The Looming Threat
For more than 60 years, American consumers have benefited from the availability of quality, lower-cost alternative auto repair parts for their damaged vehicles. On average, competition in the collision parts industry saves consumers approximately $1.5 billion a year. But car companies are trying to block competition. They are getting and enforcing design patents against the alternative collision parts industry – at the expense of consumers and businesses. If they succeed, American car owners will be left with very limited options and added costs and insurance premiums when repairing their vehicles.
Major car companies are creating a monopoly on collision parts.
- Major car companies already control more than 72% of the collision parts market.
- The number of design patents granted to them on crash parts has increased dramatically since the 1990s and has more than doubled since 2005.
- They hold hundreds of design patents on collision parts for all sorts of car makes and models.
- Ford temporarily effectively eliminated competition for seven 2004 F-150 collision parts by enforcing design patents through a complaint at the International Trade Commission (ITC).
- In May 2008, Ford initiated design patent enforcement action at the ITC for the 2005 Mustang.
- If this trend continues, competition in the collision parts industry will cease to exist.
A key part of the automotive parts industry is at risk.
- For more than 60 years, the alternative collision parts industry has been offering quality alternative parts to consumers, typically 26-50% less expensive than car company repair parts.
- The alternative collision parts industry employs tens of thousands of American workers in cities and small towns across the country – from manufacturing to distribution to repair.
- This industry has operations/distribution in all 50 states.
- Quality alternative collision parts are available at more than 40,000 body shops nationwide.
Loss of competition will hurt consumers most of all.
- Roughly 13% of consumers pay collision repair costs out of pocket. With increased costs they may be forced to forgo repairing their vehicles, leading insurers to declare more damaged vehicles as “total wrecks.” Older and lower-income Americans will be disproportionally affected.