A car is an assembly of thousands of auto parts. The manufacturer of your car makes some of the auto parts like the fenders and body structure, sometimes even the glass. But the rest are assemblies of car parts made my manufactures to a very specific set of specifications established by the manufacturer’s engineers. Regardless of what kind of car you drive, in today’s global marketplace the auto parts literally come from all over the world. There has been no such thing as a truly all American built car for probably two or three decades, a direct result of globalization of our economy.
So when news broke last week about Japanese parts manufacturers fixing prices on car parts, I thought I should bring this to your attention, the American car owning public. Over 25 million vehicles are affected by this fraud, and it doesn’t matter who built your car, they were all affected.
Here is the story: Nine Japanese automotive suppliers and two former executives, have agreed to plead guilty and pay more than $740 million in criminal fines for fixing the price of auto parts sold in the United States. Now this has been going on for the last 10 years at least as far as the Feds have uncovered.
You can read the full article here:
In America we have anti-trust laws with protect the American consumer from being victimized by price fixing, monopolies and price gouging. In fact at the beginning of any meeting of the collision repair industry (of which there are 4-6 per year), an anti trust statement is read and strictly upheld. At these conferences insurance companies, manufacturers, parts manufacturers and collision repair shops meet and discuss issues affecting the industry just like most industries do. It would be a great time for them to all get together and agree to fix prices of auto body repair parts, and services. But they don’t because we have those laws that protect you the consumer, and for the most part, American businessmen and women operate in an ethical fashion.
These Japanese auto parts manufacturers see it another way however. If they fix the price of the auto parts together as a group, then manufacturers and repairers have nowhere else to turn. In other words they get stuck with these high auto parts prices, and you get stuck paying the bill.
Even if you have a low deductible, you are paying for this every time you mail a monthly or yearly insurance premium check.
So when you look over your auto body repair estimate in disgust that a fender is $400.00 and a bumper is $350, and so on, you can begin to understand that the fault for the auto parts prices being what they are not because of your repair shop, or even your Insurance company. The companies who make these auto parts set the prices. This can often have far reaching consequences for you in the event of a collision, such as having your car declared a total loss, or having it fixed with low grade aftermarket auto parts.
Some of the ways that you can lower the impact of the repair cost if you are a self pay customer, is to agree to use salvage parts (parts from a car in a salvage yard) or ask your shop if there is anyway the part can be repaired instead of replaced. Sometimes a repair costs less than a replacement.
So the next time you are in the market for a new or even a used car or collision repair services, and you are dealing with the sticker shock, At least you know now some of the factors that have been driving these prices skyward.