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Car Makers Used Software To Raise Spare Parts Prices (engadget.com)
An anonymous reader writes: Ever had the nagging suspicion that your car's manufacturer was charging outrageous prices for parts simply because it could? Software might be to blame. Reuters has obtained documents from a lawsuit indicating that Jaguar Land Rover, Peugeot, Renault and other automakers have been using Accenture software (Partneo) that recommended price increases for spare parts based on "perceived value." If a brand badge or other component looked expensive, Partneo would suggest raising the price up to a level that drivers would still be willing to pay. It would even distinguish parts based on whether or not there was "pricing supervision" over certain parts (say, from insurance companies or focused publications) to avoid sparking an outcry.
1) The software company that implemented this feature.
2) Each manufacturer that used it.
Nice little price fixing app for the industry you have there. Maybe you need more government regulation.
See for example Hillier and Liebermann, Introduction to Operations Research, "Inventory Theory" (chapter 18 in 8th edition) This is basically managing the components of the inventory model to where the value of filling the order yields maximum profit. It might be really annoying (like when I got charged $1500 for a replacement wiring harness for my truck), but it should not be a big surprise to anyone who thinks about this.
A Jeep to save money? Pretty much everything breaks on a Jeep.
I find it is a double edged sword ... yes, you pay whatever the dealership/car company is charging for parts ... but they also have standardised the labour costs.
So, a specific job is going to be however many units of time was determined by the manufacturer -- no more, no less.
Contrast that with smaller garages, where you're going to pay for them to figure out the problem, track down the part, and figure out how to install it.
You can end up paying so much more in labour costs when you don't go to the dealer it isn't funny. I know my brother has sunk more into vehicle repair costs from independent mechanics than he ever should have, because he thought he was saving money.
But, knowing that they figure out the most they can get away with charging for parts is yet another example of why the people who bray about the "free market" are full of shit -- the market isn't free, because the players will go to great lengths to ensure it isn't.
The 'market' isn't setting the price, the vendors are gouging as much as they can get away with. Prices don't ever go down, because executive bonuses need to be kept at record levels.
Are Honda's expensive to maintain? Mine has seemed fairly reliable. As I look at my spreadsheet there's only a handful of the costs that are replacement parts: 3% of the total cost of the car. (not including regular maintenance like a timing belt changes)
As I compare it to the cost of our 4Runner it is more expense; The Accord costing about $270/mo vs $191/mo but we've only had the Accord for 8 years vs 15 years for the 4Runner. Check it out yourself if you're curious: https://docs.google.com/spread...
BTW: this is what it looks like if you try to "drive the car until the wheels fall off".
This is why you look at car repair cost estimates before you buy your car, and use aftermarket parts when you can.
Then no one would ever buy a Honda.
Uh, let's keep in mind that only 10% of the automobile-driving population still knows how to use a wrench under the hood, so the cost of maintenance is essentially a non-factor. They're all expensive to maintain or repair because the overwhelming majority of car owners are paying someone else to do the maintenance.