Panelbeaters worried about parts prices

Press, 19 November 1982, Page 18

Panelbeaters worried about parts prices

Auckland Panelbeaters suspect that car parts prices are deliberately raised to cover the unprofitable side of car deals.

They say their suspicions are based on submissions made to the Industries Development Commission earlier this year by the Motor Vehicle Dealers’ Institute.

In its draft report on a motor vehicle industry development plan, the commission notes that car dealers consider they gain only acceptable profits from the sale of parts and accessories. The vice-president of the Motor Body Builders’ Association, Mr John Shirtcliff, said that panelbeaters were wondering if there was an element of "transfer pricing” on parts and accessories.

“Are buyers of spare parts subsidising unprofitable areas of a franchise holder’s business?” he asked. Mr Shirtcliff, who blames a monopoly on the supply of parts for the high price of spares, intends to put the association’s suspicions before the commission when it hears submissions on its draft report in Wellington this week. The association wants the

monopoly. on parts held by car manufacturers broken. Mr Shirtcliff said that if car parts were available in a freely competitive market, panelbeaters' bills could be reduced up to 15 per cent. Insurance premiums could be cut and the growing number of uninsured cars on the road would drop. As ammunition. the association has a report released in Britain in May by the Monopolies and Mergers Commission, which recommends that car manufacturers and importers stop forcing franchise-holders to buy parts exclusively from them. The report found the price of parts generally was higher when they were distributed through the franchised network. The association also has the case of an Auckland company which last year tried to undercut the price of Ford parts by importing spares from Taiwan. It is bitter that Ford New Zealand thwarted the company by winning a court injunction under the protection of the Copyright Act. The Ford victory turned several other firms away from other importing ventures. The irony, according to Mr Shirtcliff, is that Ford is now importing parts from Taiwan.