WKO and VVO: Through the crisis together

WKO and VVO: Through the crisis together

AUTOMOBILE INDUSTRY: Mr. Kubik, you are deputy to the Federal Guild Master in the Federal Vehicle Technology Guild. What is currently troubling the body and paint shops you represent the most?

MANFRED KUBIK: Now that the Corona dent has finally been ironed out, we are now struggling with the increase in energy costs, delivery bottlenecks for spare parts, higher prices for paint materials and a glaring shortage of skilled workers. Some companies actually have to reject orders because they don't have anyone who can process them. At the same time, non-brand companies have to invest heavily in new tools in order to keep up with the rapid progress in vehicle technology.

MOTOR INDUSTRY: Mr. Bayer, you head the technical office at the Association of Austrian Insurance Companies VVO. Do you think it is justified that the paint and body shops increase their hourly rates given the circumstances described by Mr. Kubik?

ALEXANDER BAYER: We of course understand the current situation of repair companies due to global economic problems and rising energy costs. However, we are monitoring the increases in hourly rates very closely and are conducting tough negotiations with trade representatives. The goal is always a compromise in the interests of the customer. We have been following a particularly customer-friendly approach in Austria since the 1970s by giving the customer the freedom to choose a workshop and billing the repair work directly to the workshop.

KUBIK: The positions are clear: the workshop always wants to get the maximum out of it, the customer and the insurance company want to pay as little as possible. The Austrian way means talking to each other and finding a solution. The fact that we only very rarely have claims pending in court shows that this is usually successful.

BAYER: I'll talk again about the sometimes exorbitantly increasing hourly rates. Due to the rising cost of living, Austrians are of course also saving on mobility. It wouldn't help anyone if we had to increase the premiums to such an extent that no one could afford comprehensive insurance anymore, we were no longer able to cover the risk and the customer had to bear this risk themselves. As a workshop owner, I should therefore always ask myself the following questions: Is the calculated hourly rate also reasonable for a private customer and do I know my cost hourly rate in order to calculate my hourly sales rate? And what happens after the crises have hopefully been overcome: Will I then reduce the hourly rates again?

KUBIK: On the other hand, it is not to be expected that insurance premiums will be lower if the billing rates fall. Those workshops that specialize in vehicle fleets are feeling the decline in business due to home offices and video conferences more than those that primarily have private customers. Unfortunately, we cannot influence the rising costs of spare parts and paint materials, so we are just the bearers of the bad news. Under these challenging conditions, the commercial skills of the workshop owner must prove themselves.

BAYER: In view of the rising prices for spare parts, workshops could, for example, increase their offerings towards repairs instead of replacements. In view of the climate and raw material crisis, it would also be a good idea to promote the repair economy. Ultimately, it has to be about satisfying the customer. It would be fatal for both the business and the insurance industry if the total loss rate increased due to excessive hourly rates. You should also think about what it means not to have any repairs from comprehensive insurance in your company. What does this mean for the capacity utilization of the company and its employees and could jobs still be secured?

KUBIK: I definitely agree with an increase in the repair business, especially given the fact that certain spare parts are simply not available. Bumper example: There have been repair systems on the market for 25 years. To my surprise, however, this has only rarely been forced by the insurance companies.

BAYER: In my past I was able to manage several workshops of different sizes and therefore know both the position of the commercial business and that of the insurance company very well. I was always happy when an insurance company stood behind a job, knowing I had a reliable payer behind a proper repair. In my view, the most important thing is to maintain constructive dialogue so that the overall structure of well-functioning claims settlement in Austria is not jeopardized. The common interest of the industry and insurers must mean that insurance must remain affordable.