You Thought That Car Was Expensive? Wait Until You Get Fleeced By The Shop
Selling overpriced “Original” parts can be like printing money. I know carmakers that generate 30 percent of their profits out of parts sales. How do you drive parts sales? By forcing customers to stay as long as possible with your dealer, a money pit the customer tries to flee as early and as quickly as possible. The golden fleece in the business are repairs only an authorized dealer can perform, using overpriced parts only the authorized dealer has. Countless attempts have been made to break this monopoly. Another attempt is on the way.
For decades, there has been a cat and mouse game between manufacturers and the law. In the U.S. and in Europe, repair information must be made available to independents. But there is always some special information for authorized dealers only. The computerization of cars swung the pendulum towards auto manufacturers and their dealers. Why does a car key sometimes cost hundreds of dollars? Because it can.
OEMs face off with independent workshops, and especially with parts suppliers. Suppliers typically don’t make much money selling part to OEMs, but make a lot selling to independents, even at prices much lower than those of OEMs. Mark-ups between 10 and 100 times the ex-factory cost are not unheard of.
The European automotive supplier body CLEPA is tired of playing cat and mouse with manufacturers. CLEPA says will take at least one carmaker to court if manufacturers continue to withhold repair and maintenance information, Just-Auto writes.
Said CLEPA’s outgoing CEO Lars Holmqvist:
“We have come to the point where we are fed up. We have talked to the carmakers for one year and we have not reached an agreement which is satisfactory. When you buy a car you just don’t borrow it – you should have all the necessary information.”
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Comments
Join the conversation
The war over who gets to supply replacement parts is as old as the car. During the early days of the US auto industry, there was a court case about just that. The courts ruled that it was OK for independent parts suppliers to provide replacement parts. The auto companies were not happy since OEM parts biz was incredibly lucrative. Henry Ford stated that he would give away his cars if he could get a monopoly on supplying replacement parts.
GSLIPPY...I brought up the Skyactive because YOU called it rubbish, and outside of the numbers, you havent even driven the car. Are we drivers, or are we armchair automotive critics? Of course doing the job yourself--provided it is successful-- would be less expensive than paying anybody to do the work. That is a given. But all too often owners--even technicians--make the mistake of getting into the "Get a code, get a part" diagnostic method. Yours worked out..but let's say that P0340/345 code wasnt repaired after replacing the part. As an engineer with your experience, you could probably trace it down. But how many others could? You might work on your car(s), friends, others at times. Try doing this 8 hours a day from 3 to 10 cars a day, and we have to prove the part is bad before we replace it, and if it doesnt fix the issue, we take the part off, and re-diagnose at no cost to the customer. Our goal is customer satisfaction and "Fix It Right The First Time" My point is that there are 2 sides to every story, and the drift of this thread is that dealerships are "stealerships". Dont paint us all with the same brush regardless of your personal experiences. As one who takes pride in my profession, I respond in kind to those that denigrate it. I apologize for my "tone" in my posts. Terry