China's recently instigated push to go after price fixing and monopolistic practices in the automotive sector has garnered a lot of ink, but regulatory bodies around the world have been tackling the issue for years. Lithium-ion battery makers were targeted in 2012, the US Department of Justice hit a cabal of Japanese suppliers for $740M in 2013 and Toyo Tires after that, the EU went after exhaust parts makers earlier this year. Nor are the investigations confined to the auto industry: aluminum purchasers like Coca-Cola sued banks over reducing supply to drive up prices and railway company Deutsche Bahn is suing US airlines over cargo prices.

Automaker execs speaking to Reuters say that price-fixing isn't new and that, while Japanese companies have been taking huge public hits, "that's not the exception, but the typical business condition we deal with routinely around the world." In Singapore, such collusion among parts makers was so structured and refined that they collectively called it the Market Share and Profit Protection Initiative. And wherever it's been practiced, it's worked – the Reuters report notes that parts suppliers not only keep prices high for the manufacturers, they then charge up to ten times more for replacement parts - the exact same parts - for dealer service centers and repair shops. That's given some suppliers better profit margins than the automakers they supply.

What everyone is waiting to see is whether the investigations and fines will lead the suppliers to change their business models, swapping conspiracy for "low cost and high quality" via leaner production processes.


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    • 1 Second Ago
  • 22 Comments
      Mike M
      • 3 Months Ago

      How about investigating gas price fixing?

      jebibudala
      • 3 Months Ago

      The government just wants more money is all.  It's not like the fines go to the consumers.  It gets redistributed to social programs and special interest (corporate friends of the politicians).

        Randy915
        • 3 Months Ago
        @jebibudala

        I would think the majority goes to meeting debt obligations (interest payments) on all the money they've borrowed.  Some say by 2016 the US govt will be paying over $1 trillion/yr just to interest, the collapse will be spectacular.

      Zeus
      • 3 Months Ago

      Because if we can trust anyone to talk about what's right, it's Eric Holder. He probably colored the chart in himself. 

      Look Mom! I stayed in the lines! 

      churchmotor
      • 3 Months Ago

      Eric Holder is mad because he can't figure out how to illegally sell auto parts to the Mexican Drug cartel.

      scott3
      • 3 Months Ago

      The sad part is once the government is done the parts will be more difficult o find and will cost more than they are now.  

      Jerry Teets
      • 3 Months Ago

      Should it be a surprise that companies pricing out the exact same parts with the exact same designs in the exact same quantities using the exact same processes and materials should come up with similar prices?  I'm sure there are instances of collusion, but I don't believe as much as many people think.

      As far as the markup on service parts, companies start up producing tens or hundreds of thousands (or even millions) of parts per year, packaged in bulk reusable containers, shipped directly to a single assembly point.  At the end of the vehicle production, they are expected to produce the same parts in quantities of 50 or 100 or so, at the same quality, from materials that now must be special ordered in small quantities, setting up production tooling for an hour's worth of production.  Then individually packaged into retail packaging and sent to a distribution point or individually to the repair shops.  Is it any wonder the parts are more expensive?  They certainly cost considerably more to make.

      No, not all companies are innocent, nor all executives.  But many instances are not quite as ominous as it may appear.

        WindsWilling
        • 3 Months Ago
        @Jerry Teets

        Time to start looking for a new job once they sue your employer into the ground.  Sure the "batching" and "retooling" is a known quantity, but not for the absurd prices they charge.  It's proven how rich people got from this over the years.  They need fines, and those knowingly involved need to get breakfast on a metal plate for 5-10 years with assets seized.

      OptimusPrimeRib
      • 3 Months Ago

      Screw fines only. These corporate execs need hard jail time to set an example. Too bad big money runs the country. Gotta love capitalism.

      mbukukanyau
      • 3 Months Ago

      someone should sue the US government and California for stifling us on oil taxes. 

      jich8chy3chah8wurt2thuk3ghy7ly

      ebay, and places like 1AAuto sell parts at what they SHOULD BE.

      I repaired a wrecked Accord for about $130 in ebay/1AAuto parts. OEM would have been sky high. evan pick a part.


      Got window actuator (electric window uppy/downy thing) for $35. Primer'ed fender for $40. Headlamp assembly WITH BULBS for $35 or so.


      So, cheap parts are out there. And for 15 year old cars, likely they will suffice. 

        thrutheeyesofbry
        • 3 Months Ago
        @jich8chy3chah8wurt2thuk3ghy7ly

        I work for a dealer. I know markup is ridiculous. But some parts need to be replaced with OEM. I said no way for a $300 window regulator for my 99 Civic when the local parts store had it for $50. 

        But I've seen customers come in where they did the parts repair themselves or somewhere else and the installation was fine, the generic parts caused more issues than it fixed. Seen multiple times where a new alternator brings the bus signal down and the engine idles like it has a vacuum leak and the screams the engine is overheating cause the electric coolant pump is on the same bus. Everything was installed correctly and should work but it doesn't always. Tossed in an OEM alternator and car ran fine. 

          thrutheeyesofbry
          • 3 Months Ago
          @thrutheeyesofbry

          @BahamaTodd

          Good words to live by. In the end, you almost always get what you pay for. 

          Even if you do a job yourself, doing it twice isn't worth the $20 saved from buying a cheaper part. My free time is worth a lot more than that. 

          Neez
          • 3 Months Ago
          @thrutheeyesofbry

          True True,  my throw out bearing went out in my 2008 impreza, most likely my fault at 100k miles because i like to hold in the clutch at stop lights.  

          But i took it to a shop to replace because i didn't have the tools and didn't have the time (having a newborn son), and was tired and exhausted from lack of sleep with a newborn, i decided it was just best to have a shop do it.  They installed a new clutch, quill sleeve and new bearing.  From day 1 it was crap, and when the vehicle drove for about 30-40 minutes, the clutch would chatter like crazy.  Hills were annoying as it would jump and chatter all the time.  I took it back, they redid the work.  But it was still crap, they kept blaming me, blah blah blah.  So after a year of a chattering peice of crap clutch.  I bought a transmission jack, longer jack stands, axle puller and a few other misc tools.  Did the work myself and replaced the clutch with an Exedy clutch(OEM subaru supplier).  I discovered the clutch inside the vehicle had "made in china" written on it.  The shop gave me some crap quality clutch, and after it heated up the clutch material itself would chatter with the flywheel.  

          Since i've replaced the clutch with an exedy, my car drives like the day i bought it, runs perfect.  

        bK
        • 3 Months Ago
        @jich8chy3chah8wurt2thuk3ghy7ly

        No way, OEMs are expensive but buying cheap replicated parts from china aka ebay parts, is never safe. 

      TwoBits
      • 3 Months Ago

      Is that the Huxtable grandpa?

      churchmotor
      • 3 Months Ago

      Wow, Eric sure jumped all over the "HOLLYWOOD STARS" nude photos scandal rather quickly.  Only hours later.


      Oddly, he still has not investigated the "Fast and Furious" or the VA problems, the IRS scandal, AP phone tapping, phone tapping Senator Fienstein . . .

        churchmotor
        • 3 Months Ago
        @churchmotor

        And of course, Benghazi.  But in the words of Hitlary, "What difference does it make" that people died under my watch.

      Bernard
      • 3 Months Ago

      Price those parts to high and you might as well 3D print it.

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