 | Home > Off Topic > Why cars are so expensive ~ this can't help |
 
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018   
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"German suppliers Brose, Kiekert fined $21M over bid-rigging in Europe
BRUSSELS -- The European Commission said in a statement Tuesday that it had fined German suppliers Brose and Kiekert a combined 18 million euros ($21 million) for taking part in bid-rigging activity, known as cartels in Europe. Brose AG took part in a cartel with Canada's Magna in the supply of door modules and window regulators for some Daimler vehicles. Canada's Magna International Inc. and Kiekert AG formed a cartel concerning latches and strikers to BMW and Daimler. The suppliers coordinated pricing behavior and exchanged commercially sensitive information to preserve their existing businesses and keep prices up. Magna was not fined because it revealed both cartels to the Commission. Cartels are called bid-rigging or price-fixing violations in the U.S., where 46 auto suppliers paid about $3 billion in federal fines for price-fixing over the last decade. Kiekert was also fined $6.1 million for bid-rigging in the U.S. in 2017. The EU, which oversees competition policy in the 27-member European Union, has conducted a series of major investigations into suppliers since 2013, imposing a total of 2.17 billion euros ($2.5 billion) in fines. Law enforcement authorities in the United States and elsewhere have brought price-fixing cases related to seat belts, radiators, windshield wipers, air-conditioning systems, power window motors and power steering components among other parts. A separate settlement has been reached for up to $1.2 billion covering auto purchasers who sued saying the price fixing and bid rigging had caused millions of consumers and businesses from around the country to pay more for some new or leased vehicles and replacement parts. Brose ranks No. 38 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $6.8 billion in 2019." (You need to register to view ~ https://www.autonews.com/suppliers/german-...ing-europe 
Press release 29 September 2020 Brussels Antitrust: Commission fines car parts suppliers of € 18 million in cartel settlement https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1774 "Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the cartel participants concerned, damages may be awarded without being reduced on account of the Commission fine." |
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30th Sep 2020 6:02am |
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| macfrank Member Since: 05 Nov 2015 Location: somewhere in the north Posts: 1065  
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While my experience with auto suppliers and OEMs may not be comprehensive, I do have some insights into how cars and some components are developed by suppliers and paid for by OEMs. From what I've seen, cartels are not why cars are so expensive. Some automakers' purchase departments are downright immoral when it comes to "negotiating" prices and paying bills. Often there are just two or three possible suppliers for specialised parts and development services. If they want to make a living and get an ROI on their investments, their only chance is to somehow make an agreement about a fair price. Ok, I'm not talking about wipers, but they're also not really contributing to a car's price
fun fact: there are far more obscure cartels such as mattresses  and escalators and elevators (should you ever need one  ). |
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30th Sep 2020 6:14pm |
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| macfrank Member Since: 05 Nov 2015 Location: somewhere in the north Posts: 1065
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Ok, I see. Interesting aspect. I read "...and bid rigging had caused millions of consumers ... to pay more...".
Also fines seem to be only a small part of a supplier's turnover (about 0,1% in Brose's case). But that of course may be the point. Substantial fines could put them out of business, so not more fines in the future  |
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30th Sep 2020 6:55pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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Six of one and half a dozen of the other ~ both are costs ultimately passed through to the car buyer, although EU fines are used in general budgets and so notionally decrease member country contributions. I think we can also dispense with "alleged", both companies fessed up to what was going on, partly because the third company grassed on them but also to help reduce the final fine. |
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30th Sep 2020 7:07pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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I'm not clear, but are you defending illegal cartel activities? |
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30th Sep 2020 7:10pm |
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| DSC-off Member Since: 16 Oct 2014 Location: North East Posts: 1397 
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And now thousands of employees at those companies will have to take part in "Anti Competetive Practice Training".
Ironically, they never committed any offence in the past and never had the opportunity to do so. It was a few high up executives that should have known better.  |
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30th Sep 2020 7:26pm |
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| diduan Member Since: 13 Oct 2016 Location: Central Balkan Posts: 260 
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Cars are expensive because people are willing to demonstrate their position in society by parking the vehicle XYZ in front of their house.
There are so much great used car options available. Defender 110 SW MY2011 2.4tdci decat, no EGR Jeep Wrangler YJ 1990 4.0. Front 78' Dana 60, Rear CUCV 14 bolt |
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30th Sep 2020 7:35pm |
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| macfrank Member Since: 05 Nov 2015 Location: somewhere in the north Posts: 1065
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Not in case of the mattress cartel, that's for sure But there have been situations in the past where auto suppliers could only survive if they stood together against a very rotten mindset on OEM's side. Sorry I can't put it more politely and of course can't name anyone. But at that point I decided to not get any deeper into it and focus on technical problems again - much more satisfying |
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30th Sep 2020 7:51pm |
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| Muddybigdog Member Since: 11 Apr 2014 Location: Suffolk Posts: 1016 
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Quote: “Too many people are buying things they can't afford, with money that they don't have... to impress people that they don't like!"
How car companies seem to be surviving Jumped ship to reliability - Mitsubishi L200 Puma 90 XS - Sold D3 - 2.7 S x2 (both Sold) Freelander 2 HSE - Sold Freelander 1 - Sold Disco 2 - Sold |
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30th Sep 2020 8:51pm |
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| 90 Dreamer Member Since: 13 Jul 2019 Location: Oop North Posts: 2138 
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And most in the belief they are somehow 'saving the planet'
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30th Sep 2020 9:03pm |
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| custom90 Member Since: 21 Jan 2010 Location: South West, England. Posts: 20294
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^^^^ Very true.
I read earlier something about all vehicles being speed limited from 2022. (Or at least new build). I don’t believe any old article as you never can these days but does anyone know anything about that? Or is it another one of those fake rumour pages. ⭐️⭐️God Bless the USA 🇬🇧🇺🇸 ⭐️⭐️ |
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30th Sep 2020 9:37pm |
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| blackwolf Member Since: 03 Nov 2009 Location: South West England Posts: 17338 
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It would be very difficult to enforce the fitment of speed limiting devices on older vehicles, but it would be a complete doddle to build news cars which were speed limit aware and simply would not exceed the speed limit. I don't really know why this isn't already on the agenda (I suppose in a way it is with the autonomous car developments) since it would be so easy and cheap to do.
It would also be very simple with current vehicle technology to implement a "remote stop" facility for use by law enforcement to eliminate police pursuits of modern vehicles, but the objections to this are far more solid. |
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1st Oct 2020 8:33am |
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| windy81 Member Since: 14 Mar 2018 Location: North Wales Posts: 311  
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on a landrover forum thats quite funny |
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1st Oct 2020 8:58am |
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| lohr500 Member Since: 14 Sep 2014 Location: Skipton Posts: 1315 
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Well perhaps a traditional Land Rover used as the main vehicle in a household is helping to save the planet.
It would be interesting to know how much pollution and global warming is caused by the manufacture, running and scrapping of a new vehicle with an average 13.9 year life expectancy (SMMT Data from 2015 so a little out of date), compared to say a 20 or 30 year old + Defender. Are the exhaust emissions the main contributor throughout the whole life, or does the production and scrapping activity make up the lion's share of whole life emissions? |
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1st Oct 2020 9:32am |
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