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Car Makers Used Software To Raise Spare Parts Prices (engadget.com)

Posted by msmash on from the catch-me-if-you-can dept.

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.

4 of 276 comments (clear)

  1. That's how inventory theory works! by david.emery · · Score: 5, Insightful

    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.

    1. Re:That's how inventory theory works! by sinij · · Score: 4, Insightful

      While I support spirit of your argument, I must point out one fatal flaw in it. People who buy new cars are not the same people who repair them out of warranty.

      For example, BMW part prices started insane and went up from there over last decade or so. This had zero effect on new car sales. It does depress residual value at the end of the lease, but people don't seem to factor it into their purchasing decisions.

  2. Re:this is why... by AlanBDee · · Score: 3, Insightful

    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".

  3. Re:this is why... by geekmux · · Score: 3, Insightful

    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.