Looking back, it appeared as though a seismic shift rippled through the industry ten years ago. National Auto Glass Specifications (NAGS, which is a part of Mitchell International) announced a rebalancing of its benchmark pricing that took effect February 2005. PPG Auto Glass (now owned by Pittsburgh Glass Works), Pilkington (now a part of Nippon Sheet Glass), Mygrant Glass, Kryger Glass, Saf-ti Auto Glass Distributors and many other distributors responded to the pending changes with a resounding no: “We will not change our pricing.” Insurance companies, on the other hand, were another story.
Insurers also moved from flat fees for labor installations to hourly rates; a practice that has slowly dimmed over the past years as flat rates returned.
“NAGS’ benchmark will be significantly reduced to more accurately reflect retail market price levels and correct for the artificial inflation caused by the truckload list price methodology used prior to 2002,” NAGS officials reported in late 2004 when the shift was pending.
In response, many distributors came out with statements saying they were sticking to their current pricing.
“PPG Auto Glass will not implement the February 28, 2005, NAGS rebalanced list pricing as the basis for its customer pricing. The basis for customer prices will remain unchanged. The PPG Auto Glass current list prices and current addendum prices (Net Priced Parts), subject to additions, deletions and price changes necessitated by new parts and cost revisions, will remain in place,” PPG officials wrote in a statement at the time.
On the other hand, LYNX Services (which was then owned by PPG) sent a letter out saying its pricing was changing in response to NAGS.
“Most insurance companies have announced provisions to respond to the NAGS rebalance in a manner that will keep retail glass service providers revenue neutral. Consistent with its stated objective of assisting glass service providers through the rebalance transition, LYNX Services is taking steps to utilize methodologies for all of its insurance accounts that are similar to the rebalance response of major insurers. Doing so will help relieve inconsistencies and confusion that could be costly to glass service providers,” according to a statement by PPG.
“At the same time, retail glass service providers that do business with PPG Auto Glass are accustomed to and familiar with the current pricing methodology. In sustaining that common practice for those customers, PPG Auto Glass is also consistent with its objective of assisting glass service providers, keeping glass costs neutral, and reducing, to the extent it is able, the levels of confusion that might otherwise be experienced by glass service providers in the wake of the NAGS rebalance.”
And so the tidal wave occurred with many insurers adopting NAGS benchmark pricing changes. Fast forward to today and automotive glass company owners continue to share their opinions about NAGS pricing and the role it plays in the industry.
To view a history on NAGS changes AGRR™ magazine ran in November/December 2004, click here.
So where do you stand? Now that a decade has passed what role does NAGS benchmark pricing play in your business and the industry? Email your thoughts to email@example.com or share them on the glassBYTEs.com™/AGRR™ magazine forum here.