Wayne Smolda, CEO, The CEI Group
Automotive fleets are experiencing just the beginning of an accelerating trend toward higher repair costs, greater risk of unsafe repairs, and more liability from victims of fleet accidents. That’s the latest view from Wayne Smolda, founder and chief executive officer of The CEI Group, Inc. Mr. Smolda makes the comments in the November December 2013 issue of Fleet Financials magazine, in a guest editorial titled, “Fleet Executives Must Be Futurists.”
Mr. Smolda cites several factors for what he said is “the beginning of a technology-driven increase in the cost of automotive accident repairs.” Among them are the increasing use of plastic, carbon fiber and exotic steel alloys by auto manufacturers in the pursuit of greater fuel efficiency; the extra time and expense it takes repair shops to complete repairs for vehicles with those materials, and a continuing proliferation of expensive safety technology that relies on sensors that must be replaced and precisely repositioned.
Meanwhile, he said that fleets need to be aware that not all repair shops in the financially pressed collision repair industry will be able to make the required investment in advanced tools and training to keep up with the changing content in the vehicles of the future.
“One potential outcome is that some shop owners will save money by repairing vehicles the same way they’ve done for years,” Mr. Smolda says. “The danger is inferior repairs, more crashes and significantly reduced vehicle resale values.”
The proliferation of traffic cameras and on-board electronic data recorders means fleets may have incomplete knowledge of who their most dangerous drivers are, and so are more vulnerable to negligent entrustment liability when those drivers cause accidents. Typically, traffic camera violations don’t cite driver names, while fleets may not be using all the data that telematics systems are capturing to identify high-risk drivers, he explained. “In court, this opens fleet operators to the charge that ‘you should have known what you could have known,’ ” he warns.
To minimize those risks, Mr. Smolda says fleets need to rely on suppliers who can help them evaluate repair shop capabilities, closely monitor repairs, and bridge the information gap to identify their high-risk drivers.