By on February 23, 2013

The story about fake taxi parts did not surprise me at all. “Police busts fake parts scam” is a fixed part of the standard repertoire of the auto industry theater troupe. That play is longer running than Les Miserables, it definitely made more money than the Phantom of the Opera. The play is a clever sham to separate you from your money, and I helped write the script.

As long as I was in the vehicular propaganda business, each year, we ran a series of ads that warned against evil fake parts. Each year, at around the same time the ads ran, there was a series of high-profile busts of “Product Pirates” that reverberated through all spheres of the media.

One of my favorites was an ad headlined “Of the bolt that ate the engine,” a harrowing tale of a steel bolt that munched, by way of corrosion, the aluminum block of a high-powered Volkswagen engine. Of course, the voracious fastener and villain of the epic was not an Original Volkswagen Part®, but a heinous imitation. The ad won a prize, and the praise of the client.

Taxi part bust

The idea of the ad was not to teach the public the difference between a common steel bolt and the hot dipped glossy galvanized (or “sauer glanzverzinkt”, the tale was in German) kind. The idea was to sow fear, uncertainty and doubt, and to trick the customer into paying $20 for a bolt that costs less than a penny ex works in Suzhou, China, minimum order quantity 300,000. Actually, the ad did not try to sell bolts. Its objective was to convince the customer that if it doesn’t say Volkswagen on the package, the work of the devil will lurk in the box.

Taxi part bust in Paterson, NJ

Forget the police investigating these matters. When the police makes “arrests based on a tip-off,” then the tipsters are usually always paid by the automakers. Automakers hire full-time detectives to track down imitations. You cannot imagine our joy when the detectives found brake pads made from chicken shit. That was in the 70s, and we played it up bigtime. If you Google Bremsklotz (brake pad) and “Hühnerdreck” (chicken shit), you still get thousands of hits, forty years later. Volkswagen part good, non Volkswagen part chickenshit, the ads of nearly half a century ago are still paying off.

Each year at the Automechanika Frankfurt. Picture Jens Rehberg, Kfz-Betrieb

The Automechanika in Frankfurt, alternating every two years with the Frankfurt Auto Show, is the world’s largest trade show for the automotive aftermarket. A fixed part of the show is the ritual busting of product pirates. At each Automechanika, platoons of armed customs agents hit the booths of mostly Chinese companies, in search of the sham parts. Each year, it makes big headlines, but it is all part of the grand spectacle. If you get caught, you pay €500 ($660), and that’s usually it.

Keep cash handy to pay the cops. Picture Jens Rehberg, Kfz-Betrieb

The caught Chinese happily pay the money, snap a few pictures of the police action, and claim at home they were shaken down for €5,000 and had to pay in cash to avoid arrest. The story is all too believable back home in Laizhou, Shandong province, and the difference will be invested into visiting the famous fine Frankfurt all nude sex clubs. Next year, at the 2014 Automechanika, the show will repeat again.

Paying detectives, ad agencies, and the media for the story usually costs much more than the few parts that are kept off the market. Then why all the drama? Parts are huge business.

An automaker is happy as punch if he can report an operating margin of 10 percent on his cars. The guys in parts think this is hilarious. Their operating margin is not a percentage, it’s a factor. Charging 10 times the production price is considered aggressive rock bottom pricing. A factor of several hundred is common. Our hero, the hot dipped glossy galvanized bolt, was marked up 2,000 times between China and customer. If the drug cartels ever find out, they drop their guns and start making auto parts.

Until next year. Picture Jens Rehberg, Kfz-Betrieb

The real targets of the annual propaganda campaign are not the dumb schmucks who print a Ford, GM, or Volkswagen logo on a parts package. The true enemies are called NAPA, Pep Boys, Autozone et al, commonly known as “the aftermarket.” The objective of the war is to tar and feather them with the same brush, to disturb and to degrade their business (market size approximately $300 billion annually, bigger that the car market) and to shift market share to the OE parts and hence to the bottom line of the automakers.

That, however, is not how the story is told. The “counterfeit parts” in the taxi story were real parts. The only thing that was fake was the logo on the pack of “knockoff parts.” They were fake packages, not fake parts. As the reports said, the parts “were packaged to look like they were made by Ford and other manufacturers.” One report even mentioned that “the falsely branded products did not pose a safety risk to the public because though they may not have met the standards of the original manufacturer, they were still working products.” This however gets lost in the noise. The intended takeaway of these stories is: OE parts good, non OE parts very, very, very bad.

One report quoted officials as saying that “by mislabeling parts, suspects could sell them without going through stringent federal inspection for aftermarket auto equipment.” This claim is at least as bogus as the label on the taxi parts found in the warehouses in Queens and New Jersey. There is no such thing as a stringent federal inspection for aftermarket auto equipment, at least not in America. Sure, there are some very basic performance requirements, but the American system relies on what is called “self certification” where one declares that everything is A-O.K., and nobody checks or inspects until tires disintegrate, hoses burst, brake pads crumble, and people die. We will get into that in another installment of Inside the Industry.

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50 Comments on “Inside The Industry: Busts Of Counterfeit Parts Rings Are Part Of A Much Bigger Sham...”


  • avatar
    CJinSD

    I really enjoy these articles and don’t get excited when you publish something I don’t care for because you do have so much to offer through your experiences. Nonetheless, I fully expect someone to reply here that you are wrong and genuine factory parts are a bargain at 10,000% of their cost.

    • 0 avatar
      highdesertcat

      Amen to Bertel’s experiences.

      And as far as parts go, parts is parts!

      I have had better results with no-name universal alternators Hecho en Mexico by Bosch than I have had with factory-original brand new Delco alternators, just as a for instance.

      Ditto with AC compressors and waterpumps, made in some foreign factory for the store brands like Autozone et al. Relays, cruise control sensors, coolant diverter valves and heater cores, all made by a generic no-name parts manufacturer. They all worked fine.

      Now, when it comes to proprietary parts like AC low-pressure sensors for older GM products, you can’t retrofit one of the new generic larger ones into those applications, so you’re stuck paying $49.95 plus tax for a $5 sensor and molded plastic housing. GM has you by the short hairs.

      I’ve had better running engines with Bosh Platinum spark plugs made in some backwater country than with factory-original Delco-Remy, AC-Delco or Champion plugs.

      And all the fenders, door panels, bumper covers, trunk lids, water pumps, AC compressors, heater cores and whatever I replaced on my own cars and those of friends and family over the years were all generic and non-factory, probably made in China, Mexico or Bulgaria in the case of wheel bearings, brake shoes, pads master cylinders and calipers.

      Parts is parts. If it fits, it’ll work! And the price is right.

  • avatar
    OldandSlow

    NAPA and Pep Boys are in two different leagues. The last time I replaced a timing belt the parts from NAPA were Gates and Dayton made in the US or Canada. Pep Boys nearly half-priced offerings on the other hand were source from Asia and in a white box.

    Several years ago VW sold replacement coil-on-plug units that were of the same shoddy quality as the originals on the car. You were better off buying aftermarket coil units from Accel or MSD, which were less expensive as well.

    That said – I did meet a Passat owner that insisted on buying his Continental tires from the dealer. He seemed oblivious to my stating that VW does not make tires and that Continental was probably the low bid supplier versus Michelin or Pirelli.

    • 0 avatar
      MeaCulpa

      Continental was probably NOT the low bid supplier, they however probably worked tires into some kind of a deal concerning the development of another part as they are quite the powerhouse in the OEM industry. But that aside I get the point of what you’re saying, sometimes dealers push antiquated or bad tires with the “standard issue” argument. Some Volvos came fitted with the worst rubber known to European man – where “all season” is something to look for on a tent and not a tire – the Pirelli P6000s, they’re still available and are still quite pricey and Volvo dealers still push them although newer, better and cheaper tires can be found just about anywhere. The margins on those old black cheese must be astronomical.

    • 0 avatar
      highdesertcat

      Yeah, tires are a different ballgame, though, and it all has to do with ride quality, braking and handling.

      To wit, the Kumho tires on my grand daughter’s Elantra. Great, smooth, cushiony ride, but they wore like pencil erasers. By looking at the tread you could actually see the coarse texture of the scuffing of the rubber tread on the pavement. Like I said, great ride but they don’t last.

      So at first opportunity, when they got to be too thin for MY liking, I had Discount Tire replace the Kumhos with Perelli 9000 T-series.

      A little more feedback through the steering wheel with Perelli tires, and you’ve got to pump them up to 33psi to get the best high-speed ride, but they ride and wear like none other I have ever owned on any of my cars. It’s probably the compound that makes it so.

      BTW, I also replaced the factory original tires of my Tundra recently and decided to go with Michelin, made in the US of A. Ditto with my wife’s Grand Cherokee; put Michelins on that one too, at 25K on the clock. They’re so much better than the Goodyear originals that came with it from the factory.

  • avatar
    claytori

    +1 on inferior OEM parts vs. quality aftermarket parts. If the OEM part failed prematurely, then I look to aftermarket parts. That being said, there is a real problem with knock-off wheel bearings and ball joints from the middle kingdom. They probably have the name brand on the package, but the contents are definitely not the same. One of my co-workers had a wheel bearing replaced that lasted less than a month. A reputable repair shop will know what parts are best, particularly if make -specific (“Indies”).

    • 0 avatar
      AFX

      One of the things with the cheap Chinese parts is that although they might have copied the original design and produced a near identical part to the OEM one they often skimp on the quality of materials. Metallurgy isn’t one of their strong points, and neither is the quality of their plastics. It’s like walking into Harbor Freight and getting a whiff of that cheap plastic, or buying a Chinese screwdriver that breaks off at the tip after a few uses. I thought I’d save a few bucks one time and got Autozone’s cheapest rear brake drum for the Oldsmobile that I had, and wound up with one made in China. The brake drum actually warped after the first few months. I never knew drums could do that, I thought it was only discs that warped. My dad use to swear at the cheap parts and say “That cheap pot metal garbage !”.

      • 0 avatar
        redav

        My company is not in the auto business, but we buy tons of steel. We tried buying steel from China. We gave them the requirements, including the basic methods necessary to achieve them. They sent back the material and the certs showing that they had done everything, and that the material conformed.

        But the certs were forged. They had fake furnace charts, fake photos of the grain structure, fake everything. And that wasn’t just for a single piece; we found the same trend in every forging we checked. They might have worked harder to dodge the system than to simply do what they were supposed to do.

        There is a joke that a man in China wanted to commit suicide, so he ate some rat poison, but he didn’t die, because there was no poison in the rat poison. But to be cautious, they admitted him to the hospital anyway and plugged him into an IV. The man promptly died because there was rat poison in the IV.

        • 0 avatar
          Summicron

          @ redav

          So, did they actually ship some junk steel forgings to your company for testing and you figured out the scam because the results were wildly off spec?

          It’s not just the absolute corruption and fraud, that’s always been present since before “The Days of Shoddy” when American fly-by-nights flooded the Union Army with bogus materiel during the procurement frenzy of the Civil War. But it’s the transcendental scale, speed and complexity with which these scams are conceived and perpetrated that astonishes.

          Chinese corruption introduces a difference of kind, not just degree.

        • 0 avatar
          hreardon

          I’ll echo that, redav. I have several clients in the manufacturing business ranging from auto parts to tunnel boring equipment, oil and gas drilling equipment and medical parts/fittings/couplings.

          In the past year all of them have commented on their frustration dealing with Chinese suppliers who are constantly trying to cut corners. Two of the four now have an employee at the factory on a permanent basis, the other two are actively working to source in the US.

          The take away I have is this: one of my clients has given up on the low end of his market because he cannot compete with the Chinese. That’s the more mass-market product line. He is now focused on the top end of his market because those clients know the low-end Chinese stuff simply is not durable. My other clients are either actively looking to move production back to the US or are quickly reaching the threshold where the headaches and cost associated with China simply are not worth it.

          A trend on the aggregate this is not, but the common thread is that for precision components the cost differential is narrowing to the point where bringing the production back to the US makes sense.

    • 0 avatar
      golden2husky

      Good point that OEM is not always the best choice. OEMs have to be cost conscious and as such they may have compromises built in to save a few bucks. A great example would be Mopar head gaskets from the 2.2 litre days. I would never consider buying the factory gasket when the aftermarket part had engineering built into it that addressed factory weaknesses. Of course it cost more to make, but 20 percent more for me buying one gasket means nothing, but to the OEM buying a few million, it does, at least to the short term thinking of the beancounter….

    • 0 avatar
      Felis Concolor

      A good way to check the part is the direct examination; quality parts will have the mfr’s abbreviation proudly displayed on a non-load-bearing surface, often with the country of origin for complex parts. That grade 8 bolt might have the appropriate number of lines on its top surface, but if there’s no accompanying company identifier, I’ve learned it’s not something you want to trust. If they don’t want you to know who made it, you don’t want to know what it’ll do once it’s a part of your assembly. The close-up examination can also indicate whether the marking is sharp, clear and well defined; if it’s not, then suspect a knockoff part as well, and press for more information regarding the item being supplied.

    • 0 avatar
      Brian P

      I have had the same experience … coincidentally, with parts for a Volkswagen. Rear brake rotors and wheel bearings bought from a parts jobber resulted in failed wheel bearings a few thousand kilometers later. Re-did the job using OEM VW parts from the dealer and then they lasted until I sold the car a couple of years later and were still fine.

      The OEM parts might still have been made in China, but there’s a higher chance of a factory representative watching over what the Chinese are doing and making sure they are doing the right things and not taking short-cuts. You don’t know what you are getting. I know of another common Volkswagen maintenance part in which all of the known worldwide sources, whether VW or aftermarket, are coming off the same machine (which I’ve seen with my own eyes). That’s not always the case, particularly with belts and brake parts and bearings, which are easily copied or substituted.

  • avatar
    Towncar

    I appreciate the attention Mr. Schmitt pays to good grammar and usage, but even Homer nods–”always usually” is a slip.

  • avatar
    wstarvingteacher

    Good article. Thanks for the background.

  • avatar
    AFX

    My old man used to be a GM mechanic, and he worked on cars since the 1940′s. Even way back in the 40′s they had this issue, and he used to call the fake knock-off parts and aftermarket parts “Gypsy parts”. Mostly it was cheaper quality parts from the places like Pepboys, NAPA, or Autozone that were made overseas or in Mexico, but sometimes you’d see parts in fake packaging. I remember seeing fake knock-off AC Delco parts being sold at car shows and flea markets, and also at cheap surplus type discount stores. One of my favorite parts stories of his was that the GM parts catalog would list the same part with different prices depending on whether it was for a Chevy or a Cadillac. Parts mark-ups are a pure gold mine for the manufacturers, and the dealers make more money off of repairing cars than they do selling them. I think GM engineered their cars to last just until their warranties ran out, then they’d make a killing off of their parts and service departments. If they REALLY wanted to make an electric window motor or blower motor that lasted a long time they could, they just didn’t want to. The good thing is that for 40 years my dad was never unemployed working at GM dealerships.

    • 0 avatar
      MBella

      GM licenses AC Delco to aftermarket parts makers as does Bosch. I had an “AC Delco” alternator on my VW for example. So if you buy a Delco part at a parts store it might be just as bad as anything else.

  • avatar
    marmot

    This article is very timely, as i want to replace the starter on my ’99 Lincoln Town Car. Which brand is best please?

    Thanks!

    • 0 avatar
      RS

      I replace the starter on my F150 with the exact Ford part from a local auto recycler (junkyard). It’s been excellent and was less than an aftermarket part.

    • 0 avatar
      Scoutdude

      Your best bet is to go to a local re-builder and have them fix yours. I just needed a starter for my Taurus. Napa for a “rebuilt” unit, which they admit just has some parts replaced $149. My local wrecking yard that has an electrical re-builder who does it while you wait and watch $50. They also had available a 100% new starter for $75 made in you guessed it China.

    • 0 avatar
      MBella

      For starters and alternators I recommend your cheapest local lifetime warranty unit. Anything rebuilt will fail again soon since they only replace what fails at the time. But since starters are usually easy to install the lifetime warranty part is good since it is the last one you will buy.

      P.S. For the panther, get a bunch of wobble extensions and put them together to get to the bolts and nuts on the starter. You need a curve to get to them. This HF one is cheap and decent.
      http://www.harborfreight.com/9-piece-14-in-38-in-12-in-drive-wobble-socket-extensions-67971.html

  • avatar

    If Only one of these animals could get me a five finger discount on a Kenne Bell to replace my Vortec V3.

    LET THE FREE MARKET WORK LOL.

  • avatar
    mitchw

    Strange, when I read about this bust in the NY Post, what struck me was that the fake brakes were working alright. But as Bertel implied, when my Miata specialist recommended KYB shocks over the price point OE parts, I listened.

  • avatar
    olddavid

    Recently I needed a fan motor for the 450. $1100 from Stuttgardt. $125 from XYZ Chinese distribution. At that price point, I will always gamble the knockoff will last more than 10% of the original. I actually mixed and matched the two to get Frankenpart that is doing fine 6 months later. Who comes up with these price numbers? Surely a part for a 38 year old car has been rationalized in the accounting department.

    • 0 avatar
      AFX

      That’s the problem with German luxury cars, the parts prices are so high to replace the broken parts that its not cost effective to own an older or high mileage car. There was an ad I saw for a BMW 750i with a V-12 engine with high mileage that needed a new transmission and it was only selling for $1,500. I looked at that ad and realised the cost to repair the car would be more than it’s re-sale value, then first thing that sprung to mind was “parts car !”. The car would be worth more by stripping it and selling off the good parts.

      • 0 avatar
        olddavid

        Absolutely agree with your comment. Had the car not had a lifetime provenance from a trusted family friend I would have never taken it on. It still frustrates me weekly, but one afternoon drive with the top down on a lonely country road re-affirms my emotional connection while also underlining my fiscal stupidity. And, it is a beautiful rolling sculpture.

  • avatar
    jeffzekas

    Hey Bertel, what about Chinese parts that are NOT as good as OEM? My mechanic was complaining to me, recently, that the brake pads (made in China) that he buys from Bendix are total crap, compared to the pads that were previously made in the U.S.A. So, what do you think? Do you really think that Chinese quality is identical to U.S. or German quality parts?

    • 0 avatar
      Kevin Jaeger

      Unfortunately there’s no real answer to that. China is the wild west these days – you may be getting genuine OEM made in China parts, quality aftermarket parts, shoddy aftermarket, or even catastrophic counterfeit garbage in almost any kind of package – OEM or other brand.

      Eventually the market will mature and we’ll be able to reliably identify who is supplying quality and the junk providers will be put out of business. But that hasn’t happened yet. Made in China by itself doesn’t tell you much.

  • avatar
    steveg35

    The purpose of this article was what exactly, that the taxi parts were equivalent to OE or quality aftermarket parts? I seriously doubt that. You’re right about there being no federal inspection of auto parts, but a mislabeled part represents itself as a quality part backed by the OEM or reputable aftermarket manufacturer, usually with a warranty. Witch hunts for counterfeits like the ones you talk about at Automekanika were common at the US aftermarket show in Vegas back in the ’70s and ’80s, but not recently, and the parts they exposed then were bad news. The OEMs still advertise to professional repairers about their quality and service, but technicians, knowledgeable DIYers and most TTACers know that quality aftermarket parts are as good as or even better than OE in most cases. You buy only from the dealer when an equivalent is not available. The one notable exception is body parts, where non-OE fenders, doors, etc, are ill-fitting trash.

  • avatar
    Kevin Jaeger

    Great article. When I had a problem I used to try to stick with OEM parts first – but so often I’ve walked away from the counter muttering in disbelief “You want HOW much for THAT”?

    If they’d just keep the markup within the realm of sanity I’d stick to OEM parts just for the ease of purchase and peace of mind. But no, they aren’t satisfied with a reasonable premium for an authentic part. Now I do a bunch of research first on who the OEM supplier is and try to buy that brand in the aftermarket. I wouldn’t be doing that if they’d just refrain from absolutely raping me at the counter.

  • avatar
    Big Al from Oz

    I work in the aviation industry and conformance and compliance is paramount in aviation maintenance, just like the impact of bogus parts will play a greater role in the automotive industry as vehicles become more complex.

    All motor vehicle manufacturers have to do is put into place an authority to fit system to ensure compliance on certain safety related items.

    To me a bogus part is differnt from an aftermarket item that is supported by engineering approval. Many aftermarket parts like towbars, tyre/wheels etc have this in place.

    But this is needed to be supported by regulation to ensure compliance.

    • 0 avatar
      wmba

      Agree that the aviation industry has standards. Doesn’t seem to stop the ripoffs, though, because certified parts are sooo expensive there is even more impetus to sell bogus parts with genuine certification. Hell, the USAF has been going on about bogus parts for years, even in brand new aircraft.

      Just google “fake airliner parts”, stand back and weep.

      • 0 avatar
        Big Al from Oz

        @wwmba
        You are correct, but it is then illegal. The system is only as good as the operators within.

        Regulations are good, but the governance of a system is where it will succeed of fail.

        Many developing nations have very similar standards as OECD economies, but they are more corrupt. And you can see the difference.

        Imagine how poorly the aviation industry would be without these measures, even if they are corrupted at times.

        • 0 avatar
          wmba

          Thanks for that reply and the mention of similar regulations but lax enforcement in undeveloped countries. An excellent point. You have crystallized an idea for me about what is going wrong in my country, which is Canada.

          Since 2006, our Conservative government has been cutting federal services to ostensibly save money, and to make us all stand on our own two feet, proud and free. It is a hollow achievement.

          Our vehicle standards are now a pure clone of US standards, with a total of 9 people to do what NHTSA does in the US. Our meat inspection system is rubbish – US border inspectors do our quality inspections for us when we try to export contaminated product. Our Coastguard is reduced to a few outposts thousands of miles from the scene of action. Nobody polices our fraud laws properly. And so on and so on, in almost every facet of our daily lives. We operate a cut-rate, sham system with no pride, but a mountain of poor excuses and a level of service that is of laughably low standards. Our tax authorities are the only well-funded government apparatus. Of course.

          The conservative US commenters on this and other forums railing at government spending have no idea how well they are protected compared to the crap we deal with in Canada. They take for granted what we do not have. We are gradually losing our pride.

          It’s all quite enervating. I applaud Australia for ANCAP and other systems which are yours and yours alone. You stand on your own two feet far better than we do. Perhaps because you are not the mouse sleeping next door to an elephant.

          At least so far, our aviation safety investigators still seem to be funded. As someone in that industry, perhaps you know better. Nothing would surprise me at this point.

          • 0 avatar
            Big Al from Oz

            @wmba
            Regulations and standards are only as good as the system, the detection and correction of shortfalls in standards is what makes them reliable and worthy.

            In Austrlia most of our standards align to the Europeans. But we also see the shortfalls of standards and adopt our own.

            ANCAP and ENCAP are very similar. I would like to see better testing for crash worthiness of vehicles.

            Our emission standards (currently but not for much longer) use a mix of US and Euro standards. The US standards prop up petrol engines and the Euro, diesel.’

            And diesel is winning and its not because the of the cost of fuel. We pay the equivalent of Canadians for petrol approximately 3.5% of weekly earnings.

            The US and Canada are the only OECD economies who haven’t adopted the UNECE, which has a lot to do with design regulations. This is to protect the US market. Other than the Japaanese a big chunk of the world will adopt Euro VI.

            US safety standards are much lower than the rest of the world. Just look at the fatality data for the US compared to the rest of the UNECE (OECD economies). Double the fatality rate as most Western Euro countries and Australia.

            The US diverged from the world in the 50s and now it is very different. The rest of the world is even using the metric system.

            The US doesn’t have the clout to try and force itself to be unique in all areas of trade for much longer. It will cost industry more as time goes on.

            Hopefully the Canadians’ see this and start to do what the rest of us do. But the changes will have to be incremental.

            It’s not a anti US comment, it reality.

        • 0 avatar
          Big Al from Oz

          I made an error with my acronyms. The World Forum for Harmonisation of Vehicle Regulations is a division of the UNECE.

          Sorry.

          http://en.wikipedia.org/wiki/World_Forum_for_Harmonization_of_Vehicle_Regulations

  • avatar
    MRF 95 T-Bird

    I always try to buy name brand or from the manufacturer. Once I bought an ignition module for my 87 T-Bird 3.8 v6 from JC Whitney. It was very reasonably priced and I figured I’d keep a spare around since they did have a propensity to go bad since they are mounted on the side of the distributor and can get warm subjecting them to premature failure. When I received it in the mail it was packaged in a Motorcraft looking box with made in Korea stamped on it. The module was exactly the same except it did not have Motorcraft moulded into the hard plastic housing. When the original Motorcraft module finally gave up it’s ghost I replaced it with the JC Whitney knockoff. It lasted for a couple of years till it stopped working when I went for the genuine Motorcraft and never had an issue with it for several years.

  • avatar
    wmba

    Another good article.

    Can’t remember the source, but I read that the third, unknown source of ripoffs from the manufacturer comes about this way:

    A particular car model has been out of production for 4 or 5 years, say, and for whatever reason, the manufacturer has run out of an OE part. They aren’t going to drag out the old tooling, set it up and run the 500 total parts they think they’re going to need before all those cars are scrapped.

    The light bulb turns on, and the manufacturer himself goes to the aftermarket, buys 500 parts, receives them and boxes them up in his own pretty packaging.

    Seen it with Subaru brake rotors myself. Aftermarket crap in genyooine manufacturer box – original part, not available. Really makes you wonder about replacement sheet metal, and the usual excuse for paying for “original” fit.

    I’m not impressed, but what are you going to do?

    • 0 avatar
      Kevin Jaeger

      That is indeed another giant scam most people don’t realize. If you go to the dealer to make sure you are getting a genyooine OEM part for your fine Japanese or German made marque you probably think you’re getting the same parts it came from the factory with (or an updated one, if it has been redesigned). Not so.

      They absolutely DO source regional aftermarket parts and stick them in OEM packages. Your Mazda have come from Hiroshima with a Tokyo Roki oil filter and it was very good. So you go to the dealer and ask for an oil filter and what do you get? Well that depends on what country you’re in when you buy it. Right now in Canada we appear to get cheap Fram filters. Almost anything aftermarket is better.

      Similar story for batteries, brakes, etc, etc. Yeah, they presumably meet some kind of spec. But so does the majority of the aftermarket.

      • 0 avatar
        MBella

        Many parts work like this especially for imported cars. It’s easier to buy oil filters or batteries from an American supplier than to have to import the OE. Batteries are a big one. I wanted my friend to buy the OE Panasonic battery for his Subaru but all the dealer had was an Exide with a big Subaru logo on the front.

  • avatar
    05lgt

    The only story I’d rather find than an “Inside the Industry” would be the restarting of “The Autobiography of BS”. Your insight and observations about automotive propaganda are unmatched anywhere I can find to read.

  • avatar
    Dave M.

    Great article Bertel!

  • avatar
    ravenchris

    Genuine TTAC.
    Thank you, Mr. Schmitt.

  • avatar

    I was recently talking with a customer who used to run a German auto part manf. It was very enlightening. So here is how he laid it out Sell the OEM the part for their production run very little profit but make it up later. In his example sell a part he makes for $3.45, the OEM pays $4.00. Not much money there (well they do sell 100k plus a year. Than the OEM parts dept orders the part for repairs (different contract different purchasing dept.) and the builder charges $8.00 for the part. The OEM sells it to the dealer for over $20.00 and the dealer charges $80.00. Now heres the fun part after a couple of years they were allowed to sell the parts to the aftermarket In this case they would sell the part for $15.00 And after coming down the line with reasonable markups the aftermarket piece ends up selling for less than $40.00. The customer told me they could keep the OEM happy by selling them the part cheap knowing the would have all the tooling to make a big profit later.

    • 0 avatar
      Scoutdude

      It works that way for a lot of parts.

      Decades ago I had a customer with an Acura that needed a slave cyl. Dealer was something like $120 “wholesale”, couldn’t find it in a couple of aftermarket brands until I called a wholesaler that only handled parts for imported cars. It was about $60. Got the part and once I had the factory part out I did a quick comparison and the 2 parts had the same casting number and paint dabs in the exact same location and color.

      Even longer ago I did the brake pads on my family’s Toyota Van the parts than came in the Bendix box had been purchased from the people who Toyota had purchased them from because again they had the exact same stampings/markings and the price was also near half.

  • avatar
    shaker

    Enlightening, and disturbing at the same time.

    Good “food for thought”, Bertel.

    As always, “Caveat Emptor”.

    Kudos to the B&B as well, for the additional experiences.

  • avatar
    skor

    Crazy Henry said that he would give the Model T away for free if he could have a monopoly on replacement parts. Phat parts profits are nothing new.

    As for generic parts, I’ve had mostly good luck. Years ago it was more a hit or miss deal, today most of the “generic” stuff is made in the same factories, using the same materials, as the OE parts. Don’t be a sucker.

    • 0 avatar
      highdesertcat

      Hence the built-in obsolescence and need for replacement parts that ensued for decades throughout the US auto industry until just recently.

      Well, at least until the foreigners brought us better quality, greater longevity, and lasting durability in their vehicles.

      The rest is history, leading up to the kaputness of GM and Chrysler in 2009.

  • avatar
    bunkie

    While I agree that parts markups are obscene, there is a difference between parts made for assembly into vehicles and those intended for repairs and that is the time between manufacture and sale. Parts demand for repair and replacement tends to be highly variable and that results in lots of money tied up in on-the-shelf inventory. That costs money. There’s also the issue that it’s an imprecise science to match parts production numbers with ultimate demand which often results in a certain percentage of those parts being unsold.

    Back in the 1970s I worked for a shop that repaired Dual turntables. One day, I decided to see how much it would cost to build a model 1225 from parts and I stopped when I got to over $700 (new, a 1225 could be had for about $85) with many parts to go. There was also a famous insurance company ad that did the same thing with a Plymouth Satellite.


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