Consumers, Auto Makers Collide Over Smog Repairs

Consumer groups and auto makers are headed for a showdown in Sacramento over the lucrative business of repairing auto emissions-control systems.

As it stands, manufacturers and their authorized dealers have a virtual lock on such repairs on vehicles made since 1996, which have complex diagnostic systems.

But a bill that cleared the California Senate last summer and is now in the Assembly would force the auto industry to unlock the systems’ mysteries, opening the door for competitors.

Consumer groups, who staged a protest over the issue Monday at the Los Angeles Auto Show, claim that the aftermarket repair industry is being shut out of business that will cost it $49 billion in revenue through 2008--projections auto makers and dealers dispute.

If the California measure passes, it would be the first of its kind in the nation and would probably face an immediate legal challenge based on intellectual property laws. A similar bill failed last year in Arizona.

Auto makers and their aftermarket competitors--which include parts manufacturers, distributors and retailers, as well as repair shops--have wrangled about information-sharing for years. But the issue has new urgency because manufacturers’ warranties are to expire on many 1996 models, the first required by the California Air Resources Board to have updated emissions diagnostic systems.

California consumer groups say vehicle owners’ overall repair bills will go up 4% a year, plus inflation, if dealers have no competition on emissions-related repairs or parts.

“Consumers should have a choice, especially if they’re not happy with the dealer’s service,” said Cher McIntyre, advocacy director for Consumer Action. “The monopoly drives up the price of repairs.”

Auto makers and dealers say they have no problem sharing tool, training or service information, but they argue they should not have to part with proprietary part designs.

“That would be the equivalent of making Coke hand over its formula,” said Steven Douglas, director of environmental affairs for the Alliance of International Automobile Manufacturers.

Auto makers depict the California bill, which awaits action by the Assembly’s transportation committee, as a bid for regulatory charity by an aftermarket industry that can no longer keep up with technology.

Ordinarily, local shops scoop up 70% of the post-warranty repair work. They can charge automobile owners less and still make a profit partially because they use cheaper replacement parts from alternative sources, operators said Monday.

But as emissions systems have become more sophisticated--driven partly by tougher environmental regulations and government-mandated anti-tampering codes--independent parts makers have encountered more barriers in reverse-engineering components.

“Used to be we could build a part and test it fairly easily,” said Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Assn. “Now we need to know the interface information between the part and the computer.”

Auto makers countered that they should not be required to make business easier for their competitors.

“They simply want us to hand over the information instead of working for it,” said Kris Kiser, the auto alliance’s vice president for state affairs.

Without auto makers’ inside information, the aftermarket industry says the sources for emissions-related parts will shrink to one.

“If I have no other choice but to buy parts from the dealer, then I am stuck with whatever the dealer wants to charge,” said Jack Heyler, diagnostics consultant for the Automotive Service Councils of California, a trade group for independent repair shops. “I can’t compete.”

That would be bad news for consumers, advocacy groups said. The same repairs cost at least 20% more at a dealer than at an independent repair shop, they said.

“You will be held captive to the auto dealers and manufacturers,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento nonprofit group, as she stood in front of about 30 sign-waving protesters Monday.