in the old days the auto manufacturer had a captive market
for his products and services but pirate parts changed all that.
In the 80s and earlier the national parts manager was king;
he/she generated over 75% of the manufacturers' profit.
In the 1980s the supply chain broadned to at least 2
suppliers with another in the wings in case one of the two
preferred suppliers fell over. Add to this 'just in time" supply
and the whole system became more competitive and
efficient.
Enter Taiwan and third world countries into the supply chain and
some of the established suppliers were dropped in favour of the cheaper
suppliers. This left vacant factories and skilled workers virtually idle
and rather than close down they launched the pirate parts (will fit)
supply system.
Add to theis the ACCC ruling that warranty services can be done by experienced repairers
provided they used propriety parts. This slackened the manufacturer's grip on the service/parts customer.
Once out of warranty the owner is likely to opt for the "will fit" part rather than pay up to 1005 premium for
the branded part.
Among other things, this has seen extentions to warranty and hence the use of propriety parts.
Recently KIA has introduced a 7 year warranty which is pushing the envelope towards the life of vehicle.
So. in summary, the old marketing mix of sales, service ,spare parts & accessories , warranty and manufacturers' F&I
is being tipped upsidedown. Recently in China western auto manufacturers have been fined heavily
for spare parts price gouging. The biggies such as GM, Ford & Chrysler are certainly experiencing
financial strain because their laying hen (spare parts) is undergoing extreme pirate parts competition
so much so that GM earlier in the year had to resort to Chapter 11 following a massive compulsory
vehicle recall.
Perhaps Western Governments will impose the same recall requirements on pirate parts manufacturers
as they do on OEMs?
