Cost of Automotive Parts

The dealer is required to stock parts for any vehicles they produce for 10 years....They only make a certain amount of spares then break down for retooling....as supplies start to dwindle the price goes up,,,and up....and up, until the part costs more than is practical thus preserving inventory and compliance....

Overhead.

Inventory.

Dealerships have many more thousands of square feet of warehouse than your aftermarket suppliers.

Overhead.

Inventory.

Greed.

Opportunism.

The marketplace runs on the " Bigger Fool " theory. In the food chain, the bigger fish gobble up the smaller fish. There is a similar smartness hierarchy in the marketplace. If you add up the individual cost of spare parts required to assemble a vehicle, most often you will end up with a figure 3x to 5x of the vehicle cost itself. And many of the parts wont be listed too.

Here, in the USA, we don't call it greed. It's called capitalism. It means the same thing.

Storage space costs money. There's a mean tax on inventory every damn year. Shipping parts around the country is expensive. Hence, just-in-time manufacturing, with aftermarket parts a whole other business with its own need for profit.

Aftermarket spare stockists have the same warehousing overheads as the vehicle manufacturer. I don't think that's the main reason.

I said vehicle manufacturer and not OEM deliberately here.

OEMs manufacture bits for both the original vehicle manufacturer and the aftermarket spares market. Generally speaking. They even produce a line of parts that have a higher spec than the original car manufacture calls for but are required for the aftermarket demand.

How often have you opened an original car brand spares carton to find the part decorated with the markings of a reputable aftermarket (OEM) manufacture? Bearings, lamps, relays, solenoids, vacuum servos, spark plugs _{(my favourite)}, brake parts..... Frequently most likely.

What the vehicle manufacturer does is provide traceability, liability, "peace of mind", convenience and warranty. These value added attributes have a value and a real cost.

Were not talking about pirated knock offs here are we? That's something else again.

Back in the 1980's my brother had a VW bug. The indicators stopped flashing, so he went to the dealer for a replacement unit. VW sell Bosch parts, with the VW emblem emblazoned on them - but the Bosch part no. was still visible, so "no thanks" to VW's offer at £45, and off to the Bosch distributer....£25 there, but also a generic part number on their part (where the VW logo was on theirs)..... Eventually bought for under £10 at a local Motor Factor.

This does not mean that the part was of the same quality, only came from the same supplier: Apple choose the top 5% or so (at final test) of screens for their computers, the remainder going to the next bidders.

Well made aftermarket parts can be superior to OEM as these folks are quick to spot deficiencies and make the correction. I have seen this in suspension parts, valve train parts and engine internal parts. OEM are made to spec. and sometimes these parts fail under normal use that were not detected in testing. Some years ago I had a used car and the transmission was needing repair. The transmission mechanic provided me with a list of 132 improvements their aftermarket kit had over the OEM such as die cast replacing a plastic governor housing. Even the shift points were improved and I was amazed at how the car ran and shifted gears after the overhaul and about 50% less cost than the dealer wanted for same job.. I knew this car for about 9 years and the transmission was still working as good as the day it was overhauled. As direct or near direct sellers they do not require 1000% profit to be happy.

Replacement parts at the dealer are what we call cash cows, the markup is very high, this is where they make a lot of their profit, it has little to do with cost of the part, storage, shipping or anything else. The same thing exists in other markets as well, motorcycles are also terrible for high replacement part cost, this has been around for decades.

Back in the 1970s, I worked for a resistor firm, an OEM approached us to make a temperature sensor on their engines, this required a machined brass shell that screwed into the engine block, they were pushing real hard for a price well under $2.00 each, which was virtually the same as the cost of manufacturing it. We went down to the local dealer and bought one of these parts, dealer price....$20 each. The OEM was trying to get a markup of over 13 times cost from us, way beyond any total costs between us and the dealers. We gave them a bid and they went away quietly. To some degree, I vote for the greed factor, this went well beyond any reasonable profit.

I recall an article written back in the 1970s which did a cost analysis on building a car from OEM replacement parts, basically a car that retailed at under $6,000 at the dealer would end up costing nearly $70,000 in replacement parts. Given the experience we had with the OEM above (and it wasn't the only example), I could easily believe the article.

I can say that from having to buy some OEM parts for my motorcycle, it would easily cost well over 10 times what the bike cost me new and unfortunately, after-market parts are often only a little bit better on pricing although, in some cases, they are better than the OEM part.

Great opportunity for 3D printing of parts as needed. Soon to come. Jay Leno is already using this technology. Probably wont help the price though, at least for the near future.

These companies are mostly in the business to sell cars. If they made parts accessible relatively cheap. More customers would go for the repairs then consider replacement of the car.

MY suspicions have been confirmed. Thanks.

the simple answer is, not normally. there are a few asian countries capable of doing good metalurgy, s. korea e.g. , but for the the most part, they still don't have the technology [china]. making bearings is a good example.

Bearings are made with high precision machinery, not humans. Any country with the right machine can make bearings. Now if that country is making their own machines, then you are correct.

i disagree. i think you're only referring to the finishing proccess.

The best machining in the world can't compensate for inferior or inappropriate materials.

The biggest problem with goods from developing industrial economic sources is the material. Anywhere a short cut can be taken it is. QC in these environments is if it looks good and fits it's OK. Spelling on packaging/labelling is getting better now so really hard to spot....

My Daihatzu Terios 1300 needed a petrolpump. The dealer price was R6009.00; I bought an after-market pump that looks and works exactly the same for R250.00..[24x more expensive].

My old Nissan 1600 needed a water-hose which was priced at 640.00 at the dealer and R63.00 at Midas in South Africa.

I think agent prices are highway robbery!