Mitchell Releases Latest Edition of Industry Trends Report
Data-driven approach to analyzing Japanese tsunami's effect on parts pricing shows little impact to Japanese vehicle parts pricing
SAN DIEGO, CA—November 2, 2011—Mitchell, a leading provider of technology, connectivity and information solutions to the Property & Casualty claims and Collision Repair industries, today released the fourth quarter 2011 edition of its Industry Trends Report (ITR)—the company's quarterly publication that highlights industry related trends, news items and statistics.
This edition features the article, "Did the Tsunami in Japan Devastate Asian Parts Prices?" written by Mitchell's Vice President of Industry Relations, Greg Horn. In the article, Horn leverages the Mitchell Collision Parts Price Index (MCPPI)—a metric similar to the Consumer Price Index (CPI)—to identify trends in parts prices vs. inflation and assess the impact of the tsunami on parts selection behavior. Mitchell created the MCPPI specifically for the collision repair industry and designed it to analyze and track parts price changes using the industry's most comprehensive data for the top 20 most replaced collision parts. Using the latest MCPPI data to analyze the most replaced collision parts and contrasting it with a subset of Japanese only vehicle parts reveals the true impact of the tragic tsunami this past spring on Japanese vehicle parts pricing, including whether costs increased as a result of shortages.
"The tsunami in Japan was incredibly tragic and affected so many. After having a chance to absorb the dramatic impact on their Nation, we wanted to see how it would affect the collision repair community,” said Horn. “Our in-depth analysis using the MCPPI indicates the tsunami had little net impact on parts pricing. Isolating the Japanese vehicle make parts index and breaking out the subset of Japanese make vehicles by part type shows that the Japanese vehicle index mirrors broader market trends. In the aggregate, parts prices increased, even in a year where inflation has slowed to the lowest rate since we began measuring the index. OEM indexed parts decreased in price while aftermarket and remanufactured parts increased slightly. Spot shortages and hoarding may have occurred immediately after the tragic events in the spring but had little material impact on Japanese vehicle parts prices."
Horn added, “Delving into insurance claims data is yet another way we demonstrate our commitment to helping the P&C and collision repair industries assess marketplace conditions and adjust accordingly, which is critical since parts comprise approximately 42 percent of average repairable estimate dollars and directly impact estimate severity. Being aware of the impact of significant events and being armed with the latest collision repair information and analysis helps our clients increase customer satisfaction, thus improving their business performance.”
Other valuable points of interest in the current issue of Mitchell's ITR include:
- The initial Average Appraisal Value, calculated by combining data from all first and third-party repairable vehicle appraisals uploaded through Mitchell systems in Q3-2011 was $2,536—a mere $3 lower than the previous year's Q3-2010 appraisal average. Applying the prescribed development factor of 2% to these data produces a final anticipated value of $2,587.
- Mitchell's Q3—2011 data reflect an initial average gross Collision appraisal value of $2,812—$55 less than this same period last year. However, applying the indicated development factor of 3%, suggests a final Q3-2011 average gross collision appraisal value of $2,884—an increase of $17. Also of note, the average Actual Cash Value (ACV) of vehicles appraised for Collision losses during Q3—2011 exceeded $14,000 for the first time.
- In Q3—2011, the average gross appraisal value for Comprehensive coverage estimates processed through Mitchell servers was $2,694—compared to $2,600 in Q3-2010. Applying the prescribed development factor of .19% produces a $99 increase. The low supplement amount result reflects the heavy hail appraisals written during the quarter.
Complete content is available in the latest Industry Trends Report, which may be downloaded in PDF format by visiting www.mitchell.com. First published in April 2001, Mitchell's Industry Trends Report has grown in both content and circulation, now reaching more than 33,000 collision and casualty industry professionals.
Mitchell empowers clients to achieve measurably better outcomes. Providing unparalleled breadth of technology, connectivity and information solutions to the Property & Casualty claims and Collision Repair industries, Mitchell is uniquely able to simplify and accelerate the claims management and collision repair processes.
As a leading provider of Property & Casualty claims technology solutions, Mitchell processes over 50 million transactions annually for over 300 insurance companies/claims payers and over 30,000 collision repair facilities throughout North America. Founded in 1946, Mitchell is headquartered in San Diego, California, and has 1,700 employees. The company is privately owned primarily by the Aurora Capital Group, a Los Angeles-based investment group. For more information about Mitchell, visit www.mitchell.com.
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