Intellectual property rights on visible car parts in France and rising repair costs

An article in the Wall Street Journal (October 9, 2012) describes a regulation in France that grants automakers intellectual property rights over the external looks of the car, thus guaranteeing that mirrors, bumpers, windshield wipers etc have to be purchased from the manufacturer. The result is a 30 % growth in maintenance costs between 2000 and 2010. A new proposal would eliminate this regulation and increase the participation of independent mechanics. Will the decrease in margins downstream require automakers to raise prices for new cars and will this make the French auto industry less competitive ? Will customers, who might now have to consider certification of their mechanics see a lower cost as a result or will they face more frustration as they attempt to discern the quality of repairs done ? Will automakers who offer long warranties benefit as a result ? Given the absence of such regulations in other countries, will such changes increase or decrease the competitiveness of French automakers globally ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

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