History of the Replacement Parts Industry

Up until the 1930s, considerable competition existed in the automobile marketplace. In addition to a broad array of automakers, a significant number of independent manufacturing companies supplied automotive components for assembly lines. At the time, independent companies made both visible parts like fenders, hoods and grills for new-car assembly and repair parts, as well as so-called “hard” or ”mechanical” parts like batteries, belts and alternators for use under the hood.

As the auto industry grew and consolidated, the automakers absorbed most of the independent manufacturers making the visible component parts or the so-called "skin" of the vehicle. Some also refer to these components as "crash" parts because they are the parts most likely to be repaired or replaced in the event of a collision. The major automakers further consolidated their control over the exterior parts market by changing the look or style of new model car exteriors every year. The annual style changes made it prohibitive for an independent manufacturer to enter and compete effectively in this market. Reflecting concern over this lack of competition, the Federal Trade Commission conducted three investigations of the automaker crash part monopoly from 1968 to l976. It concluded that the auto manufacturers, known as original equipment manufacturers (OEMs) had a de facto monopoly in the parts market.

As competition from European and Japanese auto manufacturers intensified in the late 1970s and early 1980s, the U.S. automakers stopped the expensive process of constant style changes. As a result, independents once again started to manufacture quality replacement parts for use in the repair market, which resulted in competitive prices in the marketplace.