By Bill McDonough, Editor, Body Language
In February I wrote an article warning about the danger posed to the aftermarket parts industry by General Motors’ planned dynamic pricing program, called “MyPriceLink.” The technological challenge of creating such a responsive system of parts and pricing information forced GM to delay the introduction of MyPriceLink several times. These reprieves may have lulled aftermarket parts makers into a false sense of security.
But the potential to dominate the replacement parts industry represented by MyPriceLink – and the huge profits that will surely follow – meant that GM was unlikely to give up on dynamic pricing. And they didn’t. And now it is just about ready to go, with a planned rollout on January 1, 2016.
Brad Desaulniers of PartsCheckLive.com has an opinion on what this will mean to the aftermarket parts industry. He says GM’s dynamic pricing program “could shift [GM’s} market share from 65% to 90% in favor of OEM overnight.” He says companies that manufacture parts for GM vehicles will see their GM parts sales virtually disappear next year unless they take action.
Here is what we do know; MyPriceLink will be price matching on a virtually instantaneous basis. GM will use the pricing information already provided by aftermarket competitors to offer a lower cost while protecting the body shops’ profitability. Where there is no aftermarket part available (such as with patent-protected parts) GM can ratchet up their price to make up for any losses they accept to price aftermarket parts out of the repair process.
Desaulniers believes the only defense against MyPriceLink is to stop sharing your own pricing information, so that GM has nothing to bid against. He makes a good case for taking this dramatic step in a well researched article you can download here.
I urge you to take a few minutes to read this article in order to get a fuller picture of how GM’s dynamic pricing could become a “game changer” for the parts industry. It is in the best interest for all ABPA members to research this issue now in order to come up with a game plan for future action.