Battle for Replacement Auto Parts Market Heats Up : Legislation: New West Virginia law requires use of car-maker-provided materials for repairs. They are more expensive than aftermarket supplies.
Most auto parts shops in West Virginia never saw it coming: Suddenly, the Legislature blacklisted many of the bumpers, fenders, hoods and doors in their garages.
A new state law similar to one in Rhode Island requires auto repair shops to use factory parts to fix the body of newer vehicles, effectively limiting the market for less expensive imitation parts carried by many shops.
Insurers and consumer advocates view the local laws as an unfair attempt by auto makers to squeeze the competition out of the lucrative crash parts market through legislation in individual states after failing in Congress.
“It appears that the car makers now are going state to state in an effort to protect their monopoly,” said Jack Gillis, executive director of the Certified Auto Parts Assn. and an official with the National Consumer Federation.
Auto makers have long been pushing to curb the market for aftermarket parts. In 1991, they pushed a bill in Congress that would have effectively outlawed imitation parts. But the bill, which would have protected patents on auto body parts, died in the House Judiciary Committee.
At stake is an estimated $11-billion annual business, which insurers and consumer advocates have accused the automobile industry of trying to monopolize by stifling competition from cheaper parts.
For example, a manufacturer’s replacement fender for a 1991 Cutlass Supreme is priced at $262 in the Mitchell Collision Estimating Guide, which lists industry standards. The guide lists aftermarket fenders for $159.95.
The gap is wider for a hood on the 1995 Pontiac Grand Prix. The manufacturer’s replacement lists for $1,269, but an aftermarket hood without the decorative louvers made by Pontiac lists for $377.
Auto insurers and consumer advocates are outraged by the restrictions on the use of aftermarket parts. They say such laws will only drive up insurance costs and ultimately result in higher premiums for car owners.
“These laws are anti-competitive and don’t do the consumer any good at all,” said John Eager, director of claims at the National Assn. of Independent Insurers in Des Plaines, Ill.
But the auto industry argues that issue is a matter of safety--not money. They say factory parts are stronger and safer than the cheaper aftermarket brands.
They also argue that the legislation is a way to overcome a practice by some insurers of encouraging or requiring repair shops to use the cheaper parts.
“We have always held that consumers have the right to decide the source of crash parts that will be used to repair their vehicles,” said George E. Gilbert, crash parts manager of the Ford Customer Service Division in Detroit.
The West Virginia law, which quietly glided through the Legislature, requires repair shops to use manufacturer’s parts on any vehicle up to three years old unless the owner requests otherwise.
“It cuts out three years of business,” said Bob Dickers, a crash parts dealer in nearby St. Albans. Dickers said he didn’t know about the bill until shortly before it became law.
The 1994 Rhode Island law applies to cars up to 30 months old. Numerous other states have less stringent requirements on the use of aftermarket parts.
The main sponsor of the West Virginia bill was state Sen. Joe Manchin (D-Marion), whose 1996 gubernatorial campaign has received at least $11,000 from car dealers.
Although some aftermarket dealers concede that most of their business comes from older cars, they still oppose any legislation restricting shop repairs. Some argue that consumers should have a choice
“The restrictions should be spelled out in the insurance policy so the consumers know what they’re getting,” said Gary Murdock, president of the Ohio Valley Automotive Aftermarket Assn. in Hilliard, Ohio.
It is unclear what impact laws such as West Virginia’s will have on insurance rates.
The insurance industry says the impact is less severe in smaller states like West Virginia or Rhode Island where there are relatively few drivers.
