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It is sometimes heard that automobile manufacturers design low-quality parts that wear out or break easily, so that they can make money on the repair or replacement of these parts.

I believe this to be true, and not just limited to automobile manufacturers.

Is there any evidence to support this claim?

  • 2
    Any evidence for your statement? – Henry Mar 25 '11 at 18:50
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    Well, just from personal experience, my Grandma's basement light went out about 5-10 years ago. She had never changed that light bulb since she'd moved in and it looked really old. If she was right about never changing it, it would put the lightbulb at around 50 years old. Since then, she's replaced it twice. – jennyfofenny Mar 25 '11 at 19:09
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    No evidence, just suspicious. – Keith Groben Mar 25 '11 at 19:10
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    The term for this is "planned obsolescence". – dan04 Apr 28 '11 at 10:31
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    @jennyfofenny Well there was the Phoebus cartel, but its sounds like your Grandma's bulb was produced later. – Kelly Thomas Oct 2 '15 at 11:45
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I think this phenomenon is explained by a simple economic rationale:

Manufacturers compete on price, but have to control quality to a chosen fixed standard. For example, it's extremely rare to buy a new car that doesn't start. Cars are clearly quality checked for safety and their parts are made to last at least as long an the warranty. A company would lose money otherwise.

The final step is inspection of the completed cars. Each car undergoes strict inspections of 1,500 to 2,000 different things to make sure the brakes, windshield wipers, lights, and other parts work.
Only after the car passes all inspections is it shipped to the customer.
-- source

So, given a set quality, the competition is on price. Manufacturers will tend to use pieces that are good enough to last, but mostly cheap - cheaper than the competition.

Therefore, in a way you are right, using cheap parts they compete better so they make more money than otherwise - however I would say they are pushed by economic forces and not mere greed.

On the other hand, it just as clear that they use all available dirty tricks, like seriously overcharging for parts (one front lamp 400€?), in the after market. This is where there is basically no competition pressure.

The European Commission’s latest report on car prices shows that prices fell slightly, in real terms, in the European Union in 2009 and also converged within the EU's single market. At the same time prices for repair and maintenance services as well as spare parts continued to rise well above inflation confirming the need for the stricter competition rules in place for the sector since the 1st of June.
-- source

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    I would like to see references. – Shog9 Mar 25 '11 at 20:07
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    Okay, just cause you got that fancy diamond next to yer name, I too would like to see links. ;) – Larian LeQuella Mar 25 '11 at 20:55
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    The trouble with this argument is that it doesn't produce a guaranteed outcome of planned obsolescence unless every consumer is stupid and short term. Some consumers will always value quality and long term reliability and will be prepared to pay for it. Second-hand prices are to some extent an indicator of this and reliable cars hold their value much better (and may make the total cost of ownership from new lower!). So, as long as the reliable ones are easy to spot, some manufacturers will profit by making them. We are not doomed to get cheap crap. – matt_black Jan 10 '12 at 9:28
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    This is a seriously flawed argument. Yes...Car makers compete on price, but the sale price isn't the only consideration. RESALE price has a major effect on cost of ownership, and if a manufacturer designed the car to fall apart after the warranty expired, the resale value would be zero. – Aheho Dec 8 '12 at 3:55
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    It's worth noting that as expertise is manufacturing increases, tolerances become much tighter. older items that were "built to last" are often over-engineered. When the tolerances are looser, to get 95% at the required standard, the average has to be higher. – Baldrickk Dec 1 '17 at 9:40
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There seems to be a serious flaw in this argument, which is that parts used in non-warranty repairs are often not manufactured by the automaker, or sold by dealers. While I can't find exact figures, this NYT article http://www.nytimes.com/2011/02/26/your-money/26shortcuts.html quotes an industry spokesperson as saying that 70% of new car owners take their new cars to independent mechanics, even while they're under warranty. One would imagine that the figure for out-of-warranty cars would be larger still. And of course there are people like me, who do their own mechanical work.

Further, if a part is of such poor design or low quality that it fails while the car is under warranty, that is an expense to the automaker, not a source of profit.

Then of course one might note the existence of numerous independent auto parts stores, selling replacement parts to mechanics and individuals, generally at a much lower cost than the equivalent OEM part can be purchased from a dealer.

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This is a known practice in many industries and is known as planned obsolescence.

According to an anecdotal story told in my intro to businesses course, tt first began a bit over half a century ago when an appliance manufacturer built a neigh-indestructible toaster. They could only sell one toaster per family because they'd never need another toaster. The company eventually went under, and to my knowledge, there is still a warehouse out there filled to the brim with perfectly functioning toasters that will never be sold. The practice was later picked up by the automotive industry which was nearing capacity as well, and are now the most notorious for it.

It is also well known for the iPhones, as graphs of their working speed have shown that updates pushed just before a new iPhone launch will slow down previous models of iPhones considerably.

Planned Obsolescence

  • No, that is not how planned obsolescence works, especially in the auto industry (and these days, in cell phones &c). PO is based on fashion, not function. Companies introduce new models with different styling but little functional "under the hood" difference. Automakers introduce "new" models each year, Apple periodically releases the iPhoneN, and so on. People buy them to be fashionable, even though the older models are often perfectly functional, as for instance my 15 & 29 year old vehicles and my maybe 8 year old phone. – jamesqf Oct 13 '17 at 4:59
  • Jamessqf, fashion is one way to do it, yes, but it is also often engineered that way. When you're a programmer and you're digging through company source code for a product you put out and you find a "If (currentTime > 2010.01.01) {wait 10;}" then you quickly realize planned obsolescence is a thing that happens. (Saw that one awhile ago several jobs ago) – liljoshu Oct 31 '17 at 15:54
  • Of course I'm not claiming that things like that never happen, but they're rare - and as you point out, much easier to do in software - as demonstrated by numerous examples of things that work quite well (or in the case of some particular tech companies, no worse than they originally did) decades after their manufacture. – jamesqf Oct 31 '17 at 17:39
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    @liljoshu fair point, although it is not a relevant statistic. I read somewhere but can’t find the article that it is probable to have some degradation in software, but that was just speculation and not a test. Planned HW degradation? Not likely but possible and proven wrong, in software? I highly doubt it, even due to the chance of being caught – Rsf Dec 5 '17 at 18:35
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    @liljoshu I have worked for a chip maker in the cellular industry and you are more or less spot on. Take for example Flash memory cell decay- cells loose their content over time or become unusable. There are some workarounds around this but phone manufactures prefer not to use them unless it is absolutely necessary, for example if your flash goes into a car and can't be easily replaced. – Rsf Dec 7 '17 at 8:44

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