05.26.2008

 
Alliance Inspection Management Takes The Wheel Of Change

by Thyda Duong Staff Writer

Of the 15 million to 17 million new cars sold every year in the United States, roughly 10 million are inspected by one Long Beach-based company.

Since it began in November 2005, Alliance Inspection Management (AiM) has operated as a national, independent third-party evaluator of new, off-lease and fleet vehicles, inspecting cars at ports, rail yards, assembly plants, dealers, auctions and customers’ homes.

The company employs 450 people across the country – including 20 in Long Beach – and at the core of its operations is a management team well-versed in industry operations, given team members’ various backgrounds in the inspection business, at automobile companies and in the finance and information technology industries.

“We come from being a user of inspection services, and because we were frustrated with finding a good provider of that service, we actually flipped over and built one that would satisfy the needs of people like us,” says President and CEO Jim Yates, who served as director of remarketing for Nissan North America from 1998 to 2005. “It’s a unique element of our company.”

AiM’s vision, Yates adds, is to raise the quality and value of the inspection industry. “In the old days, the inspection business was an inexpensive commodity that people didn’t place a lot of value on, and because they didn’t place a lot of value on it, you couldn’t charge a very fair market price for your services,” he notes.

By creating quality condition reports and developing more efficient ways to collect and examine data, prevent damage to new cars and value the used vehicle as an asset, AiM will play a more significant role in the industry, he adds.

“I see us getting more and more involved on both the new and the used side in adding value for our customers, which will allow us to grow and become a more important part of the process,” he explains.

AiM’s rapid growth and efforts to create change in the vehicle inspection industry have not gone unnoticed; a panel of regional business, academic and community leaders has selected the company as a finalist for the Ernst & Young Entrepreneur of The Year award for the Greater Los Angeles Area. In addition, Mobile Enterprise Magazine named the company a best field-service award winner in 2007.

While the company’s main office is located in Long Beach, an equally important office is in Farmington Hills, Michigan, where the company services major customers such as General Motors and Chrysler. Smaller offices are also located in Jacksonville, Florida; Quonset Point, Rhode Island; and Mesquite, Texas.

In addition, AiM has three other companies that are part of its overall business, including its integrated subsidiary AutoComm Inc., Canadian company AutoComm Ltd. and TCM Total Claims Management, which assigns responsibility for transportation damage and carries out claims processing for manufacturers.

“Because of our inspection and footprint, we can determine where the car was damaged, [and] who had the car when it got damaged,” Yates says. “So it’s kind of an outsourced claims business, which is a growing opportunity for us as well – a natural offshoot to what we do.”

Part of the foundation of its business, however, is new-car inspection. AiM inspects vehicles at the end of the manufacturing line for quality checks and works jointly with vessel carriers, rail companies and industry to ensure quality and minimize damage during shipping and handling. It also performs inspections at dealerships for transportation damage.

During its inspections, AiM collects information on the frequency, location and severity of damage. Manufacturers are using AiM’s findings to determine how to best protect the vehicles, including where to install plastics and cushions.

“If we inspect 100 cars and we notice that 10 cars have a scratch on the driver’s-side door, there’s something going on in the process that is affecting that. So then we’ll follow that back . . . and try to figure out where that’s happening in our process so we can stop that,” Yates explains.

He notes that the levels of damage frequency change in different stages of transportation. The damage that occurs as a car is discharged off of a vessel, for instance, is very small, at roughly 1 out of 100. The opportunities for damage, he says, increase as people move the vehicles and load them onto trucks or rail cars. By the time the car arrives at the dealership, the rate is 3 in 100.

Used-vehicle inspections constitute another large part of AiM’s business, and this, Yates notes, is where the real evolution is occurring.

AiM inspects roughly 500,000 used cars annually, working with several manufacturers and rental car companies – including Nissan, Chrysler and Avis – to assess the condition, mileage and overall value of a car. AiM’s inspectors integrate various technologies into their work, using Panasonic Toughbook computers, digital imaging, Web-based scheduling and logistics.

Business-to-business sales of used cars are gaining popularity in the realm of Web-based marketplaces, he adds. The shift to online sales and purchases is transforming the industry from a historically industrial business into one that is becoming closer to the consumer over time, he says.

“Web-based auctions are becoming a very, very efficient way to sell these vehicles,” he explains. “Facilitating that growth is the fact that they always needed an electronic inspection condition report. . . . We’ve got real-time technology – hardware and software – [so] that we can go out, do an inspection, post that inspection up to a Web site the same day, instantaneously. . . . And because of that, you minimize transportation shipping costs, you minimize logistics fees, reconditioning fees [and] auction fees.”

The next evolution is the rise of Web-based consumer purchases, which Yates expects to become increasingly popular over the next several years. “Consumers are getting comfortable [with] buying on the Internet, especially the younger generation. I think that it’s our obligation to help build the infrastructure that will facilitate the necessary comfort level. And once that happens, . . . it will grow very rapidly.”