responds to manufacturer attacks on recycled parts
At their annual meeting of members in Austin,
Texas, the Automotive Recyclers Association (ARA) announced that
the organization has issued a formal complaint letter with the
Federal Trade Commission (FTC) against two car manufacturers,
Hyundai Motor America and American Honda. Both companies have
released statements that warn against the use of recycled auto
parts, and indicate that their use will void vehicle warranties
issued by the companies. In the letter ARA said the statements
made recently by these two companies and their threatened warranty
refusals could be violations of the Magnuson-Moss Act.
Use of these recycled parts, a 22 billion dollar industry, has
been widely accepted for decades and there is a very long track
record of their successful use. Recycled parts are original equipment
manufacturer (OEM) parts. They are fully functional and are in
many cases identical to the original parts Hyundai Motor America
and American Honda are requiring. Recycled parts were new OEM
parts at some point, yet both Hyundai Motor America and American
Honda are calling for the use of their own new parts in repairs.
“Neither manufacturer has provided any evidence that parts unaffected
by an accident become inadequate once reused, which begs the
question why their use is not supported by either company,” ARA’s
chief executive officer Michael E. Wilson stated in his appeal
to the FTC. “Following the logic held by these companies, as
soon as a new Hyundai, Honda or Acura drives off the lot, its
parts are unsuitable for use as replacement parts in another
vehicle, implying that the parts are unfit for use as soon as
the car drives off the lot.”
In addition, recycled parts have several additional benefits
compared to new parts:
- Recycled parts allow consumers to save on costs while using
parts identical to new OEM parts.
- Recycled parts are much better for the environment, since
no additional resources or energy were used to create an unnecessary
new replacement part.
- Auto recyclers provide warranties on any recycled part
used in a repair, indicating that recycled parts are not used
in an attempt to cut corners with customers.
“We believe the statements made by Hyundai Motor America and
America Honda are part of a concerted effort among automobile
manufacturers to limit competition in the automotive parts market
to try to limit their competition,” said Wilson.
According to the most recent Mitchell Repair Collision Data,
new OEM parts accounted for 67.9 percent of all parts used in
repairs, which represented a decline from previous quarters.
In the second quarter of 2008, new OEM parts accounted for 74.4
percent of all parts used in repairs. Much of this decline can
be explained by consumers and the collision repair industry becoming
better educated about quality part alternatives, such as recycled
OEM parts. As automobile manufacturers watch their large market
shares shrink from legitimate competition, they become concerned
about loss of profit. “We believe that many, if not most manufacturers
are attempting to maintain their market power through inappropriate
restrictive activities including issuing statements that their
warranties will not cover the use of recycled parts,” said Wilson.