Las Vegas, NV (PressExposure) June 27, 2011 -- Arash Hashemi has spent more than 17 years in automotive industry; Arash's entrepreneurial skills took notice of Earl Scheib, which ceased operations nationwide on July 16, 2010. Earl Scheib, Inc., together with subsidiaries Next Day Paint And Body, engages in the operations of auto paint and collision repair centers for retail consumers and businesses including fleet services in the United States. It offers partial and full repaints, and factory color matching, as well as services that cover peeling, cracking, and excessive loss of gloss and auto collision repair services, including dent repairs, parts replacement, and body repairs. In addition, the company produces paint coating systems for use by original equipment manufactures. As of April 9, 2009, Earl Scheib operated 85 automotive paint and collision repair shops located in approximately 77 cities in the United States.
By using his aggressive retail strategies Mr. Hashemi launched auto painting and body centers across the U.S. In this Executive Interview, Mr. Hashemi talks about Next Day Paint And Body's plans and his aggressive growth strategy in the collision repair market in the country.
By Dan Walton
Arash Hashemi has taken the collision market by storm, using aggressive retail strategies to develop auto painting and bodywork markets across the U.S. He's in route to being instrumental in developing the chain evolving merchandising, sales and operating systems to revolutionize the collision market.
In this Executive Interview, Hashemi talks about warpath growth, its process improvement and its aggressive growth strategy in the collision repair market. Why does everyone have the perception that Next Day Paint And Body is another corporate is fast and cheap facility?
One of the reasons is the marketplace we've historically played in and the perception of being compared to our competitor like 1 Day Paint And Body or Maaco.
It's the same conversations we've had with insurance executives over the last year who didn't know about all the things we can do. If you think of Next Day Paint, you think that our shops are filled with 12-year-old Fords. You think that we're painting older cars and people are spending a couple hundred bucks because we advertise $349 or whatever price. The problem is that over half of our work today is late model spot repair work like 2010 0r 2011. Why don't people know that?
If you look at how we market, we market heavily to that overall paint customer. There's no compelling reason for people to paint their car other than they think they're really going to like it, the price point represents great value and it's going to be convenient.
The clients we've talked are stating they prefer our facility then insurance recommended direct repair facilities or DRP.
Our marketing message is following the classic body shop standards in painting a late model car will put the price point at close to $5,000 because you're going to, strip the paint, repair the metal, replace parts, put really good substrate on it, use a high-end basecoat/clear coat, color sand and polish, etc. Our competitors Do NOT use this is the process that occurs at Next Day Paint And Body, What we ensure Next Day Paint And Body shops can handle repairs of newer vehicles. We redefined our standards for paint jobs, collision repair and spot repair and ensured that those processes were part of the Next Day Paint And Body system. It included prepping for spot repair, proper color match and blending, and polishing.
We've started for doing regular inspections and are constantly evaluating how our centers are treating our customers. If a problem emerges with a customer, we get involved right away. If need be, we take the vehicle to another shop, pay for the repair and guarantee it.
The problem is that since we are a new company merging our marketing hasn't caught up to all the services we offer. So we're trying to position ourselves through marketing so that people understand the scope and breadth of what Next Day has to offer. We want to let people know that whether they want to pay out-of-pocket for a late model job, go through insurance and have the vehicle put back perfectly, squeeze a couple more years out of an older car or get a state-of-the-art paint job, we can do all that.
The collision repair industry is struggling right now, and there are a lot of investors who might take one look at it and run as fast as they could the opposite way. Clearly, Next Day Paint And Body is taking the opposite approach. What does Next Day see that others don't
People point to what happened to Giant Collision Centers a few years ago to illustrate how difficult it is to eke out a profit these days. But with any business, the key is to have a diversified product service mix. If we put all our eggs in the one basket of doing all DRP work, we would find ourselves in a similar situation as others was.
We're not interested in being the nation's DRP provider. We believe there's a mix of work at every Next Day Paint And Body center that looks a certain way: a certain mix of insurer pay, customer pay, later model minor scratch and dent repair, and overall car painting and fleet.
The standard mix of work we ideally work toward is 15 to 20 percent late model insurer-pay work and 80 to 85 percent customer-pay. We would like to expand insurer pay so it's more like 30 to 35 percent. But the real objective is to grow the total number of units produced in a store. If the average is 5 to 7 vehicles per day per store, we want to increase that to 9 to 12 units daily.
The market is shrinking and a lot of shops are going out of business. Are you looking at what's happening as an opportunity to gain market share and leverage the number of shops it has to establish business relationships with insurers as one part of its strategy?
Are we pushing people to convert their body shops to Next Day Paint And Body. NO, we are looking to re-open shops that failed and bring our successful plan into it, what these shops are looking for is an exit strategy. By converting the to Next Day Paint And Body, the shops become significantly more updated.
Our system is predicated on the ability to provide more value to customers by doing more work. Therefore, we need to drive more prospects to the door and convert more of those prospects into customers.
One of insurers' primary objectives is cost containment. How does Next Day Paint And Body intend on doing quality repairs at insurer-controlled prices?
Our system always been predicated on volume being a significant driver of the bottom line. One of our advantages is that we don't have a limited number of units trying to carry an entire fixed cost structure. Second, our system has always been heavily focused on waste management and cost containment. We have specific standards for managing the various labor, materials and parts costs. So if insurers are looking for discounts, our model certainly allows for that.
We create an extremely positive customer experience for insurers, and we have the administrative processes to not only able us to handle that at the center level but at the national level.
All our location are certified for late model repair.
Do you think that a shop owner has a better chance of getting better business if he or she converts to a Next Day Paint And Body?
Possibly, but at the moment that is not our strategy.
How does Next Day Paint And Body intend to combat steering?
To the issue of steering, all we want is for people to know the full story of who we are so they might consider us. We don't want insurance agents or claims reps to think that Next Day Paint And Body "doesn't do that kind of work." Again, we're not only trying to make an impact with the retail public but also those players in the insurance industry who will hopefully say, "Oh yeah, Next Day Paint And Body can do that."
All we want is our fair shot. We believe we have a big enough footprint and capability that if we get the right message out there, there's still plenty of work for everybody. The industry is shrinking but it's as much a function of what insurers are doing as it is what consolidators are doing.
Regarding your process, do you subscribe to the "Factory Way," or is it Next Day's own way
Our system has always had similar processes to factory paint, continuous improvement, etc. We're constantly evaluating where we stand. We do late-model repair, making sure we were delivering to the standards necessary, we discovered certain problems in our production system and started working with our stores to fix them.
One of the major issues most competitors have encountered concerned contamination control because the standard for late-model repair is "no speck of dust." Therefore, we unlike others start using a faster-drying clear coat. In order for us to finish vehicles in a production-friendly timeframe, we had to reconfigure our production process at the top level. It is a little bit of a cultural shift for us but it increases profitability and allows us to give more value to customers. The more efficient you are, the more value you can give.