Industry Predictions: What's in Store for 2012?
December 19, 2011

by Penny Stacey

As 2011 comes to a close, glassBYTEs.com™/AGRR™ magazine has surveyed several of the industry's leaders for their predictions on the year ahead. One popular topic and a major indicator, some say, for the auto glass business is how many miles will be driven in 2012.

Michael Barry, who recently was named CEO for Chicago-based Glass America, predicts miles driven will remain somewhat level in 2012.

"Being relatively new to the industry, I believe that 2012 will probably not be much different than 2011 for the industry as a whole," says Barry. "Our economy is still facing stiff headwinds from the all the government and consumer debts here and around the world. Also, dynamics specific to oil will keep the price of gas high. Thus, miles driven will probably not grow much next year, if at all. My guess is all of this will keep demand for our services in check."

The economy's effect on what's ahead also is a recurring theme among the industry's leaders. Tom Feeney, president and CEO of Safelite, predicts a "challenging year."

"We all have felt the impact of a struggling economy, particularly in the vehicle glass repair and replacement industry," says Feeney. "With high unemployment rates and falling consumer confidence continuing to put pressure on the economy, 2012 will likely be another challenging year. Miles driven are down, new car sales are stalled and, of course, the weather always remains unpredictable."

He adds, "With these pressures, the vehicle glass repair and replacement industry is likely not to grow much, if at all, in 2012."

David Casey, president of Orlando, Fla.-based Superglass Windshield Repair, is hopeful about the new year—-but remains modest in his predictions.

"Since cars sales are staying healthy, and products continue to be trucked across the country, I would think auto glass could retain the growth from last year," says Casey. "I don't see any reason that the auto glass industry is going to create many new jobs in 2012 or see giant growth this next year. The most optimistic view would have the industry not go backward in sales."

Mark Liston, who just last week was named president of Waco, Texas-based Glass Doctor, predicts a "modest rebound, especially on the flat glass side of the business."

"We will continue to see a softening in auto glass and a continued consolidation of glass shops across the country," adds Liston.

Casey, however, thinks such consolidation will slow in the new year.

"Although it would appear at first that more consolidation would continue, I think it will slow greatly for two reasons. First, trying to be everything to everyone everywhere is no bed of roses and I don't think it's making anyone a lot of money right now," says Casey. "Secondly, the independent companies that are still standing are the strongest, most talented and most determined shops left. They're not giving up their market share and they are doing a better job than ever in promoting, installing and repairing."

Some predict that growing comprehensive insurance deductibles also will continue to impact the auto glass industry.

"I think that we will continue to see higher deductibles for glass coverage and the cash market [will] continue to grow," says David Zoldowski, president of Auto One Glass and Accessories in Brighton, Mich. "That being said, the newer windshields in today's new cars are far more complex and we will continue to see this as a bigger and bigger problem for aftermarket glass manufacturing, resulting in consumer complaints associated with quality and functionality."

Troy Mason, owner of Techna Glass in Salt Lake City, Utah, agrees. "I believe the trend of our industry becoming more and more of a cash, service business will continue," he says.

With a growing cash market, the number of consumers looking for high-quality service will increase as well, according to Feeney.

"The main influences will be driven by our customers and the vehicle designs that we work on every day," says Feeney. "Clearly customer service, speed of that service, high-quality installations and repairs as well as our ability to get the work done where and when our customers want it will continue to emerge as a trend in our industry as it transforms."

Consumer confidence also will play a role. "If consumers don't feel confident in the economy, we'll see customers driving longer with chipped or cracked windshields," says Liston. "If they are confident, as hopefully Black Friday sales numbers indicate, we'll see an upswing in the auto glass business."

David Rohlfing, who recently resigned from the role of president and CEO of Glass America, predicts 2012 will be "a difficult one for the industry as a whole." He points to the third-party administration area as a concern to be looked at in the year ahead—particularly with the pending move of Allstate's glass claims administration to Safelite Solutions.

"The move of Allstate to Safelite is obviously a negative one to everyone but Safelite, but depending on how successful both of them are in persuading Allstate agents to not recommend choice to insureds will determine how negative," says Rohlfing. "Hopefully the insurance industry will wake up to the negative long-term effect of putting all their eggs in one basket will have to [the insurance] industry and the [auto glass] industry as well. Without someone taking a leadership position to really challenge Safelite, the probability of them continuing to put notches in their belt seems a given."

Zoldowski predicts that 2012 will be a banner year for legislation related to the third-party administrator relationship. His own state currently is reviewing legislation that would create a code of conduct for third-party administrators that also have auto glass divisions.

"I believe next year will be a watershed year for the U.S. industry. The independents across the country have legislation in the legislative process in several states … ," says Zoldowski. "I hope this will answer the question of whether an auto glass company can make glass, sell glass, install glass and provide [third-party administration] services for the majority of automobile insurance underwriters in America."

Several of the industry's leaders also offered their thoughts on the upcoming presidential election and the effect—if any—-it might have on the auto glass business. Watch glassBYTEs.com™ in the coming days for that story, and please send your own thoughts on the 2012 presidential election to pstacey@glass.com to be included in this special look at the year ahead.

This story is an original story by AGRR™ magazine/glassBYTEs.com™. Subscribe to AGRR™ Magazine.
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