Automotive Aftermarket Industry Ass Cautions States Against Overreacting
14 October 1999
Automotive Aftermarket Industry Association Cautions States Against Overreacting to State Farm Court Verdict Urges Greater Consumer Disclosure Legislation
BETHESDA, Md., Oct. 13 -- The Automotive Aftermarket Industry
Association (AAIA) cautioned state policymakers not to overreact to the
Illinois court verdict against State Farm Insurance Company and offered to
draft model pro-consumer legislation.
In a letter to more than 1,000 state legislative leaders and members of
insurance committees in all 50 states, AAIA president Gene Gardner addressed
the recent Illinois court verdict by outlining the association's position on
crash parts. "State policymakers need to see what can be learned from the
trail deliberations. The primary lesson learned here is that greater
disclosure to consumers serves the public by creating a fairer and more
competitive marketplace in the crash repair industry."
AAIA is the trade association for 2,700 member companies who manufacture,
distribute and sell motor vehicle parts, accessories, tools, equipment,
materials and supplies. In his letter to state legislators, Gardner explained
that AAIA-member companies support greater consumer awareness through
disclosure.
"The availability of independently produced replacement parts by the
aftermarket has helped control the rising cost of vehicle service, crash
repair and ultimately, insurance rates," said Gardner.
AAIA supports the following disclosures regarding crash parts:
* Insurance companies should disclose to policyholders, at the time they
purchase their policies, the extent of coverage and the options provided by
those policies regarding the type of replacement sheet metal parts, whether
made by the vehicle manufacturer or an aftermarket manufacturer, that will be
used in the repair of covered damages.
* Prior to repair of a vehicle, autobody shops should disclose to the
vehicle owner the identity of the manufacturer of any part, and all applicable
warranties for that part, that will be used in the repair of the damaged
vehicle.
"Through disclosure, consumers will be given greater choice. And by choice
we mean that the car owner should be able to choose the appropriately priced
crash part based on their vehicle's age, value and condition," said Gardner.
"As our industry has grown, consumers have voted for competition with
their wallets, patronizing the independent aftermarket three-to-one over the
car companies and their franchised dealers. The availability of independently
produced replacement parts has helped control the rising cost of vehicle
service, crash repair, and ultimately, insurance rates," said Gardner.
Facts About The Automotive Aftermarket
The following definitions have been prepared by the Automotive Aftermarket
Industry Association (AAIA) to help clarify terminology used in news reports
about the recent Illinois class action court decision against State Farm
Mutual Automobile Insurance Company. This information is intended to help
dispel some misconceptions about the aftermarket as a result of the extensive
coverage of this court case.
Automotive Aftermarket: The automotive aftermarket encompasses every
product and service for maintaining, repairing, accessorizing and customizing
a motor vehicle once it leaves the assembly line. Included are replacement
parts, accessories, lubricants, fuel, tools and equipment, tires, appearance
products and repairs. The aftermarket is an integrated network of mostly
independent, privately-owned companies that manufacture, remanufacture,
distribute, retail and install parts and products for consumers.
OE Parts: Original equipment parts are parts manufactured by or for the
company that builds the original motor vehicle.
Non-OE Parts: These parts, also known as aftermarket parts, are
manufactured by companies other than the original carmaker. Many companies
produce parts for car companies, but also sell parts under their own brand
name in the aftermarket.
Crash Parts: Exterior sheet metal parts or "outer shell" body parts used
to replace parts damaged in collisions, such as hoods, fenders, doors, and
trunk lids.
Automotive Aftermarket Statistics
U.S. motor vehicle aftermarket retail sales are $264 billion in 1999.
Crash parts sales are less than 2 percent of this number, or approximately
$5 billion.
Original equipment crash parts sales comprise about 75 percent of total
crash parts sales.
Recycled and salvaged parts account for 10 percent.
Aftermarket crash parts account for the remaining 15 percent.
Aftermarket crash parts typically cost from 20 to 65 percent less than
original equipment parts.
Note: A copy of this news release is available electronically at the AAIA
World Wide Web site at http://www.aftermarket.org