1. Volume Ten Number Four
Q4 2010
Published by Mitchell International, Inc.
Industry Trends
Report Feature in this issue:
Quarterly Feature:
The Trend in Estimate Severity
is Part Inflation and Part Parts.
by Greg Horn
Page 3

2. Industry Trends
Volume Ten Number Four
Q4 2010
Report
Published by Mitchell International, Inc.
Table of Contents The Industry Trends Report is a quarterly snapshot
of the auto physical damage collision and casualty
industries. Just inside—the economy, industry
3 Quarterly Feature: The Trend in Estimate Severity is highlights, plus illuminating statistics and measures,
and more. Stay informed on ongoing and emerging
Part Inflation and Part Parts. trends impacting the industry, and you, with the
Industry Trends Report!
6 The Economy & Short-Term Energy Outlook
8 Current Events in the Collision Industry Questions or comments about the Industry Trends
Report may be directed to:
15 Motor Vehicle Markets
New Vehicle Sales Greg Horn
Editor in Chief, Vice President of Industry Relations
Used Vehicle Sales
greg.horn@mitchell.com
17 Mitchell Collision Repair Industry Data
Average Appraisal Values For distribution and circulation questions, or requests
Collision Losses for back issues, please contact:
Facts At-A-Glance: Automobile Sales Regina Merkey
Comprehensive Losses Managing Editor, Sr. Marketing Communications
Third-Party Auto Property Damage Specialist
Supplements Distribution and Circulation
Parts Analysis (858) 368-7790
Paint & Materials e-mail: regina.merkey@mitchell.com
Labor Analysis
For data analytics, please contact:
Adjustments
Gail Sloan
23 Procedure Page Updates Vice President of Licensing and Corporate Accounts
24 Total Loss (858) 368-7869
e-mail: gail.sloan@mitchell.com
25 Canadian Collision Summary
Canada Appraisal Severity Additional Contributors:
Canada Parts Utilization Manheim analytics provided by Thomas C. Webb,
Vehicle Age and ACV’s Chief Economist at Manheim Auctions. Webb has been
associated with the used vehicle market for more than
30 Collision Casualty Statistics 26 years, including serving as Senior Manager at a
31 About Mitchell International, Inc. professional services firm’s global automotive practice,
News Releases Q2-2010 and Chief Economist for one of the industry’s largest
Mitchell Brand Advertising at Work national trade organizations.
The Industry Trends Report is published by Mitchell
International, Inc.
The information contained in this publication was
obtained from sources deemed reliable. However,
Mitchell International, Inc. cannot guarantee the
Mitchell International, Inc., founded in 1946 and headquartered in San Diego, California, is a leading accuracy or completeness of the information provided.
provider of information and workflow solutions to the Property & Casualty Claims and Automotive Collision Repair
industries. The company’s comprehensive solution portfolio streamlines the entire auto physical damage, bodily
injury and workers’ compensation claims processes. Mitchell enables millions of electronic transactions between
more than 30,000 business partners each month to enhance partner productivity, profitability, and customer
satisfaction. For more information on Mitchell International, please visit our website at www.mitchell.com. Mitchell Industry Trends Report 2

3. Quarterly Feature
The Trend in Estimate Severity
is Part Inflation and Part Parts.
Study Reaffirms Unexpected:
When OEM part prices increase, estimate severity decreases.
By GReG HoRN
Vice President of Industry Relations, Mitchell International
About the author…
In last year’s Q4-2009 issue of the Industry Trends Report, we explored different slices Greg Horn
of parts pricing data by vehicle origin and part type via a new mechanism—the Mitchell Vice President of Industry Relations,
Collision Parts Price Index (MCPPI). As you may recall, we created the MCPPI using the Mitchell International
Consumer Price Index (CPI) as our model since the CPI is a widely recognized gauge used Greg Horn joined Mitchell International
by many consumers to monitor the general rate of inflation. It is one of the most closely in September of 2006 as Vice President
watched economic indicators because it tracks the rate of inflation for a wide sampling of Industry Relations. In this role, Greg
of goods we routinely buy like food and clothing and services we regularly use such as assists the Mitchell sales force in providing
transportation and medical care. custom tailored business solutions to
the Property and Casualty Claims and
Just in the same way the CPI measures a vast “basket” of goods and compares the prices Automotive Collision Repair industries.
month to month, our collision parts basket measures the average collision parts inflationary
He provides guidance to Mitchell’s Product
trends. This array ranges from the inexpensive to pricier items and represents the top 20 Management and Business Analytics
most replaced collision parts for categories including hoods, fenders, headlamps, turn teams, playing an important role in shaping
signals, and side marker lamps. Mitchell’s solution portfolio to ensure that
it meets the evolving needs of current
How did we get everything into our basket? We pulled data from 2003 through the first
and future clients. Greg also presents
half of 2010 and used the results to create weighted average prices for these parts in
Mitchell’s Industry Trends Updates at
aggregate, setting the base year conferences across the country.
at 2003 and equal to 100. Data for Just in the same way Prior to joining Mitchell, Greg served
all OEM part types reflects retail
prices, and in the case of LKQ/used
the CPI measures a vast as Vice President of Material Damage
parts, markups are included in the “basket” of goods and Claims at GMAC Insurance, where he
was responsible for all aspects of the
pricing. This technique allows us to
compare inflationary trends by part
compares the prices month physical damage claims process and
the implementation of a unique vehicle
type. to month, our collision replacement program along with serving
By once again looking at the top parts basket also measures on the GM Safety Committee. Prior
to GMAC, Greg served as Director of
20 part types replaced—as we did the average collision parts Material Damage Processes for National
last year—we are able to not only
reaffirm the relationship between
inflationary trends. Grange Mutual in Keene, NH.
parts prices and inflation, we can
also get a clear picture of how the recession continues to affect alternate part selection
behavior. Parts repair also needs to be included in the basket, so to assess how a tough
economy is affecting parts repair, (a less expensive alternative for insurers and a larger
margin operation for shops) we revisited the notion of “substitution”—selecting to repair a
part rather than replace it.
Chart 1 on the next page shows some rather positive findings, indicating that the overall
inflation rate for the first half of 2010 is a modest 1.21 compared to the steady increase
from 2005-2009.
Continued…
Mitchell Industry Trends Report 3

4. Quarterly Feature: Revisiting the Mitchell Collision Parts Price Index (con’t.)
Chart 1
MCPPI by Year (all part types)
125
120 118.71
117.50
115 114.46
111.92
110 107.78
105 104.64
100.00 100.84
100
95
90
2003 2004 2005 2006 2007 2008 2009 1H10
Breaking out the MCPPI by vehicle country of origin in Chart 2 below shows us that
the value of European cars has increased by 5.20 points respectively from the previous
year—a dramatic increase compared to Domestic and Asian parts indices, which each
increased less than one point. If you look at the 2008-1H10 time span, you might suspect
that exchange rates are responsible for some of this hike, but the dollar has an almost
direct inverse relationship to the yen against the euro exchange rate, so the Asian parts
manufacturers barely registered an increase. The most likely cause is pricing actions. Use
of new OEM parts is much higher for European vehicles than it is for Asian, so any pricing
action taken by the European OEM’s would have a greater effect on the market basket of
defined parts in the MCPPI.
Chart 2
MCPPI by Vehicle Origin
137.43
135
130
125
120 120.73
115
112.78
110
asian
105
european
100.00
100
domestic
95
90
2003 2004 2005 2006 2007 2008 2009 1H10
When we take it to a more granular level and split the data out by part type in Chart 3 on
the next page, we see a continuation of the trend first noticed when we initially created the
MCPPI. The LKQ/used parts price index has actually decreased and has continued to do
so in the 2009-2010 time span, with the aftermarket price index continuing to increase at
a rapid rate. However, the increase of market basket prices for new OEM parts slowed in
2009-2010 from 2008-2009’s pace, increasing only 3.02 points.
Mitchell Industry Trends Report 4

5. Quarterly Feature: Revisiting the Mitchell Collision Parts Price Index (con’t.)
Chart 3
MCPPI by Part Type
135
132.83
130
128.06
125 126.39
oem
120
aftermarket
115
110 lkq
105 remanufactured
100.00
100
95
94.29
90
2003 2004 2005 2006 2007 2008 2009 1H10
NEW!
If we leverage the data further, there are also a few more conclusions that we can draw
from the newest look at the MCPPI in terms of LKQ/used parts. For one, the increasing
Industry
number of overseas buyers of salvage vehicles has not restricted the use of salvage parts,
nor has it caused the price of those salvage parts to increase as evidenced by Chart 3 (see
page 21 for the latest US parts trends data). Secondly, LKQ/used parts index performance
has softened the overall inflation rate of all parts, keeping the index for 2010 at 94.29 when
the most used part type, new OEM parts, came in at 126.39. Trends
With parts representing approximately 42 percent of the average repairable estimate
dollars, you better believe they have a significant influence on the overall cost of a collision
repair estimate. If you take the time to understand parts use and how inflation affects this
Live
rate, you will also understand where estimate severity is trending and why—another critical Visit www.mitchell.com
element that impacts your business.
to sign up for these free
educational webinars.
YOUR KEY TAKEAWAY: If you The subjects range from
take the time to understand parts roundtable discussions
use and how inflation affects this with industry experts to live
rate, you will also understand presentations of the studies
where estimate severity is trending presented in our Industry
and why—another critical element Trends Report.
that impacts your business.
Mitchell Industry Trends Report 5

6. The Economy & Short-Term Energy Outlook
The Economy
ACCoRDING To A STATeMeNT ReLeASeD oN oCToBeR 12, 2010, THe FeDeRAL
oPeN MARKeT CoMMITTee decided to maintain the target range for the federal funds
rate at 0 to 1/4 percent, anticipating that economic conditions, including low rates of
resource utilization, subdued inflation trends, and stable inflation expectations, are likely to
warrant exceptionally low levels for the federal funds rate for an extended period.
The labor market situation continues to improve only slowly. The unemployment rate ticked
up in August and remained close to the level that has prevailed since the beginning of this
year. Initial claims for unemployment insurance remain at an elevated level. In addition,
other indicators of labor demand, such as measures of hiring and job vacancies, have not
improved.
Industrial production increased solidly in July and then rose more moderately in August.
Manufacturing production was boosted in July by a pickup in motor vehicle assemblies as
automakers replenished lean stocks at dealers. However, the production of motor vehicles
was pared back in August. More broadly, the output of high-technology items and other
business equipment expanded at a solid pace in July and August.
Real personal consumption expenditures rose modestly in July, similar to the average
increase over the preceding two months. Data for retail sales and the sales of light motor
vehicles pointed to a moderate gain in real consumer spending in August. Real disposable
personal income declined a bit in July after increasing at a solid pace in the second quarter
of this year. The personal saving rate edged down in July but remained near the high level
registered in the second quarter. Indicators of household net worth are mixed; home prices
moved down in July, while equity prices inched up. After falling back in July, consumer
confidence remained downbeat in August and early September, with households more
pessimistic about the outlook for their personal financial situations and general economic
conditions.
Housing activity, which had been supported earlier in the year by the availability of
homebuyer tax credits, softened further in July. Sales of new single-family homes remain
at a depressed level. Sales of existing homes fell substantially in July, and the index of
pending home sales suggests that sales were muted in August. Starts of new single-family
houses in July and August were below the low level seen in June, and the number of new
permits issued in August appeared to signal little improvement in new homebuilding. House
prices declined modestly in July after changing little, on net, in recent months.
Inflation is projected to remain subdued, with headline and core inflation little changed
from previous expectations. The current and projected wide margins of economic slack are
expected to contribute to a small slowing in core inflation in 2011, which is anticipated to be
tempered by stable inflation expectations. Inflation is projected to change little in 2012, as
considerable economic slack is expected to remain even as economic activity is anticipated
to strengthen.
The U.S. international trade deficit narrowed in July after widening in June. The rise in
exports in July more than offset their decline in June, as overseas sales of capital goods
rose sharply. Most other major categories of exports were little changed in July, although
exports of automotive products posted their first decline since May 2009. The narrowing
of the trade deficit in July also reflected a broad-based decline in imports following their
large increase in June. Imports of consumer goods fell substantially in July, while imports of
industrial supplies, capital goods, and automotive products also moved down. In contrast,
imports of petroleum products remained about flat in July.
Information on the economy and short-term energy outlook was obtained from the US Federal Reserve Board,
Federal Open Market Committee (FOMC) and the US Department of Energy, Energy Information Administration
(EIA). For more information, or to view original source materials, visit: www.federalreserve.gov/FoMC or
www.eia.doe.gov Mitchell Industry Trends Report 6

7. The Economy & Short-Term Energy Outlook (con't.)
Increases in foreign economic activity appear robust, on average, for the second quarter
of 2010. In particular, gross domestic product (GDP) grew strongly in the emerging market
economies, even though gains in China apparently moderated. Among the advanced
foreign economies, Europe posted a notable rise in economic activity in the second
quarter; rapid expansion in Germany more than offset weaker outcomes in other euro-
area economies, particularly those experiencing financial stress related to concerns about
their fiscal situations and potential vulnerabilities in their banking sectors. In Canada and
Japan, the rise in real GDP slowed noticeably in the second quarter. Recent indicators of
foreign economic activity for the third quarter, including data on exports, production, and
purchasing managers indexes, generally pointed to a slowing in the pace of expansion
in economic activity abroad. Headline inflation rates in foreign economies generally were
restrained in the second quarter by a deceleration in food and energy prices, but prices
appeared to be rising a bit more rapidly of late.
Overall, projections for the increase in real economic activity over the second half of 2010
are expected to be lower than previously anticipated. The forecast for growth next year
is also slightly lower than initially projected, although a moderate strengthening of the
expansion in 2011, as well as a further pickup in economic growth in 2012, is expected.
Economic data suggests that the underlying level of demand is weaker than previously
projected. Moreover, the outlook for foreign economic activity also appears a bit weaker
than originally anticipated. In the medium term, the recovery in economic activity is
expected to receive support from accommodative monetary policy, further improvements in
financial conditions, and greater household and business confidence. The increase in real
GDP is projected to be sufficient to slowly reduce economic slack, although resource slack
is anticipated to still remain elevated at the end of 2012.
Short-Term Energy Outlook
The U.S Energy Information Administration (EIA) projects average household expenditures
for space-heating fuels will total $986 this winter (October 1 to March 31), an increase
of $24, or 2.5 percent, from last winter. The Administration is also projecting higher
expenditures in all fuels except electricity, where expenditures are expected to decline
by 2 percent. This forecast reflects moderately higher prices for all the fuels, although
slightly milder weather than last winter for much of the Nation should contribute to lower
consumption in many areas.
EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $80
per barrel this winter, a $2.50-per-barrel increase over last winter. The forecast for average
WTI prices rises gradually to $85 per barrel by the fourth quarter of 2011 as U.S. and
global economic conditions improve. EIA’s forecast assumes U.S. gross domestic product
(GDP) grows by 2.6 percent in 2010 and 2.1 percent in 2011, while world oil-consumption-
weighted GDP grows by 3.8 percent and 3.3 percent, respectively, in 2010 and 2011.
Estimated U.S. carbon dioxide (CO2) emissions from fossil fuels, which declined by 7.0
percent in 2009, are expected to increase by 3.2 percent and 1.6 percent in 2010 and 2011,
respectively, as economic growth spurs higher energy consumption.
Overall, the economic outlook has softened somewhat, and the risks to the outlook have
shifted to the downside. Economic expansion is likely to be strong enough to continue
raising resource utilization, albeit more slowly than previously anticipated. Inflation is likely
to stabilize near recent low readings in coming quarters and then gradually rise toward
more desirable levels.
Information on the economy and short-term energy outlook was obtained from the US Federal Reserve Board,
Federal Open Market Committee (FOMC) and the US Department of Energy, Energy Information Administration
(EIA). For more information, or to view original source materials, visit: www.federalreserve.gov/FoMC or
www.eia.doe.gov Mitchell Industry Trends Report 7

8. Current Events in the Collision Industry
Small Business optimism Index Remains at Recessionary Level
Excerpted From: CollisionWeek—October 2010
The National Federation of Independent Business Index of Small Business Optimism
gained 0.2 points in September, rising to 89.0. The Index has been below 93 every month
since January 2008 (32 months), and below 90 for 26 of those months, all readings typical
of a weak or recession-mired economy.
“The downturn may be officially over, but small business owners have for the most part
seen no evidence of it,” said NFIB Chief Economist Bill Dunkelberg.
Average employment growth per firm was negative 0.26, and has been negative in all but
two months since January 2008. Eleven percent (seasonally adjusted) reported unfilled job AN eDIToR’S NoTe…
openings, unchanged from August and historically very weak. Over the next three months, These are signs that the recovery
8 percent plan to increase employment (unchanged), and 16 percent plan to reduce their may be stalling for the collision
workforce (up three points), yielding a seasonally adjusted net-negative 3 percent of business, and business owners need
owners planning to create new jobs, down four points from August, an unexpected reversal to prepare for such a stall.
in job creation prospects.
The frequency of reported capital outlays over the past six months rose one point to 45
percent of all firms, a point above the 35-year record low.
The net percent of all owners (seasonally adjusted) reporting higher nominal sales in
the past three months lost a point, falling to a net-negative 17 percent, 17 points better
than June 2009 (the recession bottom) but still indicative of very weak customer activity.
Unadjusted, 23 percent of all owners reported higher sales (last three months compared to
prior three months, down two points) while 34 percent reported lower sales (up one point).
Widespread price cutting continued to contribute to reports of lower nominal sales.
The net percent of owners expecting higher real sales lost three points from August,
falling to a net-negative 3 percent of all owners (seasonally adjusted)—a dismal outlook.
Not seasonally adjusted, 26 percent expect improvement over the next three months, 37
percent expect declines.
earnings
A net-negative 33 percent of owners reported positive profit trends, deteriorated three
points in September and 29 points worse than the best expansion reading reached in 2005.
The persistence of this imbalance is bad news for the small business community. Profits
are important for the support of capital spending and expansion. Not seasonally adjusted,
16 percent reported profits higher (down two points), but 45 percent reported profits falling,
a three point increase.
Owners continued hold the line on compensation, with 7 percent reporting reduced worker
compensation and 10 percent reporting gains. Seasonally adjusted, a net 3 percent
reported raising worker compensation, only five points better than February’s record low
reading of negative 2 percent.
Credit
Overall, 91 percent of small business owners reported that all their credit needs were
met or that they were not interested in borrowing. Nine percent reported credit needs not
satisfied, and a record 53 percent said they did not want a loan.
“Members of Congress fled with no action on important issues such as extending current
tax rates, leaving the cloud of uncertainty larger and darker,” said Dunkelberg. “In response,
consumer sentiment fell and owner optimism remained anchored solidly in recession
territory. Owners won’t make spending commitments when sales prospects remain weak
and decisions such as tax rates and labor costs remain so uncertain.”
Mitchell Industry Trends Report 8

9. Current Events in the Collision Industry (con't.)
Defining Like Kind and Quality
Excerpted From: CollisionWeek—October 2010
What does it mean when an aftermarket part is said to be ‘equivalent’ to OEM?
The July Collision Industry Conference presentations on various aftermarket parts
heightened the call to mandate that aftermarket structural parts manufacturers ensure that
they produce safe, quality parts to a standard specification that includes proper material,
dimensions and form process. A case was presented at that meeting indicating that the use
of material, form and thickness different than the OEM original part could lead to increased
damageability or affect the vehicle’s restraint systems. The conclusion to be drawn was
that aftermarket structural parts must be manufactured to be of like kind and quality, or
“equivalent,” to OEM in order to perform like OEM.
Equivalent to OEM, or like kind quality with respect to replacement parts, is specified in
regulations in 20 states, and in defining the term like kind quality, the OEM representative
at CIC stated that in order to qualify as like kind and quality, a replacement aftermarket part
must be “equivalent” to the OEM branded part. But what does equivalent mean? AN eDIToR’S NoTe…
“Which parts are being referenced, the original production parts or OEM service parts? The term equivalent in the case of
These questions are raised by Diamond Standard after a study of four OE manufacturers’ manufacturing variances means
data for front bumper weight, thickness, tensile and yield strength properties to gauge their that the equivalent part should fall
interpretation of equivalency in creating a certifiable alternative part,” said Mike O’Neal, in the same engineering ranges as
President of Diamond Standard. those established by the original
equipment parts. The issue is that
Aftermarket parts manufacturer Diamond Standard has published the results of a series of
some of today’s aftermarket parts
tests on OEM parts conducted to measure their characteristics including dimensions and
do not fall in those ranges and then
material strength, in order to illustrate the variances that exist in OEM factory parts.
cannot truly be called “like kind and
quality.”
Weight (lb.) Current
High Low Average Service Part
37.78 35.35 36.56 37.75
Material Thickness Current
High Low Average Service Part
0.0790 0.0714 0.0752 0.0761
yield (psi) Current
High Low Average Service Part
44800 34700 39750 40400
Tensile Current
High Low Average Service Part
57000 45400 51200 52300
In this example, the weight of the OEM part falls within a range that can vary by plus or
minus 3.3 percent. The material thickness varies by five percent, and the tensile strength
shows a variance of plus or minus 11 percent from average.
The examination of OEM parts shows that there is no single measurement of strength or
dimension but there is a definite range in the parts that must be viewed as equivalent or
acceptable and would not affect part performance, restraint systems and vehicle safety.
Diamond Standard explains that the ranges are the realities of the initial production run on
Mitchell Industry Trends Report 9

10. Current Events in the Collision Industry (con't.)
the part moving to the shorter runs of service parts or even the use of different tier 2 or
3 suppliers to manufacture the parts. Raw material spot buying, the state of the economy
and volatility of the steel market can also contribute to normal and acceptable variances
in material.
Equivalency is shown by this study to have a definite range. According to Diamond
Standard, these results are not meant to imply that OEM manufacturers or their suppliers
are in any way not diligent in their pursuit of safe, reliable and consistent quality replacement
parts. Nor does it attempt to defend those aftermarket manufacturers who are knowingly
not diligent in replicating the quality or safety of structural replacement parts.
“The charge for Diamond Standard is to follow the criteria built within the original part and
fall within the ‘acceptable’ mean values of the production and service parts,” said O’Neal.
Achieving that mark of quality through vigorous third party testing provides the industry a
true alternative to the part it replaces. “This is our assurance to the industry that Diamond
Standard parts are safe and reliable alternatives to use,” said O’Neal.
Download charts that show a sampling of the results obtained by Diamond Standard’s
examination of OEM parts across multiple lot numbers, years and manufacturers from
production parts to current service parts.
Deer-Vehicle Collision Frequency Up 21 Percent in Five years
Excerpted From: CollisionWeek—October 2010
While the number of miles driven by U.S. motorists over the past five years has increased
just two percent, the number of deer-vehicle collisions in this country during that time has
grown by ten times that amount.
Using its claims data, State Farm, the nation’s leading auto insurer estimates 2.3 million
collisions between deer and vehicles occurred in the U.S. during the two-year period
between July 1, 2008 and June 30, 2010. That’s 21.1 percent more than five years earlier.
The average property damage cost of these incidents was $3,103, up 1.7 percent from a
year ago.
For the fourth year in a row, West Virginia tops the list of those states where a driver is most
likely to collide with a deer. Using its claims data in conjunction with state licensed driver
counts from the Federal Highway Administration, State Farm calculates the chances of a AN eDIToR’S NoTe…
West Virginia driver striking a deer over the next 12 months at 1 in 42.
Deer hits drive average severity up
Iowa is second on the list. The likelihood of a licensed driver in Iowa striking a deer within for comprehensive claims around
the next year is 1 in 67. Michigan (1 in 70) is third. Fourth and fifth on the list are South this time of year, so if you find your
Dakota (1 in 76) and Montana (1 in 82). comprehensive severity has spiked,
Pennsylvania is sixth, followed by North Dakota and Wisconsin. Arkansas and Minnesota do a little research—this may be why.
round out the top 10.
The state in which deer-vehicle collisions are least likely is still Hawaii (1 in 13,011). The
odds of a Hawaiian driver hitting a deer between now and 12 months from now are roughly
equivalent to the odds of finding a pearl in an oyster shell.
U.S. map showing likelihood of deer-vehicle collision by state
Chart listing likelihood of vehicle-deer collision by state
Mitchell Industry Trends Report 10

11. Current Events in the Collision Industry (con't.)
BRIC countries are developing into economic powerhouses of automobile
production
By: Greg Horn
Excerpted From: ABRN—August 2010
I have talked a lot about the looming arrival of Chinese cars in the United States, but there
are other countries that could be importing cars here—countries that are developing quickly
into economic powerhouses of automobile production.
As a group, the term BRIC refers to the related economies of Brazil, Russia, India and
China—an acronym coined by Jim O’Neill of Goldman Sachs back in 2001. Goldman
Sachs argues that these countries are developing so rapidly that by 2050 their combined
economies could eclipse the world’s current richest countries. Together they account for
more than a quarter of the world’s land area and more than 40 percent of its population.
China already is the world’s largest automobile producer, with India hot on its heels. In
the U.S., we haven’t seen much from Brazil and Russia. The Volkswagen Fox was the last
Brazilian-made car on U.S. roads, imported from 1987 to 1993 as an inexpensive option
amid rising costs of Volkswagen’s other offerings.
Outside of that budget-conscious car, Brazil is home to production facilities for some
of the world’s largest automakers. General Motors, Ford, Fiat and Nissan/Renault all
have significant plants in Brazil – making it the world’s sixth largest vehicle producer. A
combination of tax breaks, easier loan terms, and low interest rates have jump-started
domestic demand for Brazilian cars this year. Brazil also can play the fuel card. Since most
Brazilian vehicles run on “flex fuel,” an ethanol or sugar cane derived alcohol fuel called
alcool, U.S. automakers could look here for help in meeting strict CAFE standards.
Thousands of miles away, Russia, even with its existing auto manufacturing infrastructure in
a shambles that has not recovered since the break up of the Soviet Union, is a contender.
After the dissolution of the Soviet Union, Russia was stuck producing antiquated poorly
made cars like Lada, which bravely exported its cars to Europe and Canada where owners
inevitably waited to see if the body would corrode before the drive train blew up. Today, a
trimmed down Russian car industry is ripe for expansion, making strides by partnering with
European and Asian manufacturers and banking on the Russian government’s possible
$21-billion investment.
India and China will be neck and neck in the race to the U.S. finish line. Despite several false
starts, India’s Mahindra is primed to bring pick ups to 400 U.S. dealers. We’ll see whether
our market embraces a $20,000 mid-size turbo diesel pick up. China’s edge is in entry level
economy cars, a market segment that launched most of the imported car makers stake in
the U.S. from Volkswagen to Kia. China’s major stumbling block is its inability to pass safety
crash tests, but with Geely buying Volvo, that problem may be quickly resolved. Brazil is
next in line, hard at work leveraging world partnerships with existing major manufacturers
and low assembly labor costs to produce competitively priced entry level B segments.
So what should collision repairers expect from the BRIC? Entry level vehicles will hit the
West Coast and Southwest first. Depending on their dealer network, the lack of a parts
Mitchell Industry Trends Report 11

12. Current Events in the Collision Industry (con't.)
network infrastructure could cause a collision part shortage. History has taught us that
parts stock and delivery are keys to a successful vehicle brand entry. Just ask former
Sterling and Daihatsu dealers.
Daihatsu has a great worldwide reputation as a premium Japanese car, but they are
a forgotten footnote in the U.S. because of parts availability issues. Sterling, a North
American division of the U.K.’s Rover in collaboration with Honda in the late 1980s and
early 1990s, also met its demise due to parts issues. Dealers I spoke with at the time said
anything Honda assembled was reliable while anything that Rover produced broke, with no
replacement parts available.
A lack of reputation will quickly depreciate these new entrants, much like the original
Hyundai Excel or Kia Sephia with their dismal resale values. These newbies may be
nothing but headaches for repairers because they will be more likely to total, and if they are
repairable, you may tie up a bay waiting on parts. Remember this when one of those new
brands asks if you want to become their collision repair partner.
Making lean work in the real world
Adopting lean requires more than just process improvements
By: Brian Albright
Excerpted From: ABRN—October 2010
Deploying lean management principles in the autobody repair industry has been a hot topic
for years, but some owners struggle with successfully adopting these techniques. That’s
because many consultants and managers fail to address the cultural aspects of adopting
this approach, says Joe Murli, principal at consulting firm Murli & Associates.
Murli was originally exposed to lean principles when he was working in the aerospace
WASTE
manufacturing industry.
“I was wrestling with the question of, how do we keep making these technical improvements,
but we come back a year later and things have degenerated, or there was some kind of
backlash to what we were trying to do?” Murli says. “Our Japanese coaches, while they AN eDIToR’S NoTe…
were exceptional teachers on the technical aspects of how you flow work, they were really
I truly believe that adopting lean
ill-equipped to talk about the cultural aspects and a human resources strategy.”
practices will make the difference
One big stumbling block in the collision repair industry is the collaborative nature of lean. between thriving or just surviving in
Autobody techs are highly individualistic. “This is very much a ‘lone ranger’ type of industry,” the next five years.
Murli says. “You have to get the body techs to collaborate with the front office and the
mechanical guys and the painters. How do you get the whole value stream really thinking
together and flowing the vehicle through the entire system so you have a satisfied customer
on the other end?”
Murli also says that most people tend to minimize problems in their daily work interactions—
the opposite of what lean requires, which is a frequent discussion about problems and how
to solve them.
“There’s also an issue with leadership modeling,” Murli says. “In autobody shops, the
mangers who get promoted have worked their way up through the organization by being
seen as a person who can fix problems. In lean, the leadership model is not focused
on that, but on how well managers help build the problem-solving muscle of the whole
organization. They have to train the employees how to think critically.”
There are misalignments between the lean model and how the typical body shop operates
throughout the repair process. Estimates are written before vehicles are torn down, and
parts are ordered after repairs have already begun.
“You keep going down the line, and you find that everybody is incentivized to do what’s
best for them individually, but there’s nobody really incentivized to take that customer’s car
Mitchell Industry Trends Report 12

13. Current Events in the Collision Industry (con't.)
all the way through the repair process and make it whole, and get them back in their own
car again,” Murli says.
To re-align with the lean model, Murli says shops should establish relationships with
insurance companies based on credibility. “The insurance carrier needs to know that when
the car comes out, the shop will have provided a high-quality repair in the shortest cycle
time possible,” he says.
Shops also have to align incentives with their parts suppliers so that repairs don’t begin
(and parts don’t arrive) until every part needed is available.
Pay structures also have to be revisited. “You really have to get out of the percentage of pay
method of paying the technicians,” Murli says. “That’s a tough one with lot of cultural and
historical barriers. One way to go is to establish an hourly pay rate with team incentives,
where they get a basic wage for showing up at work, and the entire team gets an incentive
based on how well cars are flowing through the process.”
Blueprinting (or damage analysis) is another important step, but Murli emphasizes that
other improvements also have to happen, like establishing community tools, providing
visual feedback on performance and other tactics.
“You can’t let the major breakthrough of damage analysis overshadow other improvements,”
Murli says. “You can’t forget that daily reflection process. Every day the team comes together
and spends 15 minutes talking about how you did and where there are opportunities or
improvement. Those opportunities are small ones, but there are many of them. That’s
what distinguishes mature lean organizations from those that have just put in some basic
process improvements.”
New steels, anti-collision systems will impact reparability and total losses
By: Brian Albright
Excerpted From: ABRN—October 2010
Changes in vehicle designs, structural materials and onboard technology will have a
significant impact on the way collision shops operate. That’s why Jason Bartanen, technical
director for I-CAR, and Bob Keith, co-owner of Silver Hammer Body Co. in Omaha and
senior director of education and training at CARSTAR, emphasized the need for
ongoing training in their Tuesday session, “Vehicle Technology Influences on
Collision Repair.”
According to the presenters, repairers can expect to see more high-
strength and ultra-high-strength steels, as well as aluminum, on higher
production vehicle models.
New metals have already had an impact on collision repair, since most OEMs
have introduced advanced steels into their vehicle frames. Repairers often don’t
know these metals are present until they encounter them during a repair.
AN eDIToR’S NoTe…
“You don’t know it’s there, and then you don’t know what to do with it once you’ve got it
in front of you,” Keith says. “You can’t cut it or drill it, and heat can affect the strength of This article mirrors and reaffirms
the steel. Many of these steels have no potential for reparability, and repairers are still what we have been saying for
struggling to find out where it’s located.” awhile…advanced steels will
continue to be a challenge for this
Since OEMs recommend that repairs not be made on many of these new metals, that will industry—increasing costs and
mean more replacement of structural components. “If you look at something like the new potential total losses.
Ford Fiesta, I’m not sure how much that car is valued at, but if you have to replace structural
components to make it drivable we’re going to look at more total losses,” Keith says.
While OEs have made information on the placement of these metals available (in some
cases, for a price) and the database vendors are doing a better job of providing information
Mitchell Industry Trends Report 13

14. Current Events in the Collision Industry (con't.)
during the appraisal, Keith says it is the shop’s responsibility to stay on top of these design
changes.
“It’s up to use from the repairer side to look at these vehicles and create a repair plan,” he
says. “How are we going to repair this thing correctly based on the OE specifications and
procedures? You have to do that research before you ever start the job.”
Crash avoidance technologies, like cameras and sensors mounted in the front and rear
ends of the car, have pushed up repair prices and total losses, too.
“You get into the job, and you start encountering these cameras and sensors,” Keith says.
“There are high-end headlight systems where if you unplug them, they have to go back to
the OE to have the codes cleared.”
That also means there may be fewer collisions, which does not bode well for the industry.
“You have to think about what that will do to us 10 or 20 years down the road,” Keith says.
Some changes in vehicle design that are meant to improve survival rates in the event of
a collision also have created challenges for repairers. “Honda has come up with a design
that protects the occupants, but it’s doing some strange things as far as creating secondary
damage elsewhere in the vehicle,” Keith says. “Some of these cars are designed to drive
the damage completely through the vehicle.”
That’s why education is important; repairers have to be on top of new technologies, and be
alert for unexpected secondary damage.
And there are even more changes coming. BMW hopes to develop a vehicle built with
carbon fiber, for instance. Shops will need to make an investment in new tooling, scanning
equipment and training to continue to provide reliable repairs.
“We need to have our folks out there consistently being trained on these new technologies,”
Keith says. “Because that’s going to be a key element, not only to having the right tooling
and equipment, but having that knowledge base to know where we are going with this stuff.
The slightest misstep might affect airbag timing and who knows what else, the way some
of these vehicles are designed.”
Mitchell Industry Trends Report 14

15. Motor Vehicle Markets
New Vehicle Sales
According to Ward’s Auto, total new light-vehicle sales showed a strong increase this September at 28.5%
more than September 2009. Year-to-date sales are up over 10.3% from 2009, and that is remarkable since
2009 sales take Cash For Clunkers into account
Ward’s U.S. Light Vehicle Sales Summary
January-September 2010
Number of Vehicles
0 2m 4m 6m 8m
domestic cars 2,917,681 8.7
import cars 1,376,117 -3.4
total cars 4,293,798 4.5
Vol % Change from 2009 Sales
domestic light trucks 3,647,401 21.2
import light trucks 657,301 -3.1
total light trucks 4,304,702 16.7
domestic light Vehicles 6,565,082 15.3
import light Vehicles 2,033,418 -3.3
total light Vehicles 8,598,500 10.3
Ward’s U.S. Light Vehicle Sales by Company
January-September 2010
Number of Vehicles
0 2m 4m 6m 8m
Chrysler 816,824 14.7
Ford 1,419,260 21.0
GM 1,634,884 6.8
International (Navistar) 1,118 265.4
north america total 3,872,086 13.4
Geely (Volvo) 41,118 -12.0
Honda 912,436 3.2
Vol % Change from 2009 Sales
Hyundai Group 678,072 16.8
Isuzu 1,351 7.5
Mazda 174,770 9.1
Mitsubishi 41,392 -3.4
Nissan 673,701 16.1
Subaru 193,614 22.2
Suzuki 16,972 -49.4
Tata 32,037 18.4
Toyota 1,311,316 1.1
asia total 4,076,779 7.0
BMW 192,052 7.2
Daimler 170,381 15.1
Porsche 17,689 23.6
Saab Spyker 3,233 -53.3
Volkswagen 266,280 21.4
europe total 649,635 14.4
total light Vehicles 8,598,500 10.3
Source is country of manufacture. Domestics are from U.S., Canada, Mexico. Imports are from overseas.
Light vehicles are cars and light trucks (GVW Classes 1-3, under 14,001 lbs.). DSR is daily sales rate.
Source: Ward’s AutoInfoBank © Copyright 2010, Ward’s Automotive Group, a division of Penton Media Inc. Redistribution prohibited. Mitchell Industry Trends Report 15

16. Motor Vehicle Markets (con't.)
Ward’s 10 Best Selling Cars Trucks/Vans/SUVs
Cars and Trucks
1. Toyota Camry 250,830 1. Ford F Series 385,879
January-September 2010
2. Honda Accord 214,827 1. Chevrolet Silverado 267,715
3. Toyota Corolla/Matrix 209,186 1. Honda CR-V 144,286
Note: Table combines imports and domestics.
Source: Ward’s AutoInfoBank.
4. Honda Civic 198,272 1. Ford Escape 142,820
5. Nissan Altima 168,897 1. Dodge Ram Pickup 140,889
© Copyright 2010, Ward’s Automotive Group, 6. Chevrolet Malibu 163,246 1. Toyota RAV4 126,391
a division of Penton Media Inc.
7. Ford Fusion 161,581 1. Chevrolet Equinox 99,055
Redistribution prohibited.
8. Hyundai Sonata 149,123 1. GMC Sierra 90,235
9. Ford Focus 134,253 1. Chrysler Town & Country 87,493
10. Chevrolet Impala 133,585 1. Ford Edge 87,135
Used Vehicle Sales – Current Monthly Index Manheim Used Vehicle Value Index
September 2009 – September 2010
By ToM WeBB
123
Chief Economist – Manheim
121
Manheim Index Declines in August
119
Wholesale used vehicle prices (on a mix, mileage, and seasonally
adjusted basis) slipped marginally in August. The Manheim Used 117
Vehicle Value Index reading was 118.8, which represented a 0.1% 115
decline from July, but a 2.1% increase from a year ago.
113
Given the bleak economic backdrop of the past several months, it is
noteworthy that retail used vehicle sales volumes have held up and 111
that dealer margins and inventory turns remain supportive to profits.
109
Although new vehicle sales remain in a stall, manufacturers and
dealers continue to practice inventory and pricing discipline. That will 107
serve them well when unit sales begin to recover over the next year.
105
103
101
99
97
Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept
09 09 09 09 10 10 10 10 10 10 10 10 10
Source: Manheim Consulting
Mitchell Industry Trends Report 16

17. Mitchell Collision Repair Industry Data
The following information was assembled from industry-wide appraisal data uploaded from
participating insurance carriers, body shops, and independent appraisers, processed by Mitchell Product Solution:
Mitchell International and compiled through Mitchell’s AIM™ (Advanced Information
Management) system.
AIM
AIM™ features immediate online data access,
With the obvious exception of the Total Loss section, all data in this section, including ACV custom report construction, ad-hoc query
benchmarks, relate to repairable vehicle appraisals only. capabilities, weekly updates, and the ability to
accept and consolidate detailed appraisal data
Sections included in the Mitchell Collision Repair Industry Data: from all major estimating platforms. For more
information on AIM, visit Mitchell’s website at
• Average Appraisal Values • Collision Losses www.mitchell.com.
• Comprehensive Losses • Third-Party Auto Property Damage
• Supplements • Parts Analysis
• Paint & Materials • Labor Analysis
• Adjustments • Total Losses
Development explained
The following data points are dynamic and subject to change from on-going supplement
and total loss designation activities amending original appraisal values. Average appraisal
values submitted in June, for example, will likely increase by several dollars over the next
few months, then stabilize as all supplements are factored into the final value for the period.
Raw values are provided, and then adjusted based on the observed six-month change
behavior from prior data to produce a projected final or “developed” value. Adjusted values
may therefore be considered reliable approximations of the eventual, industry value for
any given datum. As supplement frequency and severity, as well as total loss designation
activities vary by carrier, we suggest that each company isolate their own development
factors to apply to their own unique data sets.
Average Appraisal Values
The initial average appraisal value, calculated by combining data from all first- and third-
party repairable vehicle appraisals uploaded through Mitchell systems in Q3-2010, was
$2,450—$43 less than the previous year’s Q3-2009 appraisal average of $2,493. Applying Mitchell Product Solution:
the prescribed development factor of 2.16% to these data produces an anticipated average
appraisal value of $2,503.* UltraMate
UltraMate is Mitchell’s advanced estimating
®
system, combining database accuracy,
Average Appraisal Values, ACVs and Age
All APD Line Coverages automated calculations, and repair
procedure pages to produce estimates that
$14,000 are comprehensive, verifiable, and accepted
throughout the collision industry. UltraMate
$12,736 $12,696
$12,000 $12,315 $12,335 is a central component of Mitchell’s all-in-
$11,630
$11,503 one estimating, imaging, and claims workflow
$10,000
management solution, UltraMate Premier
Suite. For more information on UltraMate
$8,000
and UltraMate Premier Suite, visit Mitchell’s
$6,000 website at www.mitchell.com.
$4,000
$2,531 $2,529 $2,493 $2,544
$2,000 $2,490 $2,450/
2,503
q1 2008 q3 2008 q1 2009 q3 2009 q1 2010 q3 2010
avg. unit age 6.00 6.20 6.28 6.53 6.72 6.83
appraisals acV’s
*NOTE: Values provided from Guidebook benchmark averages, furnished through Mitchell UltraMate®.
Mitchell Industry Trends Report 17

18. Mitchell Collision Repair Industry Data (con't.)
Collision Losses Hybrid:
Mitchell’s Q3-2010 data reflects an initial average gross Collision appraisal value of Facts At-A-Glance…
$2,748—$69 less than this same period last year. Applying the indicated development
• While the Chevy Volt has both an
factor of 2.4% suggests a final Q3-2010 average gross Collision appraisal value of $2,814.
electric power train and a gasoline
The average Actual Cash Value (ACV) of vehicles appraised for Collision losses during
engine, it is not a gas-electric hybrid
Q3-2010 was $13,417—up significantly from the same quarter in 2009, reflecting strong
in the traditional sense. The Volt is a
used car values.*
plug-in electric vehicle (EV) propelled
only by a powerful electric motor. The
Average Appraisal Values, ACVs and Age
small gasoline engine works strictly
Collision Coverage*
as a range-extending generator
$14,000 to recharge batteries and provide
$13,422 $13,417
$12,000
$13,017
$12,249
$13,021 current to the electric motor.
$12,193
$10,000
• In the Volt’s current configuration, a
full charge from household current
$8,000 will provide a maximum EV range
$6,000
of 40 miles. So, if your commute
is shorter than that, the gasoline
$4,000 engine may not need to run at all.
$2,906 $2,825 $2,902 $2,944 $2,748/
$2,000 $2,817
2,814 • The Chevy Volt has a 400-mile total
range after battery power is depleted.
q1 2008 q3 2008 q1 2009 q3 2009 q1 2010 q3 2010 The Volt should offer another 360
miles of range with the gasoline
avg. unit age 5.63 5.78 5.88 6.10 6.25 6.34 engine/generator providing the juice,
appraisals acV’s for a total of 400 miles.
• Nissan’s Leaf is unique in its
Comprehensive Losses
innovative use of multiple stacks of
In Q3-2010, the average initial appraisal value for Comprehensive coverage estimates laminated compact battery modules
processed through our servers was $2,505—compared to $2,521 in Q3-2009. Applying integrated beneath the floor. These
the prescribed development factor of 2.2% for this data set produces an adjusted value lithium-ion batteries can be readily
of $2,561—a $40 increase from this same period last year. Q3-2010’s average appraised configured in ways that accommodate
vehicle value (ACV) for comprehensive losses was $13,404—an increase of $1,562 over the needs of different vehicle
vehicles appraised during this same period in 2009.* platforms.
• Nissan says these batteries provide
Average Appraisal Values, ACVs and Age
Comprehensive Losses the Leaf a real-world 100 mile
driving range. More modules could
$14,000 conceivably provide that same kind of
$13,404
$13,164
$12,000 $12,386
$12,921 range in a larger sedan or crossover.
$11,791 $11,842
$10,000
• Southern California-based Coda
Automotive is also set to bring an all
$8,000 electric car to California in December
$6,000
2010. This vehicle also features a 100
mile range and is priced competitively
$4,000 to the Leaf.
$2,521 $2,357 $2,505/
$2,000 $2,241 $2,356 $2,349
2,561
q1 2008 q3 2008 q1 2009 q3 2009 q1 2010 q3 2010
avg. unit age 6.18 6.37 6.39 6.55 6.77 6.79
appraisals acV’s
*NOTE: Values provided from Guidebook benchmark averages, furnished through Mitchell UltraMate®.
Mitchell Industry Trends Report 18

19. Mitchell Collision Repair Industry Data (con't.)
Third-Party Property Damage
In Q3-2010, our initial average gross Third-party Property Damage appraisal was $2,185
compared to $2,203 in Q3-2009—reflecting an $18 initial decrease between these
respective periods. Adding the prescribed development factor of 1.64% for this coverage
type yields a Q3-2010 adjusted appraisal value of $2,221—an increase of $18 over
Q3-2009.*
Average Appraisal Values, ACVs and Age
Auto Physical Damage APD
$12,000
$12,047
$11,702 $11,700 $11,986
$11,052
$10,000 $10,863
$8,000
$6,000
$4,000
$2,000 $2,269 $2,229 $2,241 $2,203 $2,258 $2,185/
2,221
q1 2008 q3 2008 q1 2009 q3 2009 q1 2010 q3 2010
avg. unit age 6.24 6.39 6.55 6.79 7.05 7.09
appraisals acV’s
Supplements
Editors Note: As it generally takes at least three months following the original date of
appraisal to accumulate most supplements against an original estimate of repair, we report
(and recommend viewing supplement information) three months after-the-fact to obtain the
most accurate view of these data.
In Q3-2010, 25.37% of all original estimates prepared by Mitchell-equipped estimators
during that period were supplemented one or more times. In this same period, the pure
supplement frequency (supplements to estimates) was 47.95%—reflecting a 3.30 pt, or
7%, relative increase from that same period in 2009. The average combined supplement
variance for this quarter was $566.70—$71.39 lower than in Q3-2009.
Average Supplement Frequency and Severity
Date Q1/08 Q3/08 Q1/09 Q3/09 Q1/10 Q3/10 Pt/$ Change % Change
% Est. Supplement 35.17 32.84 34.71 32.25 35.06 25.37 -6.88 -21%
% Supplement 49.86 46.38 50.87 44.65 55.55 47.95 3.30 7%
Avg. Combined Supp. Variance $644.70 $648.41 $617.29 $638.09 $664.95 $566.70 -71.39 -11%
% Supplement $ 25.47 26.05 24.41 25.59 26.14 23.13 -2.46 -10%
*NOTE: Values provided from Guidebook benchmark averages, furnished through Mitchell UltraMate®.
Mitchell Industry Trends Report 19

20. Mitchell Collision Repair Industry Data (con't.)
Average Appraisal Make-up
This chart compares the average appraisal make-up as a percentage of dollars constructed
by Mitchell-equipped estimators. These data points reflect a slight decrease in the use of
parts, while the percentage of paint material and labor dollars used in the average appraisal
have increased between these respective periods.
% Average Appraisal Dollars by Type
Date Q1/08 Q3/08 Q1/09 Q3/09 Q1/109 Q3/10 Pt/$ Change % Change
% Average Part $ 45.00 42.62 44.32 41.93 44.38 41.72 -0.21 -1%
% Average Labor $ 44.08 46.10 44.34 46.62 44.08 47.69 1.07 2%
% Paint Material $ 9.63 10.24 10.13 10.50 10.40 10.74 0.24 2%
Parts Analysis
Editor’s Note: While there isn’t a perfect correlation between the types of parts specified Mitchell Product Solution:
by estimators and those actually used during the course of repairs, we feel that the Mitchell
following observations are directionally accurate for both the insurance and auto body Alternate
repair industries. This segment illuminates the percentage of dollars allocated to each Parts Program
unique part-type.
mitchell alternate parts program (mapp™)
As a general observation, recent data show that parts make up 41.34% of the average offers automated access to nearly 30,000,000
value per repairable vehicle appraisal—5.99 points less than the average allocation of Remanufactured, Aftermarket, and OEM
labor dollars. In addition, the overall trend continues to reflect a decrease in the use of Discount parts from over 2,000 suppliers,
OEM parts—due in part to several vehicle manufacturers increasing collision part prices. ensuring shops get the parts they need
from their preferred vendors. MAPP is fully
However, it appears that OEM parts use seems to be seasonally affected in the second integrated with UltraMate for total ease-of-use.
quarter of each year, which can likely be attributed to hail storms impacting overall OEM use. Designated company administrators are also
provided the MAPP Matrix Manager application
free of charge—allowing clients the ability
Parts Type Definitions to manage their MAPP matrices, run four
different matrix reports, add new suppliers/
• original equipment Manufacturer (oeM): Parts produced directly by the vehicle
parts, all from their local platform without the
manufacturer or its authorized supplier, and delivered through the manufacturer's need for Mitchell support/intervention.
designated and approved supply channels. This category covers all automotive parts,
including sheet metal and mechanical parts.
• Aftermarket: Parts produced and/or supplied by firms other than the Original Equipment
Mitchell Product Solution:
Manufacturer’s designated supply channel. This may also include those parts originally
manufactured by endorsed OEM suppliers, which have later followed alternative Quality
distribution and sales processes. While this part category is often only associated with Recycled
crash replacement parts, the automotive aftermarket also includes a large variety of Parts (QRP)
mechanical and custom parts as well. Mitchell quality recycled parts (qrp™) is
the most comprehensive source for finding
• Non-New/Remanufactured: Parts removed from an existing vehicle that are cleaned, recycled parts. It gives online access to a parts
inspected, repaired and/or rebuilt, usually back to the Original Equipment Manufacturer’s database compiled from a growing network of
specifications, and re-marketed through either the OEM or alternative supply chains. more than 3,300 of the highest quality recyclers
While commonly associated with mechanical hard parts such as alternators, starters and in the U.S. and Canada, covering more than
400 part categories representing access
engines, remanufactured parts may also include select crash parts such as urethane and
to nearly 44,000,000 parts from recyclers’
TPO bumpers, radiators and wheels as well. parts inventories—updated daily. QRP is fully
• Like Kind and Quality (LKQ): Parts removed from a salvaged vehicle and re-marketed integrated with UltraMate for total ease-of-use.
In addition, for selected QRP parts, UltraMate
through private or consolidated auto parts recyclers. This category commonly includes all automatically applies Mitchell’s Assembly Time
types of parts and assemblies, especially body, interior and mechanical parts. Guide labor allowances and P-pages specific to
Editor’s Note: It is commonly understood within the collision repair and insurance industries that a LK parts replacement.
very large number of LKQ “parts” are actually “parts-assemblies” (such as doors, which in fact include
numerous attached parts and pieces). Thus, attempting to make discrete comparisons between the
average number of LKQ and any other parts types used per estimate may be difficult and inaccurate.
Mitchell Industry Trends Report 20

21. Mitchell Collision Repair Industry Data (con't.)
original equipment Manufacturer (oeM) Parts Use in Dollars
In Q3-2010, OEM parts represented only 67.4% of all parts dollars specified by Mitchell-equipped
estimators. These data reflect a 3.0 point relative decrease from Q3-2009. The trend in lower OEM parts
use seems to be leveling off in 2010.
OEM Parts, as a % of Total Parts Dollars per Appraisal
73.9% 73.9% 71.7% 70.4% 67.9% 67.4%
Q1/08 Q3/08 Q1/09 Q3/09 Q1/10 Q3/10
Aftermarket Parts Use in Dollars
In Q3-2010, 13.1% of all parts dollars recorded on Mitchell appraisals were attributed to Aftermarket
sources—up significantly from Q3-2009. Aftermarket as well as LKQ/Used parts have been the
beneficiary of decreased OEM usage.
Aftermarket Parts, as a % of Total Parts Dollars per Appraisal
10.7% 10.2% 11.4% 11.7% 13.2% 13.1%
Q1/08 Q3/08 Q1/09 Q3/09 Q1/10 Q3/10
Remanufactured Parts Use in Dollars
Currently listed as “Non-New” parts in our estimating platform and reporting products, Remanufactured
parts currently represent 6.1% of the average gross parts dollars used in Mitchell appraisals during
Q3-2010. This reflects a 0.7 point relative increase over this same period in 2009.
Non-New/Remanufactured Parts, as a % of
Total Parts Dollars per Appraisal
4.8% 4.8% 5.0% 5.4% 5.7% 6.1%
Q1/08 Q3/08 Q1/09 Q3/09 Q1/10 Q3/10
Like Kind and Quality Parts Use in Dollars
LKQ parts constituted 13.5% of the average parts dollars used per appraisal during Q3-2010—
reflecting a 0.9 point relative increase from this same period last year.
LKQ Parts, as a % of Total Parts Dollars per Appraisal
10.7% 11.1% 11.9% 12.6% 13.2% 13.5%
Q1/08 Q3/08 Q1/09 Q3/09 Q1/10 Q3/10
Mitchell Industry Trends Report 21