they are set for sale," he said.

Marketing, insurance campaigns

Manheim is getting the word out on television, radio and billboards that its services are now available for retail and insurance work, Reid said.

About $7,000 was spent for television commercials, Agnew said. About $1,200 is allocated to radio ads and another $495 a month goes toward billboard exposure.

Part of Manheim's push to secure outside business is to get on the short lists of local insurance companies, such as State Farm Insurance.

State Farm is a major player and payer in automotive insurance locally. In 2003, the company wrote checks totaling about $87.5 million for car insurance claims within about a 100-mile radius of Springfield, said Bruce Coleman, auto claim team manager. Of that, $17.5 million was paid out of the Springfield office, he added.

"If we even got 2 percent to 3 percent of (Springfield area's) market share, you're talking about a lot of money," Agnew said.

Coleman said that insurance companies select repair shops they've had good experiences with in the past. Calling it a "service-first" relationship, he said these shops exhibit quality workmanship, ongoing training and a willingness to guarantee their work.

Manheim's repair shop has all the certifications necessary to obtain insurance claim business, said Gary Sly, Manheim auto body repairman. These certifications include I-CAR, Automotive Service Excellence and Dupont.

Competition

There seems to be enough auto repair business going around that local body shop owners aren't threatened by Manheim's market expansion.

Gary Burns, owner of 57-year-old College Street Body Shop at 2136 W. College, said he doesn't handle many insurance claims unless it's for one of his customers; he also doesn't feel Manheim's move will impact his bottom line.

Others agree.

"I don't think it will hurt our business," said Lona Bradford, office manager at Bradford Body Shop LLC at 1460 S. Bradford Lane. She said Bradford has done frame inspections and certain testing procedures on cars for Manheim prior to auctioning.

Shop expansion

The thrust to target new customers comes four years after 166 pumped $3.5 million into building its auto body repair shop, Reid said.

While the 46,000-square-foot shop has four bays dedicated to more routine engine services such as diagnostic tests, brake work, oil changes and general maintenance, it is the collision center that will continue to be the facility's bread-and-butter operation, Reid said. The repair shop employs 30, Reid said, with additional employees likely to be hired per volume increases.

Of the repair shop's $2.7 million in 2003 receipts, somewhere between $420,000 and $480,000 a year derives from engine repairs, Agnew said.

Originally established in 1949 by Melvin Reid, Lance Reid's uncle, as 166 Auto Auction, the company was bought by Atlanta-based Manheim Auto Auctions in 1988, Reid said. Manheim has 86 car auctions in the U.S.; a large percentage of which have repair facilities connected to them, he added.