Industry Reacts to Price Increases

In the wake of announcements of price increases by one manufacturer, Pittsburgh-based PPG Industries, and two distributors-Hayward, Calif.-based Mygrant Glass and Memphis, Tenn.-based ACI Distribution, a subsidiary of Vitro America Inc.-auto glass shops and insurers must contemplate how to deal with the increases. PPG, Mygrant and ACI all have announced that they're raising the prices of windshields by 4 percent and the prices of tempered parts by 7 percent, effective July 30.

Neil Duffy, owner of Auto Glass Menders in San Jose, Calif., says he likely will have to pass the costs on to his customers. "I do most of my bidding on a cost plus basis, which means that the new costs will affect my retail or corporate customers," he says.

Karl Andersen of Andersen's Auto Glass in Williston, Vt., says he also will pass the price increase on. "Price increases are an everyday part of life. Be it food, clothes, mortgages, leases, gas, the list goes on," he says. "Increases … happen frequently for the above mentioned-why should it be any different for glass?"

He adds that being honest with the consumer is usually the best policy. "Be honest and say glass prices have gone up, just like everything else," Andersen says.

Andersen actually conducts mailings to notify his accounts of pricing increases such as this one, so that customers aren't surprised when the work is completed-and so they know the reason for the increase.

Duffy adds that he's surprised the increases are coming so long after the publication of the most recent NAGS calculator. "As you know, the new NAGS price book was published less than 90 days ago," Duffy says. "In the 'good old days' that publication was the harbinger of both new higher rates and the inevitable rise (sometimes) of producer pricing."

In turn, this leads auto shops to await the new calculator-due out this fall-to find out if it will reflect the increases.

"The smaller shops and chains are caught without cover until the new NAGS is published and prices hopefully rise-assuming NAGS will acknowledge them," Duffy says.

While auto glass shops plan their strategies for dealing with the current increases, insurers also must consider their next step.

One insurer representative, who preferred to remain anonymous as a condition of having the discussion, says currently, his company has no plans to change its policy based on the changes, but that could change if other manufacturers and distributors follow suit.

"If pricing goes up across the board, we may have to consider something," he says.

He also notes that he doesn't feel shops should have to combat the costs themselves.

"Shops shouldn't have to absorb that," he says.

CLICK HERE for related story about PPG Industries.

CLICK HERE for related story about Mygrant Glass.

CLICK HERE for related story about ACI Distribution.

CLICK HERE to discuss the pricing increases.