Automakers seek monopoly on repair parts
According to an international trade watchdog, the Association of Automotive Recyclers (ARA), automakers Honda and Hyundai recently provided their repair shops with guidance telling customers not to use recycled auto parts. According to the ARA, these automakers claim that recycled or used components will void vehicle warranties.
Recycled auto parts have been widely used for decades without any challenge to the quality or reliability of these parts that should affect warranty work. An irony of this recent policy change is that the recycled Honda or Hyundai parts were manufactured by Honda or Hyundai in their own factories.
Parts made by the same company that produced the original vehicle are called original equipment manufacturer (OEM) repair parts in the automotive business. Salvage industry recyclers collect OEM parts from salvaged vehicles and offer them for sale to repair shops and consumers at an average savings of 60% on new OEM parts and an average savings of 30% on other recently purchased aftermarket parts. manufactured. Also, those recycled parts aren’t of the aftermarket variety; they are simply OEM parts that are reused after the donor vehicle is taken out of service.
So if recycled parts come from the OEM, reduce landfill volume by reusing automotive components destined for landfill, and are cheaper for the customer, why are Honda and Hyundai warning against their use?
The most likely reason is, of course, that car sales are down due to the continuing slowdown in the economy. Automakers are looking to grow their OEM repair parts business with a strong arm wave against their customers. This leaves many consumers without the option of using recycled parts if they are faced with a voided warranty.
For its part, the ARA filed an official letter of complaint with the Federal Trade Commission saying the automakers’ actions contradict the Magnuson-Moss Act of 1975, which was enacted to simplify warranties.
Most consumers do not drive vehicles that are still under factory warranty and will not be affected by this move.
Still, it presents an interesting data point that large, profitable automakers are putting financial pressure on their customers at a time when many consumers are wary of big business following the 2008 and 2009 bailouts.