The Age of ADAS

Nov. 1, 2019

A guide to determine whether or not to take the plunge 

The truth of the matter is, as a repair shop owner, you hold your customers’ lives in your hands. 

That may sound dramatic—and it is—but it’s true. 

When a customer comes in, they entrust you with their vehicle, which, when running smoothly is a great convenience, but, if anything goes wrong, can be, at best, a headache and, at worst, a catalyst to injury or even death. 

“The professional of today needs to have a high-level awareness about the world that’s changing rapidly. If they don’t pay attention, they’ll find themselves in trouble,” Scott Brown, founder of the Diagnostic Network and former president of iATN, says. 

Repairers need to have an intimate knowledge of the vehicles that they are working on so they can properly repair them and get their customers safely back on the road. The John Eagle Case, a case where a dealer body shop was fined $31.5 million for performing an improper repair that led to a couple being trapped in a burning car after a crash, was a wakeup call to the entire industry to the liability that auto industry professionals have. 

Today’s vehicles are now referred to as “computers on wheels”; in fact, vehicle design advancement was third on the list of the biggest challenges facing the industry, according to the Ratchet+Wrench Industry Survey (followed by the technician shortage and the rising cost of doing business). 

One of the biggest buzzwords in the industry in 2020 is advanced driver-assistance systems (ADAS)—and it’s not just for the collision repair industry.  Not only is knowledge essential to best serve customers, as the two owners profiled in this feature have found, ADAS calibrations can also provide an additional revenue stream. 

The shop owners, as well as two industry experts, answer four common questions about ADAS to help determine what you absolutely need to know right now and whether or not to move forward with the investment. 

Why should I care about ADAS? 

The global advanced driver-assistance systems (ADAS) market was valued at $39.63 billion in 2018. By 2026, it is projected to reach $189.14 billion by 2026 (according to a report from Allied Market Research). 

That’s rapid growth. If those numbers don’t have you convinced, consider this: almost all of the vehicles coming out on the market have some sort of ADAS capabilities. AAA stated in 2018 that at least one ADAS feature is available in 92.7 percent of new vehicle models available in the U.S. Whether you’re aware of it or not, these vehicles are in your shop. 

Now, for those of you that are still thinking, “That may be true, but the work I do doesn’t affect ADAS,” think again. Here are examples of common jobs that come into independent repair shops every day that could impact the systems within a vehicle, according to Randy Briggs, CTI Research and Development Center manager at the CARQUEST Technical Institute: 

  • Any alignment or repair that changes thrust angle 
  • Any alignment or repair that changes ride height 
  • Windshield replacement and glass choice 
  • Brake service and parts choice (including ABS and stability control) 
  • Custom wheel and tire work 

Briggs, who led session on ADAS at the 2019 Vision Hi-Tech Training & Expo, shares the importance of understanding ADAS and whether or not he thinks it’s necessary for all shops to being doing ADAS work. 

Why do independent shops need to pay attention to ADAS?

There’s a number of reasons. Many everyday services affect the performance of ADAS. A lot of shops do alignments and tire work and suspension—all of that can impact ADAS. Even if you’re not doing ADAS repairs, you’re doing repairs that affect it. Automated braking systems, for example. If a particular shop does a brake repair and they make the wrong brake pad choice, that can affect the function of that collision system. 

Do you think the majority of shop owners understand the need of familiarizing themselves with ADAS? 

The shop owners that are progressive and go to classes are aware of it. That is not the majority coast to coast— it’s the minority. I would have to say, from what we see as far as misalignments and brackets that weren’t mounted correctly, there’s a general unawareness of ADAS and what they have to do to not adversely affect the system. 

A year ago, I was in a collision repair shop and they said they didn’t have any cars that had ADAS-related issues. I looked around, there were seven cars there that did. It was right there in front of them, but they didn’t have the experience and training to realize what they were seeing. Fortunately, that’s changing rapidly as training becomes more available. 

Do you think all independent repair shops should perform ADAS calibrations? 

Not necessarily. The answer is two parts. Is there a need to have an awareness about how it works and what calibrations are needed? Absolutely. Every shop needs to have working knowledge.

Do they need to do it? It depends on their model. There are many business models out there that do this type of work. Mobile repair now specializes in programming and ADAS. There are specific calibration centers that service collision shops in their areas. There’s also the dealership. 

Depending on the market and timing, it could be a viable business model. An independent shop could become the local business expert for ADAS. 

Each shop’s business model differs. The first thing you need to do is examine workflow from your customer base and see if there’s enough there to support the investment. From there, you need to step outside the door and see what businesses in the area need that service whether or not you can market to them. Do you have a good working relationship with collision repair centers? It could potentially open up other revenue streams as well. Many collision repair centers are outsourcing air conditioning for example, that could open an avenue or revenue stream. You could start by advertising ADAS and pick that up along the way. 

What is the minimum that a shop should do to prepare for ADAS? 

That really depends on the work that a shop does. You need to have awareness and, especially, the appreciation of the accuracy required of mounting and calibration. Not only the awareness of the actual processes, but awareness for the degree of accuracy, as well. 

When it comes to training, they need all that they can get. We offer ADAS classes and are continuing to develop them. I-CAR offers it on the collision repair side. 

What advice would you have for shop owners regarding ADAS? 

In general, be critical of accurate OE service information to go on. You need accurate OE service information to refer to. We’ve seen service documents change midyear because they find a change to the process. You can’t take that procedure that you did in January and throw in your good-stuff-to-know folder, pull it out in December, and expect it to be accurate. 

You need to do your homework ahead of time to make sure you’re equipped for calibrations, initializations and reprogramming and from there, you need to appreciate the accuracy that’s required and know your equipment inside and out. 

Is the investment worth it? 

Jack Perea, owner of Superior Replacement in Riverside, Calif., has seen his sales go up 30 percent in the last 16 months (reported in September), and much of that success can be attributed to his focus on ADAS repairs. 

In June, Perea opened a new location, which included 12,000 extra square feet to accommodate ADAS calibrations for body shops. He has performed calibrations since 2017, but was struggling for space. This location does roughly $60,000 per month in ADAS calibrations with pricing for this work in the $250 range depending on what exactly is required. Perea says he believes there’s room for even more ADAS work, which is why he opened another location in September. 

Perea has been able to turn it into a profit center, but the investment wasn’t cheap. There’s equipment, training, space and subscriptions to consider. Perea says that he invested close to $300,000 for both of his centers (the second opened in September 2019). Perea has 13 annual subscriptions for access to proper procedures, which he estimates costs him $3,000 per month, and that’s on top of the new building and equipment costs. Perea says the choice to invest was right for him, but it’s not the right choice for everyone. 

Very few shops are able to invest this much in equipment and technology. The 2019 Ratchet+Wrench Industry Survey found that only 15 percent of respondents had a budget of over 10 percent of their annual revenue for technology and tools. However, spending more doesn’t always result in better numbers. The majority of shop owners (34 percent) fell within the 5 percent or less range and seemed to actually perform better in a number of metrics. For example, of those that spent 11–15 percent of their annual budget on tools and equipment, only 16 percent generated over $1 million in sales per year versus 65 percent in the group that reported a budget of less than 5 percent. Sixty-seven percent  of those that had a larger budget percent had an ARO between $200–$399 versus only 3 percent that had a lower ARO in the 5 percent or less range. 

Spending more doesn’t always equal better results, which is why shop owners really need to determine whether or not the investment is the right fit. 

“If you’re going to do it, get some good equipment, get educated and have proper floor space. It’s so precise—there’s little room for error,” Perea says.  

Performing Market Research 

Before jumping in and making a huge investment, it’s necessary to determine, first off, if there’s a need for ADAS and second, to determine which vehicles your shop sees so you can get the proper equipment and access to repair information for those particular vehicles. 

Determine the need in your market.  

Do you have body shops around you that are looking for this type of service, or is the market already penetrated? If it is, it may not be worth it. If, however, there’s an opportunity to differentiate your business and create an additional revenue stream, it’s worth looking into. 

“The collision repair industry is seeing an abundance of vehicles that needs ADAS, a lot of them don’t have the facilities to do the alignments and they’re typically talking to dealers,” Brown says. “Shops that have a relationship with body shops can see that as a revenue stream opportunity. They might just want to invest and funnel that business.” 

Figure out the vehicles you want to service. 

“It’s really expensive if you want to do everything,” Kirk Holland, owner of Gladney Automotive Solutions in College Station, Texas and co-chair of NASTF’s service technology team, says of the investment in ADAS work. 

Working on all makes and models is the most expensive, obviously. This is the route that Holland takes because he sees the need for it. Holland says that another route that shops can take is to just do domestic or European, but that decision needs to be based on the shop’s clientele. 

For example, a shop that doesn’t see many European vehicles shouldn't invest in that subscription, even if it’s more cost effective up front, because the return on investment will not be there. This may be true for many—it seems domestic specialty shops are less popular than import shops, according to the 2019 Ratchet+Wrench Industry Survey data. None of the respondents reported being a domestic speciality shop, 10 percent were import specialty and the majority and 78 percent were general repair. This may indicate that the majority of shops will have to make a more substantial investment to cover the import vehicles or shell out more money to cover a wider range. 

The subscriptions vary, some are more expensive than others. Holland says that markets are so different, so there’s not a clear cut answer for what shops should invest in as far as vehicles. 

If a shop owner isn't willing to sit down and look at vehicle demographics, they're not the right person for ADAS, Holland says. 

Assess Your Space 

Perea had to move facilities to perform the amount of ADAS work that he wanted to do, and even after that, he decided to open a new facility so he could perform what he felt like what his actual capacity. 

Look at square footage. 

Perea’s original location limited the amount of ADAS work that he was able to do, so he moved his entire operations, which added an additional 12,000 square feet. His original 2,300-square-foot building left him struggling for space. This could be the case for many shop owners. Almost half (48 percent) of the Ratchet+Wrench Industry Survey respondents have shops that are less than 5,000 square feet. 

ADAS calibrations require a significant amount of room, roughly 30 feet wide by 40 feet deep, Perea says. Briggs says that the amount varies based on make and model, but a good rule of thumb is two bays in length and width are required. 

Take into account other requirements. 

Space isn’t the only demand that comes with ADAS. Read up on calibrations and see what the procedure requires and anything that your current space may not be able to provide.

For example, in order to properly perform the calibrations, level floors are a must, as is proper lighting, Perea says. Briggs says, if, for example, windows are behind the target or there are lights casting shadows, that can affect how a forward-facing camera calibrates. One way to get around this is to put up lighting curtains that provide a neutral background, Briggs adds. Another way to keep the glare away is to keep lights up high, a technique Perea uses. 

What do I need to perform ADAS repairs? 

Once you’ve decided to take the plunge, it’s time to start getting ready. Training and equipment are the two main considerations. 

“It took me about a year in 2016 to get a healthy amount of equipment and knowledge before I was able to do it,” Perea says. 

One of the main reasons that many shops are hesitant to get into it is because of the lack of information and training. It’s difficult, at this moment in time, to know exactly what’s right. In fact, 14 percent of the Industry Survey respondents reported not having access to OEM information, with 3 percent citing availability of repair information as the biggest challenge facing the industry. 

“I see right now we’re in a state where the industry is not aware of how it works and what services are required and the information is ambiguous,” Brown says. 

The ADAS market is growing rapidly, with new systems coming out every day. The problem, Brown believes, is that OEMs rushed these systems to market without giving much thought as to how they would need to be repaired. So, that means that shop owners that want to invest will need to do a lot of independent research. 

Find the Right Equipment 

With every new endeavour comes the expensive price tag of new equipment. Like much of the equipment you already own, ADAS work has different requirements based on the vehicle, so that requires an evaluation of what’s available and what the best choice is for your mix of vehicles to determine the best investment to cover the widest range. And then there’s the ever-existing debate of OEM versus aftermarket. 

Determine the right choice: OEM or aftermarket. 

When it comes to equipment, no matter what repair, one of the biggest debates is deciding between the aftermarket and the OEM. Each have advantages, OEM are certified for the specific vehicle and are supposed to perform exactly as needed. Aftermarket, in many cases, can perform just as well (some claim to be even better) and tend to be less expensive and cover a larger variety of makes and models. 

Briggs says he’s used aftermarket target and scan tools in his research at the CARQUEST R&D center and he’s had success with both. Briggs doesn’t take a stand when it comes to one over the other, but, whichever route a shop takes, he does encourage continual maintenance and checks to make sure equipment is working properly and documentation of proper procedures to prevent liability.

Perea did a lot of research to make sure he was getting the right equipment, most of which was done on his own since the dealers were not forthcoming with their tools and equipment and the OEMs are difficult to connect with. Brown says that there are a lot of forums that can be used to help determine the right choice, such as iATN. There are also classes that can help with this. Brown recently attended a class on ADAS where they did side-by-side comparisons of aftermarket and OEM calibrations. 

“One calibration, they were exactly the same and the aftermarket worked much more efficiently, but on the other alignment, the aftermarket was very subjective because the tooling placement was very different,” Brown says. 

Both Perea and Holland use strictly OEM equipment at their shops for ADAS. 

“I didn’t want to buy aftermarket and then not know if it was capable. I wanted to eliminate any variables,” Perea says of his choice. 

Holland agrees and says that the safest, verified option is the best way to go. A bonus of going with OEM is that, in the case that someone is hurt, you have the documentation and tools that proves you did everything required by the manufacturer. 

That being said, Holland says that he believes for around a $35,000 investment in aftermarket equipment, a shop can do 75 percent of the calibrations out there. 

Get the Necessary Training 

Training is important. Everyone knows that. But it can often fall by the wayside. Fewer than 3 percent of the industry survey respondents allot more than 10 percent of their annual budgets to training, with the majority of respondents in the 1–5 percent range.  

That being said, you don’t need to overspend. Find the training that’s right for your shop. According to the 2019 Ratchet+Wrench Industry Survey, the majority of respondents who reported a training investment over 10 percent made between $500,000–$749,000 in annual sales (43 percent) and had an ARO between $200-$399 (57 percent). Compare that with the majority of respondents (51 percent) that have a training budget in the 1–5 percent range. The majority of those shop owners (35 percent) fell within the $1 million to $2.5 million range for annual revenue. The majority (37 percent) were within the same range for ARO, but there was more of a distribution in the higher ranges, including 34 percent in the $400–$599 range. 

Regardless, if you invest in ADAS, proper training is essential. Luckily, training for ADAS is becoming more readily available—if you know where to look. 

Adapt your mindset. 

“You need to understand that the car has been in a collision and how they bend and flex and break,” Perea says. 

For shops that want to take on ADAS repairs, they need to understand that there are troubleshooting issues and understand that just because something comes up as a “pass,” does not necessarily mean that it’s good to go. Holland says that he’s done case studies where he’s moved a target way out of line on purpose and the calibration will still pass. That’s why shops need to test vehicles and get a good understanding of what a good calibration looks like.

“God forbid you have an accident that pushes everyone to the dealership,” Holland says. 

Find the information. 

Unfortunately, there’s not a one-stop shop to get you to where you need to be for ADAS work, says Brown. Today, at least, it will be a lot of self-research. 

Holland says that most manufacturers will not let independent shop owners attend their classes, but that I-CAR (the Inter-Industry Conference on Auto Collision Repair, an organization that provides information and skills required to perform complete and safe repairs) is a great resource, even though it does not replace the OEM information. I-CAR has online classes available and the majority of classes fall within an $85–$165 range. 

Here are a few other options for ADAS information and training resources: 

  • CIC (Collision Industry Conference) 
  • IMI (Institute of the Motor Industry) 
  • Mobile Auto Solutions 
  • Local shops (for example, David Friend, owner of MobileTech in Wilmington, N.C., hosts a two-day course that Brown recommends) 
  • Facebook groups 

Get the right people. 

Investing in something new, especially something as complicated as ADAS, requires the right people for the job. Perea says without his staff, he wouldn’t have been able to undertake such a huge investment and make it work. 

“You need to have the right people,” Perea says. “They should be computer savvy, patient, open-minded and open to learn.” 

Finding the right people is easier said than done. An overwhelming majority of respondents (61 percent) reported the tech shortage as the biggest challenge facing the industry, meaning many business owners may not have the necessary staff in place to make it work. 

How do I turn it into a profit center? 

Equipment. Training. Staff. ADAS is a huge investment and will only work if you’re able to turn a profit by doing it. 

Perea and Holland have both been able to create an additional profit center through performing ADAS calibrations, which they’ve been able to do by creating solid relationships within the market around them and delivering quality work in an efficient amount of time. Here are three tips for marketing your new venture. 

Tip No. 1: Sell yourself as different. 

Most of the businesses that offer ADAS calibrations are either entirely mobile or are dealerships. By being different, you can set your business apart and attract partners that aren’t happy with current offerings. This is exactly what Perea did. 

“Most of our competitors are 100 percent mobile,” he says. “Now, with our facility and still offering mobile, it took us to a new level.” 

Another opportunity lies with dealerships. Many dealerships take longer, and offer don’t deliver the quality of service that an independent shop can offer, which Perea uses when he markets his shop. 

 “The body shops are about getting cars done quickly and properly,” Perea says. “We can get it to our facility and turn it around that day or the next day—we can cut it [time] in half from the dealership.”  

Tip No. 2: Take advantage of existing relationships. 

Both Perea and Holland had a solid jumping off point, as they both had worked with body shops in their area in the past and had created a solid reputation for themselves. This allowed them to have a built-in customer base when they began doing ADAS. 

“It was kind of a smooth transition because we were already known for electrical issues and problem solving,” Perea says of building up his customer base. 

Once he decided he was all-in, all he did was go to his accounts and let them know that he had the equipment and would now be doing ADAS work and then expressed that he would like the opportunity the next time they needed it done. Once the work was sent, it was up to him to prove he deserved that work and keep it. 

Tip No. 3: Earn trust and business. 

Getting one job is great, but in order to create a profit center, you need referrals and more jobs coming in constantly, which means you have to handle each job like it could be your last. 

One way that Perea does this is through constant communication. He prides himself on a quick turn-around, if however, he needs a new target or is running behind, he lets the account now and offers them the option to send it to the dealership instead. He also offers vehicle pickup and dropoff, which is an extra that many in the area appreciate. 

ADAS can be a great investment, but it’s not right for everyone. Use this guide to decide whether or not it’s right for you, but at the very least, make sure to read up on the systems and become familiar with the jobs you are performing that could impact these systems to protect yourself—and your customers—from the consequences of a negligent repair.  

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