Car builders accused of inflating parts prices

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The news is advanced by the weekly Expresso, based on an investigation by the research consortium European Investigative Collaborations (EIC), which started from a series of confidential documents obtained by the French newspaper Mediapart.

According to the investigation, at issue is software used by the consultancy Accenture, while working for five large car manufacturers, between 2008 and 2013, and which indicates how to increase the price of replacement parts by up to 25% , intelligently and based on the “perceived value” by the customer (ie, how much the consumer is psychologically willing to pay). Replacement parts that, adds the weekly, are protected by patents.

Known as Partneo, the software in question was initially designed for Renault and later used by Nissan; by Peugeot and Citroën, two emblems of the PSA group; by the American Chrysler, from the FCA group; and by Jaguar-Land Rover.

Mechanical intervention 2018

According to Expresso, the total gains from the price variations introduced by the use of this software reached at least 2.6 billion euros . An increase in profits achieved at the expense of artificial price inflation.

Will be nice?

The solution seems, however, to raise some questions from a legal point of view, after having already been at the origin of a judicial complaint, filed by the creator of the program Partneo itself, Laurent Boutboul, before the Commercial Court of Paris, after having sold its software company to Accenture in 2010.

Among Boutboul's allegations is, precisely, the charge that the computer program was used to coordinate price increases for spare parts between different car brands , in violation of competition rules.

This accusation has, however, already been refuted by Accenture, which, in a statement, guarantees that Boutboul's accusations are "unfounded", adding that "the Competition Authority in France found that the evidence presented does not justify any further prosecution".

In fact, brought before the French Competition Authority, this same information ended up being devalued by the body, which considered that "these elements did not justify, at this stage, the opening of an investigation".

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Thirty-one brands contacted

Also according to the weekly news, Accenture will have tried to sell the software to a total of 31 European, Asian and American car brands, including Volkswagen, BMW, Daimler/Mercedes, Volvo, Aston Martin, Toyota, Mazda, Honda, Mitsubishi, Hyundai, General Motors and Ford.

The consulting company then allegedly used the argument that several major competitors had already purchased the computer program, and that this allowed it to increase prices by between 10 and 20%, basing this guarantee on the results obtained by Renault, which it had also purchased the program from Acceria, the Boutboul software company, prior to its acquisition by Accenture.

In addition to the unauthorized sharing of confidential information by Renault with its competitor, Groupe PSA, Accenture may, according to the newspaper, also engage in the practice of "Hub and Spoke", ie, have provided information to car manufacturers which allowed them to act in concert, with a view to raising prices, autonomously.

Contacted by the EIC, BMW, Daimler/Mercedes, Toyota, General Motors, Volvo and Volkswagen said they did not buy the software.

Builders with 80% profit margins… before Partneo

According to Accenture documents cited by the investigation, even before the Partneo went into operation in 2009, manufacturers already enjoyed global profit margins of up to 80%. With spare parts representing between nine and 13% of the turnover of car manufacturers; and up to 50% of its net income.

These profits are mainly generated by so-called original spare parts, such as windshields or mirrors, where customers have little choice. Being often forced to buy from the manufacturer.

Windshield Replacement 2018

Also according to data from Accenture, these parts represent between 30 and 50% of manufacturers' sales.

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