Quality, Replacement Parts Offer Big Savings in Tough Economic Times
Quality Parts Coalition Urges Congress to Endorse Legislation to Save Consumers, Industry Billions

LAS VEGAS – As the International Autobody Congress and Exposition (NACE) continues, participants, ranging from autobody repairers to distributors and manufacturers, remain concerned about how the nation’s economic instability will impact their business. Frightened by tumbling stock prices and an increase in home foreclosures, consumers are delaying – and sometimes forgoing – much-needed repairs on their vehicles. The Quality Parts Coalition (QPC), an advocate for legislation that would save consumers billions and guarantee the livelihood of the aftermarket, today drew attention to the potential impact of a car company monopoly on the crash parts industry.

For 60 years, consumers have benefited from the presence of low-cost, high-quality, alternative crash parts. One study by Microeconomic Consulting & Research Associates, Inc. (MiCRA) concludes that consumers benefit in two ways from the existence of competition in the replacement collision parts market. First, when there is direct competition between a car company part and a high quality alternative part, the cost of the quality alternative part is considerably less. Second, the existence of competition in the marketplace causes the car company part to be more readily available at a lower cost than parts without competition. This conclusion is validated by a price comparison between car company parts for the 2005 Ford Mustang and the alternative equivalent. For instance, a rear bumper fascia for the base model from a car company costs $264.65, while its quality, alternative equivalent is only $175.00, or 34 percent less. On average, prices of car company parts have been reduced by about 8 percent due to competition, or by about $18 per part. For the 13 percent of repair shop customers who pay collision repair costs out-of-pocket, this enormous savings could be applied to mortgage payments, gas or even meals.

In fact, a July 2008 announcement by a major car company that it would lower prices to compete with the aftermarket underscores how the presence of a competitor drives down prices, making collision replacement parts more affordable for consumers.

However, in recent years, the number of design patents awarded to major car companies has soared, giving them the ability to corner the market on the parts consumers need after even the slightest of fender-benders. As the number of design patents climbs, so will the price of those parts. The insurance industry estimates the rise in costs and “total losses” could require $1 billion or more each year to be passed on to consumers in the form of higher insurance premiums.

“After lawmakers refused to grant the major car companies carte blanche in the repair market in the 1990s, the car companies shifted their strategy to using the forum of the International Trade Commission (ITC) to gain a monopoly on the collision repair parts,” said Eileen A. Sottile, executive director of the Quality Parts Coalition.

“A Section 337 complaint at the ITC against manufacturers and U.S. distributors of automotive collision repair parts threatens to curb consumer access to certain exterior repair parts for the 2005 Ford Mustang,” continued Sottile. “This complaint follows on the heels of another ruling which made it impossible for the nearly 2 million Ford F-150 drivers on America’s roads to find quality, replacement parts for their 2004, 2005, 2006 and 2007 F-150s. Congress is eyeing a bailout for the car companies, but isn’t it time to give the consumer a break?”

Fortunately, there is a permanent, legislative solution available. Introduced in March 2008 by Rep. Zoe Lofgren (D-Calif.), H.R. 5638 would keep prices fair and the automotive collision parts marketplace free by adding a “repair clause” to United States design patent law. Adopting H.R. 5638 would bring the United States in line with a number of pro-consumer countries, including Australia and the U.K.

“Main Street Americans are already reassessing their expenditures and slashing their spending to save during this economic crisis. Unless Congress intervenes and stops this potential car company monopoly on crash parts, millions of consumers may be forced to forgo the necessary repairs that keep their cars running,” concluded Eileen A. Sottile.

For additional information, please visit www.qualitypartscoalition.com.

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The Quality Parts Coalition represents the interests of the independent parts industry, repairers, insurers, consumers and seniors. It is the goal of the Quality Parts Coalition to develop and secure a permanent legislative change to U.S. design patent law to preserve competition and to protect the consumer’s right to benefit from quality, lower-cost alternative replacement parts.