Impact of Cheap Generic Replacement Parts
A recent Automotive News article (March 2, 2009) titled Cheap Online Parts Cuts Into Dealers Profits discussed a flood of cheap – mostly Chinese-made – generic (not knock-off) replacement parts hitting the market. The article cited examples such as an alternator for a Nissan Altima that sells for $167 at the dealership and $39 on eBay, a starter for a 1999 Chevy Silverado that has a savings of nearly $175, or catalytic converters that customers can save hundreds of dollars on. The offset is of course quality, which is also outlined in the article.
The article includes several opinions ranging from dealers that are using the generic parts, to some that wouldn’t consider it, to others that are quoting repair prices with two or three different quality levels of parts (Ex. - Good – generic; better – Motorcraft; best – OEM).
With independent repair shops with discount prices aiming to steal away vital dealership service and parts business, what is your opinion on the use of these parts and what are you doing in your service and parts departments?
The article includes several opinions ranging from dealers that are using the generic parts, to some that wouldn’t consider it, to others that are quoting repair prices with two or three different quality levels of parts (Ex. - Good – generic; better – Motorcraft; best – OEM).
With independent repair shops with discount prices aiming to steal away vital dealership service and parts business, what is your opinion on the use of these parts and what are you doing in your service and parts departments?
Tags: department, fixed, generic, oem, operations, parts, replacement, service
Replies to This Discussion
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Permalink Reply by Hal Scott on -
As much as I hate to admit it, this same topic was an issue when I was a Parts Manager in 1975 but the parts came from Taiwan. Some of the parts were of acceptable quality and fit and others were terrible. The most important consideration is the warranty and the guarantee of the supplier. If you trust them to take care of any concerns in a timely and fair fashion and they offer a return option of overstock than these parts have a place in the market. They allow you to offer pricing options and still retain the necessary gross profit. Also, some folks will cost them at factory price and take the profits at the time of purchase - just a choice but it has risks so think before doing this. It can be a high risk venture so check out your potential supplier very carefully before buying from them.
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