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ARA Updates
Industry news from the national association
Page 21
Recyclers News Press
Automakers Manufacturing Their Own
Off-Brand Parts Lines
In an effort to keep consumers coming back to their
dealerships for parts, some automakers are manu-
facturing and selling parts under a "white label" or off-
brand parts lines. Mitsubishi, Mazda and Chrysler
have augmented their original equipment replace-
ment parts business with white label products be-
cause of dwindling parts sales due in part to competi-
tion from other after-market, cheaper repair shop
businesses like Pep Boys and Jiffy Lube. With
Mitsubishi's new "Value Line", Mazda's "Value Prod-
ucts by Mazda" and Chrysler's "Mopar" parts lines,
the automakers are increasing sales by matching
prices with aftermarket brands. However, while the
less expensive parts are selling and increasing the
brand loyalty, the profit margins are shrinking. Some-
times the automakers' parts are made with less ex-
pensive materials, offered in cheaper packaging, or
even produced in factories closer to the U.S. to trim
manufacturing and/or shipping costs. According to an
Automotive News story on the "off-brand" practices,
an original equipment timing belt sold in a plastic bag
with the Mitsubishi logo retailed for $134.15 while an
identical Value Line timing belt sold in a white card-
board box with the Mitsubishi logo cost $81.95. Value
Line parts are now outselling the original equipment
parts by a 16 to 1 margin according to a Mitsubishi
executive. As a Mitsubishi North American Vice Pres-
ident commented "People were looking for value. We
had to come up with a compelling reason for them to
come back to the dealership."