Federal Issues

Aftermarket Crash Parts
Right to Repair Act of 2001
Defect Notification
Design Protection
Liability Reform
On-Board Diagnostics (OBDII)
Taxes
Vehicle Scrappage
VOCs - Consumer Products
VOCs - Automotive Painting

Aftermarket Crash Parts

The Issue: Seeking to gain monopolistic pricing powers, vehicle manufacturers have lobbied state legislatures to enact prohibitions on the use of aftermarket crash parts. In recent years, the car companies' state legislative efforts have failed, leading some to believe that car companies will bring this issue to Capitol Hill.

What are Aftermarket Crash Parts?: Aftermarket crash parts are the sheet metal and plastic parts that are replaced on vehicles to repair collision damage. These parts are important to the appearance of a vehicle and are sometimes referred to as cosmetic replacement parts.

Aftermarket Crash Parts Reduce Consumer Insurance and Repair Costs: In the collision repair industry, the introduction of non-original equipment manufacturer [non-OEM] crash parts has reduced the cost of body repair work, resulting in lower insurance premiums and fewer vehicles being "totaled out." Many non-OEM crash parts are priced 20-50% below the comparable vehicle manufacturer part.

In recent years, state legislatures across the country have studied the use of non-OEM crash parts to determine if insurance companies' use of these parts needs to be regulated. Overall, while some states have decided to require greater consumer disclosure, states have found that the availability and use of these parts is beneficial to the public.

Crash Parts are not Structural/Safety-Related: In the past year the General Accounting Office studied the safety of aftermarket crash parts and published a report on January 31, 2001 [GAO-01-225 Aftermarket Crash Parts]. After extensive research that included examining several scientific studies and conducting interviews with more than 40 trade organizations, parts distributors and vehicle manufacturers, the GAO study did not lead to any recommendations for regulatory or legislative restrictions of aftermarket crash parts.

The report stated that "although NHTSA has the authority to regulate aftermarket crash parts, it has not determined that these parts pose a significant safety concern and therefore has not developed safety standards for them."

Additionally, the Insurance Institute for Highway Safety has crash tested vehicles with and without sheet metal parts and has concluded, "There is no reason to believe - let alone assume - that cosmetic crash parts significantly affect car crashworthiness."

Congress Should Preserve Competition: The GAO report should put to rest any congressional action on this issue. If the issue does arise, however, Congress should support a competitive market for the crash parts industry and resist any attempts to restrict the use of aftermarket crash parts. Please contact the Automotive Aftermarket Industry Association at 301/986-1500 for more information.

Related Articles: For more information on this issue, see the May 2001, February 2001, August 2000, March 2000, January 2000 and November 1999 Capital Report articles.

The Motor Vehicle Owners Right to Repair Act of 2001

The issue: Car manufacturers are using the proliferation of computer components besides the emissions systems in today’s cars to create a monopoly for their dealerships. The aftermarket faces a threat much like it has from OBDII emissions systems - that independent service providers will not be able to diagnose any problems, not just emissions-related problems.

The Impact: Similar to the OBDII systems, if vehicle manufacturers do not share computer codes necessary for repairing late model vehicles, independent service providers will be unable to perform even the most basic service on these cars, and consumers will be forced to return to the dealership for all repairs on their vehicles.

AAIA Position: AAIA is at the forefront of efforts to ensure that independent service providers receive the necessary information for repairing today’s vehicles. The Motor Vehicle Owner’s Right to Repair Act, which will be introduced in the 107th Congress, seeks to accomplish this through proactive legislation.

Letter Writing Campaign: Send a letter to your Representative and Senators to inform them of the Motor Vehicle Owner's Right to Repair Act. Let them know how this legislation will help you and all their constituents who depend on their vehicles in their everyday lives. Click here to learn more.

For more information: http://www.aftermarket.org/Government/Grassroots_Activities/hr2735.asp.

Defect Notification

The issue: The Firestone recall situation has generated growing interest in federal legislation/regulation that seeks to protect the public from defective products.

The Impact: Regulations are being implemented that attempt to provide the government with an early warning of potentially harmful product defects. There is danger that these regulations could pose a substantial record-keeping burden and/or subject manufacturers to unwarranted litigation. The possible result: an environment where more, not fewer defective products are brought to market.

AAIA Position: We support legislation and regulations that expose dangerous automotive defects and fairly compensate injured parties. At the same time, AAIA continues to oppose any government actions that would overly burden members, curtail the development of safer products or unfairly punish companies that in good faith attempt to correct defective products.

AAIA Staff Contact: Larry Northup (Larry.Northup@aftermarket.org)

Related Articles: For more information on this issue, see the January 2002, February 2001, January 2001, November 2000, and October 2000 Capital Report articles.

Design Protection

The issue: In order to obtain a monopoly on the sale of replacement parts and materials, vehicle manufacturers have consistently attempted to curtail the aftermarket's ability to reverse engineer OEM designs and formulations.

The Impact: Restrictions on the ability to design, manufacturer and sell aftermarket parts can easily be broadened to include a wide range of products. In a worst-case scenario, suppliers who do not offer OEM materials could be cut out of the marketplace entirely. Alternatively, those that do offer OEM products would become subject to the pricing and distribution whims of the car companies.

AAIA Position: AAIA opposes any effort to restrict aftermarket access to designs and formulations that could hamper consumer choice or harm the aftermarket’s ability to compete.

AAIA Staff Contact: Aaron Lowe (Aaron.Lowe@aftermarket.org)

Liability Reform

The issue: The system of assigning liability and awarding damages for potentially dangerous products or activities is out of control in America. Further, product sellers are often dragged into costly lawsuits dealing with design or manufacturing issues over which the sellers have no control.

The Impact: Fear of unlimited liability can stifle innovation and curtail industrial expansion. Astronomical damage awards in liability cases can destroy companies and/or industries, eliminate jobs and cripple communities.

AAIA Position: AAIA is working in concert with other powerful stakeholders to bring a degree of reason to an out-of-control system of legal liability. We support current legislation that limits punitive damages, assigns true damages according to degree of responsibility and removes liability from companies (distributors and lessors) who have no control over product design or manufacture.

AAIA Staff Contact: Larry Northup (Larry.Northup@aftermarket.org)

Related Articles: For more information on this issue, see the May 2001, June 2000, March 2000, January 2000, December 1999 and October 1999 Capital Report articles.

On-Board Diagnostics (OBDII)

The issue: On-board diagnostics systems (OBDII) are key to the proper performance and maintenance of various automotive emissions and safety-related components. The ability of the aftermarket to utilize and service OBDII systems is essential if consumers are to retain their freedom of choice in selecting service facilities. Further, aftermarket manufacturers must have information necessary to ensure that their components will operate properly with the vehicles’ sophisticated on-board computers. Vehicle manufacturers and their allies have attempted to eliminate or restrict the aftermarket’s access to critical OBDII service tools and information.

The Impact: Should vehicle manufacturers succeed in controlling access to certain OBDII codes and scan tools, consumers would be forced to patronize dealerships and aftermarket service facilities and parts suppliers would be deprived of a huge repair and maintenance market.

AAIA Position: AAIA has aggressively fought to deny vehicle manufactures the ability to restrict access to key OBDII systems. AAIA played a key role in the passage of landmark legislation in California that guarantees aftermarket access to OBDII service information, tools and operating parameters in that bellwether state.

AAIA Staff Contact: Aaron Lowe (Aaron.Lowe@aftermarket.org)

Links for additional information:
California Air Resources Board SB 1146: www.arb.ca.gov/msprog/mailouts/mso0109/mso0109.doc
EPA service information site: www.epa.gov/otaq/vehserv.htm
Read AAIA and AWDA's July 25, 2001 testimony (.pdf/84 KB) to the EPA.
Letter of Intent from Auto Manufacturers (.pdf/144 KB).

To view a presentation by Holly Pugliese of the U.S. Environmental Protection Agency regarding their service information rulemaking, click here (given on October 30, 2001 at AAPEX in Las Vegas).

To view a presentation by Allen Lyons of the California Air Resources Board regarding implementation of SB 1146, click here (given on October 30, 2001 at AAPEX in Las Vegas).

For information about recent CARB hearings, see the State Issues page.

Related Articles: For more information on this issue, see the December 2001, July 2001, June 2001, March 2001, October 2000, June 2000, December 1999 Capital Report articles.

Taxes

The Issue: Congress and the administration are constantly engaged in a heated debate about federal tax rates, preferences and policy. Business interests, including the aftermarket, ultimately lie at the heart of this discussion.

The Impact: Government taxation of businesses and individuals can have a profound effect on business operation, financial management and even succession. Tax policy can also impact the overall economy, significantly altering demand for aftermarket products and services.

AAIA Position: AAIA advocates a federal tax policy that will help build a strong national economy through increased business investment, private sector consumption and savings. AAIA supported the successful legislative effort to eliminate the so-called death tax that has penalized small business owners who seek to pass their companies on to heirs.

AAIA Staff Contact: Najha Phillips (Najha.Phillips@aftermarket.org).

Related Articles: For more information on this issue, see the March 2001 and February 2001 Capital Report articles.

Vehicle Scrappage

The Issue: In an attempt to increase fleet fuel economy and/or reduce tailpipe emissions, the federal government and several states have proposed and in some cases implemented programs that encourage the scrapping of older vehicles. Under these programs, car owners are offered small financial incentives to scrap their vehicles and replace them with newer ones. In most cases, the performance of vehicles targeted for scrappage could be more cost effectively improved through proper maintenance and repair by the independent aftermarket.

The Impact: Since the repair and maintenance of older vehicles are mainstays of the independent aftermarket, the continued expansion of scrappage programs could pose an economic threat to the industry.

AAIA Position: Vehicle scrappage programs have not proven to be effective in improving air pollution levels or fleet fuel economy. Consequently, AAIA opposes scrappage programs and instead advocates proper maintenance and repair of older vehicles in order to improve performance.

Recent legislative activity: See Sec. 822 of the Energy Policy Act of 2002 (S.517) .

AAIA Staff Contact:AAIA government affairs at apsa@govalliance.org, or 301-986-1500.

Related Articles: For more information on this issue, see the January 2002, December 2001, May 2001, May 2000 and January 2000 Capital Report articles.

VOCs - Consumer Products

The Issue: Under pressure to reduce pollution in many metropolitan areas, the California Air Resources Board (CARB) is revising its volatile organic compound (VOC) regulations. These new regulations could result in required VOC reductions that are unachievable without product bans or sales limitations.

The Impact: Overly burdensome regulations can force extensive reformulation of automotive products such are brake cleaners, waxes & polishing compounds, intake/carburetor cleaners, degreasers, and other similar products. Product efficacy is often adversely affected. Bans or sales reductions could dramatically impact product marketability and profitability in California. Moreover, as a bellwether state, California often sets the regulatory agendas for many other states.

AAIA Position: AAIA is working closely with CARB to ensure that VOC regulations remain reasonable and that all states agree on a single, regional or national standard that can help ensure cost-effective compliance.

AAIA Staff Contact: Aaron Lowe (Aaron.Lowe@aftermarket.org).

Links for additional information:
California Air Resources Consumer Products website: http://www.arb.ca.gov/consprod/consprod.htm
Ozone Transport Commission website: www.sso.org/otc

Related Articles: For more information on this issue, see the May 2001, August 2000 and October 1999 Capital Report articles.

VOCs - Automotive Painting

The Issue: The Ozone Transport Commission (OTC), which includes environmental agencies from 13 northeastern states, has developed model regulations governing the use of automotive paints and spray guns as a means of controlling air pollution from Volatile Organic Compounds (VOCs).

The Impact: Overly burdensome regulations could adversely impact body shops, and in turn their suppliers. Additionally, since each OTC state would be free to adopt its own rules, the industry could face a jumble of conflicting regulations, greatly adding to the cost of doing business in northeast states and elsewhere.

AAIA Position: AAIA is working to ensure that VOC regulations remain reasonable and that all states agree on a single, regional or national standard that can help ensure cost-effective compliance.

AAIA Staff Contact: Larry Northup (Larry.Northup@aftermarket.org).

Related Articles: For more information on this issue, see the May 2001 and August 2000 Capital Report articles.