Tuesday 21 October 2014

The end of "Competition " !

The world car companies have decided to close ranks and add car servicing to the profit chain that surrounds the auto industry.  No longer will they provide independent mechanics with the critical technical information necessary to understand the modern automobile engine and the vital software that enables a servicing mechanic's computer to "talk "to the onboard computer in the car will only be available to mechanics in the dealer network.

The car manufacturers claim that the technical aspects of their engines have progressed far beyond the ability of independents to service them and they insist that this complexity needs the "factory trained "skills that will only be available in future to those dealers licensed to provide them. It also forces the "closed shop " aspect on car owners and herds them into dealer's workshops - where price charged on work performed will not be subjected to competition.

It is true that cars have become "computers on wheels " and this move seems to be aimed squarely as the small mechanic who in a previous era ran the workshop attached to most petrol stations.  Those were the days when the local "service station "not only provided fuel, oil, water and air, but could fix a flat tyre, do a "grease and lube "service - and often at a rate far lower than charged by a big city car dealer's workshop.

Today, those facilities no longer exist.  The "service station "has morphed into a seven eleven convenience store - that also sells petrol - and nothing else even remotely involved with the car. Mechanical repairs outside the ranks of the car dealerships have evolved into a much smaller number of well equipped - and technically trained - mechanics who have invested a lot of money into the equipment needed to service and repair the car engine of today.  They are not "cheap " - but they usually shade the prices charged in the big dealer workshops.

These mechanics get their skills from the TAFE network and many served their apprenticeship in a car dealers workshop.  Many car owners have a favourite mechanic and leave the care of their car entirely in that persons hands.  This seems to be an attempt to force motorists to comply with the wishes of the car industry in adding servicing to the "after sales "profitability already enjoyed in artificially high prices charged for "genuine "spare parts and accessories.  Profits are to be made corralling car owners into workshops which will only fit these overpriced replacements and ignore the generic equivalents - which sell at a fraction of what the car makers charge.

This move is a game changer.   Competition has shaved the profit margins that car manufacturers once enjoyed and they are now turning to the profitability chain that exists over the lifetime of the product they produce.  Our laws enable a licensed motor mechanic to provide service without voiding warranties - and the car manufacturers see withholding enabling information as a way to end that. It is an end run to put the independent industry out of business - and reap the rewards from virtually making car service and repairs a controlled monopoly.

This will probably end up in the courts.  Arbitrarily withdrawing information and the software necessary to run computers and making that only available to in-house technicians could be seen as a restriction of trade - and deemed illegal.  It seems certain that the vast number of independents who make their living servicing cars will try and protect their industry.

For the ordinary motorist, the cost of running a car is in the hands of the judiciary - who decide these things !

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