Mercedes-Benz Crash Repair & Insurance Counterfeit Parts Ripoff

VIDEO TRANSCRIPT

Mercedes-Benz took a potshot at free-market competition recently, firing a gravity bomb into insurers, but what they’re really doing is trying to engineer a monopoly, so they can rip you off, with impunity, until the end of time.

Mercedes-Benz even calls them "counterfeit" parts - framing the debate conveniently as if alternative suppliers of parts are in some way criminals, or perhaps black marketeers.

In fact, what they are, are direct marketplace competitors.

What a pity a company as big as Mercedes-Benz couldn’t find a proper dictionary. That corporate hubris. ‘Counterfeit’ actually means ‘made in the exact imitation of something’ - and here’s the important bit - ‘with the intention to deceive or defraud’.

These alternative parts are not counterfeit. There’s no intention to deceive or defraud. They don’t purport to come from Mercedes-Benz, and insurers do not buy them under that false impression. They purport to be exactly what they are: a low-cost alternative. So there’s Mercedes-Benz lie number one.

If you wanted to, you could set up shop selling replacement parts for Mercedes-Benzes, or any other car company, tomorrow. Nobody could stop you. It’s not a crime. Competition is perfectly legal - just don't allege or imply that the parts are genuine Mercedes-Benz parts, and you'll be absolutely OK.

Benz has a bee in its bonnet over some car insurers electing to source non-genuine repair parts to constrain costs. And the only reason they’re upset about it is: it hurts the company’s balance sheet. They want a monopoly, and they’re acting like a spoilt brat who can’t have one.

In in this most recent, ill-conceived bleat, Mercedes-Benz told the assembled motoring media lie number two, quote: “The reality is the use of non-genuine parts and the way they are fitted is the greatest threat to road safety that we as a community face.”

I’m sorry: in what universe does that claim actually make even vestigial sense? Fatigue, distraction, drink and drug-affected driving, second-rate civil engineering, old cars, the rapid mechanisation of the developing world - these are the big road safety threats. They’re very well documented. Every regulatory agency and serious academic agrees. There’s no evidence that alternative parts are even a diminutive blip on the road safety radar.

Maybe that’s why Mercedes-Benz didn’t produce any evidence - because it doesn’t exist. Inconveniently. But the soundbites were good - and apparently lapped up by the motoring press, who were flown at great expense for a Mercedes-Benz AMG racetrack driving day, where these statements were made. Maybe that’s why many attending press simply reported Mercedes-Benz’s claims without too much analysis. Or even thinking. It is always nice to be on the invitation list for the next big junket.

It makes you think about journalistic due diligence, though, doesn’t it? You might want to read between the lines of that next car review. Just saying … on one hand you’ve got ‘report the truth’ and on the other there’s ‘business class trip to the Frankfurt Motor Show’. It’s a dilemma...

Here’s lie number three: the bonnet. Mercedes-Benz showed the press a non-genuine replacement bonnet for the E Class, made of pressed steel (the genuine Benz bonnet is aluminium).

Mercedes-Benz told the media the genuine aluminium part weighs 13 kilograms. The steel aftermarket unit weighs 28 - a difference of 15. The genuine bonnet costs $1300; the non-genuine replacement, less than half that.

Mercedes-Benz then told the press the steel bonnet would react differently in a crash, affecting the deployment of the airbags and other safety systems.

What a soundbite. When I read that, it sounded like unmitigated bullshit to me. As an engineer I didn’t see that adding up at all. This is, like: Isaac Newton 101. Basic physics. But I’m not a collision mechanics expert. So I spoke separately to two blokes who are experts, widely acknowledged throughout the industry, and with unimpeachable credentials. One of them is even an insurance expert, who has an association with a major insurer - an insurer that does specify the use of genuine parts in all repairs. So, he had no particular axe to grind on this issue.

Both chaps agreed to comment on the condition that I not name them. So I won’t.

They both said, independently of each other, that the bonnet is just not substantial enough, in the context of the structures and energies involved in a serious crash, to affect significantly the vehicle’s crash performance. One described the Benz assertion that it would affect crashworthiness as, quote: “a bit of a furphy”. Strong words, for an engineer.

If that bonnet could affect the crash performance, a company with the resources of Mercedes-Benz would air freight a couple of bonnets back to Germany, they’d fit one and crash it in-house - and test the data. Then they’d get a second one crashed independently, and spruik the independent evidence heavily. There’s that word again: evidence. Apropos of that, in relation to the bonnet, I’m hearing crickets. And so were the assembled media.

So, what are we up to? That’s lie number three. And, if you’re worried about the 15-kilo weight disparity, the extra weight can’t be an issue. Fifteen kilograms. That’s nothing. There’s roughly 200 kilograms of weight range across the variants of E Class currently on sale. Fifteen KGs is much less than the difference between two big, fat captains of industry driving off to conquer the word in an E Class, and their liposuctioned mistresses driving off later for a liquid lunch.

Mercedes-Benz said insurers had, quote: “blood on their hands”. Strong stuff - another great soundbite - but in the absence of evidence it’s nothing but a lame grab for media coverage from a domesticated motoring press, which is (in my view) far too keen to get on a plane and go have some more fun at the expense of the car industry. I wonder how these junkets would seem in the current political context?

Two points on parts: if you own a premium car, get premium insurance, and if you care about genuine replacement parts, make sure your insurance company mandates their use. Me? I'd want the aluminium bonnet replaced by another aluminium one after a crash. But I'm an anally retentive lapsed engineer. However, I’d be just as happy to crash in a car with a steel bonnet. It would not make a skerrick of difference to the outcome.

Second: All Mercedes-Benz needs to do to make this problem go away is to lay off with the extortionate parts pricing. Try building an E Class from spare parts. Good luck getting much change from a million dollars. Maybe more.

I had a 2UE listener get in touch the other day. He’d just purchased a 10-year-old A Class - the poverty pack Benz - and shortly afterwards the engine went into ‘limp home’ mode, which is just what it sounds like. They diagnosed a defective transmission ECU - the black box with a few chips in it that tells the transmission when to shift. The dealer quoted him $3000 - and this is for a car worth $6500 today, and the cheapest model in the Mercedes-Benz range when it was new. It’s extortionate and unjustifiable. Is it any wonder some insurers are looking for more affordable options?

Mercedes-Benz is exploiting a gullible press gallery, and using a very tenuous link to safety in an attempt to engineer a monopoly on the parts. It’s anti-competitive. And everyone will pay through the neck if that happens - because insurance premiums would skyrocket.

The best deal for consumers happens when multiple vendors challenge each other for sales in an actively competitive marketplace. Most people would pay more for genuine Mercedes-Benz parts. Twenty per cent more? Sure - but not at current genuine parts pricing levels, which are the commercial equivalent of shopping with a gun at your head.

Alleging this spurious safety link is nothing more than a naked grab for cash by Mercedes-Benz, and an insult to your intelligence.