Cost of Car Parts


#1

I own a 2013 Ford Fiesta which is, I believe, the cheapest Ford car sold in the U. S. Below is a chart of 12 randomly chosen parts (except for 2 that were intentionally chosen) from the Fiesta. Also included is the cheapest functionally identical part Ford currently makes. These are all current prices or were current about 3 months ago.

Question:
If it is possible, for example, to manufacture a horn for Fusion for $16.74, why is it NOT economically possible to manufacture a horn for the Fiesta at the same or lower price? Same question for all the other parts

Fiesta Cheapest
$17.11 $17.11 IGNITION SWITCH
$14.60 $14.60 Cruise Control Switch
$14.35 $14.35 Headlamp Switch
240.12 175.12 SIDE IMPACT INFLATOR MODULE
$221.06 $156.34 Alternator
$580.27 $149.96 FUEL TANK
$94.86 $33.79 Fuel Pump
$27.72 $16.74 HORN
$69.48 $48.35 TAIL LAMP ASSY
$47.08 $33.03 WIPER MOTOR
$282.73 $102.64 Headlamp Assembly
$254.22 $126.66 Seat Back Cover
$1,863.60 $888.69 TOTAL

2011 2016 Ford Fiesta IGNITION SWITCH AA6Z-11572-A $17.11
2011 2016 Ford Fiesta IGNITION SWITCH AA6Z-11572-A $17.11

2013 2016 Ford Fiesta Cruise Control Switch AV1Z-9C888-A $14.60
2013 2016 Ford Fiesta Cruise Control Switch AV1Z-9C888-A $14.60

2014 2016 Ford Fiesta Headlamp Switch D2BZ-11654-B $14.35
2014 2016 Ford Fiesta Headlamp Switch D2BZ-11654-B $14.35

2014 2015 Ford Fiesta SIDE IMPACT INFLATOR MODULE D2BZ-54611D10-A 240.12
2005 2012 Ford Mustang SIDE IMPACT INFLATOR MODULE BR3Z-63611D11-A 175.12

2014 2016 Ford Fiesta Alternator BV6Z-10346-G $221.06
2002 2007 Ford 500 Alternator 2F1Z-10V346-BBRM $156.34

2013 2016 Ford Fiesta FUEL TANK AE8Z-9002-D $580.27
2013 2016 Ford Fusion FUEL TANK EG9Z-9002-F $149.96

2014 2016 Ford Fiesta Fuel Pump D2BZ-9H307-C $94.86
2013 2016 Ford Fusion Fuel Pump DG9Z-9275-A $33.79

2011 2016 Ford Fiesta HORN BE8Z-13832-C $27.72
2013 2016 Ford Fusion HORN DG9Z-13832-A $16.74

2011 2013 Ford Fiesta TAIL LAMP ASSY BE8Z-13404-A $69.48
2005 2007 Ford Focus TAIL LAMP ASSY 5S4Z-13404-AA $48.35

2011 2016 Ford Fiesta WIPER MOTOR BE8Z-17508-B $47.08
2012 2016 Ford Focus WIPER MOTOR BV6Z-17508-B $33.03

2011 2013 Ford Fiesta Headlamp Assembly BE8Z-13008-A $282.73
2001 2011 Ford Crown Victoria Headlamp Assembly 4W7Z-13008-A $102.64

2014 2016 Ford Fiesta Seat Back Cover CE8Z-5466600-DB $254.22
2010 2012 FORD TAURUS Seat Back Cover BG1Z-5464416-JA $126.66

2014 2016 Ford Fiesta Seat Back Cover D2BZ-5464417-MA $1,208.86


#2

Wow, that’s a lot of research.

Simple answer: volume. Not as many cars use those higher-priced Fiesta parts as use Taurus or Fusion parts, I bet.


#3

I would hazard a guess that the more popular the car, the less expensive a particular part. Back in the early 1960s when I was thinking about buying a car, a,mechanic who owned the garage where I mowed the yard and did cleanup work advised me to buy a Ford or Chevy because the parts were more plentiful and cheaper. At that time, one could go through the Sears catalogues and find that even remanufactured engines were cheaper for Fords and Chevys rhan other makes. When I owned a a Ford Maverick years ago, the parts were cheaper for it than the Rambler it replaced. The Maverick was a cheap car to keep on the road and repairs were easy to do. The ride was so bad that the money I saved in upkeep went for Preparation-H to keep me going.


#4

+1 to @texases Volume is a huge driver in cost. Setting up to make a part can be very expensive. A mold for a plastic part could cost over $100,000. If a part has three sub assemblies in it you have a lot of cost before you have even made the first part. The more parts you make the more you can spread the cost of set up. If you are only making a few thousand parts the set up cost per part is pretty high, if you are making tens of thousands of parts, the cost per part goes down.


#5

Agree! Volume is the key here. If you buy a high volume car, the parts will be less expensive than an equally priced class low volume car.

The effect is even more dramatic in the AFTERMRKET. Parts for a Corolla are easy to find and competitively priced. But parts for a low volume seller in North America will either not be available in the aftermarket or be higher priced.

Ralph Nader in his book “Unsafe At Any Speed” was highly critical of GM for selling a Corvair, which weighed less than 2/3 that of a regular Chevy, for only a few hundred dollars less. Only lawyers would believe that cars are priced by the POUND! The value of Blue Cross (workers health costs) in any car exceeds the value of the steel used to make the car.

Factors affecting prices are volume, complexity of the part, any royalties to be paid, type of material used, distribution costs, and a few others. But volume is the most important cost factor. Tire manufacturers have a tough time since smaller tires are supposed to sell for less money then larger tires, regardless of production costs. They juggle their price schedules so that they make an overall profit, but probably don’t make much on very small 13" & 12" tires.

I’m not referring here to artificially putting a higher price on an identical part that’s used in a luxury car. A Chevy Suburban and a Cadillac Escalade have many common parts, but the Escalade’s parts are higher priced since that is what the market will bear!


#6

I think volume is the answer. I get so angry at these giant corporations. I think if ole Henry came back, every executive would be looking for a new job the next day.

Henry wrote an excellent book My Life and Work. This is what he had to say:

It is considered good manufacturing practice, and not bad ethics, occasionally to change designs so that old models will become obsolete and new ones will have to be bought either because repair parts for the old cannot be had, or because the new model offers a new sales argument which can be used to persuade a consumer to scrap what he has and buy something new. . . .

Our principle of business is precisely to the contrary.  . . .  The parts of a specific model are not only interchangeable with all other cars of that model, but they are interchangeable with similar parts on all the cars that we have turned out.  . . .

Ford, Henry, and Samuel Crowther. My Life and Work. Garden City, NY: Doubleday, Page, 1922. pp. 148 - 149, Print.

Seems to not be the principle of business today.


#7

And the last entry in the list is crazy. A picture of it is below.
$1,208.86 for that


#8

Manufacturers do try and use common parts where possible. It’s not a Model A or T that has virtually no space constraints. Lots of parts that fulfill a common function must be designed differently due to various pressures like space constraints for example.

Re: seat back being ludicrously priced-
So, how many replacement seat backs do you think they actually sell? How long are you holding that seat back hoping someone buys it and paying taxes on it every single quarter it sits in your inventory? How much warehousing floor space does a seat back take versus say, a horn?
What is your price/ft2 for that warehousing?

An owner of a luxury car is obviously more financially capable than someone that buys an econobucket. They also have higher expectations for quality and performance. Are you going to put the same parts into both of those applications?


#9

Back in the early 1960s when I was looking to buy my first car, my mechanic friend said to stick with the Fords and Chevrolets. These were volume cars at the time. If he were alive today, I think he would say “stick with your Civics and Corollas”.


#10

I don’t understand the anger. It’s cheaper (per item) to design, make, track, and stock 100,000 of something than 1,000.


#11

Back in the 1940s, 50s and 60s, each division of GM had its own engines and the parts didn’t interchange. The 1956 Chevrolet V8, Pontiac V8,. Oldsmobile V8, Buick V8 and Cadillac V8 engines were all different. Chevrolet parts cost less than parts for engines of the other divisions because the Chevrolet sold in bigger volume. That was one reason that after a couple of years the Chevrolet, which initially cost less, fetched a higher price as a used car than the same year Pontiac, Oldsmobile or Buick in equivalent condition. Tom McCahill advised to buy an unpopular new car when it is became used car because of the depreciation. IMHO, that is only partially true. For certain years, a Mercury was a reskinned Ford with all but the body parts the same. Yet, a used Mercury would bring less than the same year Ford in equivalent condition, making the used Mercury a good buy. On the other hand, I once owned a 1955 Pontiac. I paid less in 1962 than I would have paid for a1955 Chevrolet in equivalent condition… Yet, parts were pricier for the Pontiac than the Chevrolet. I owned a 1965 Rambler that I,owned through graduate school. The Rambler dealer had gone out of business before I enrolled. For some parts, I had to pay to have them shipped from a Rambler dealer 50 miles away and the part without shipping cost more than the equivalent part for a Ford or Chevy.


#12

I am with Texases- I don’t understand the anger or the point of all that listing of parts. How often are you going to purchase any of those items anyway.


#13

Compare today to 20 years ago. No internet, no ebay, no amazon, no rockauto. Parts are WAY cheaper today!


#14

Really off kilter comparison . .cost of car -vs- cost of parts.
do NOT attempt to single ot Ford for this.
If you’re going to do that much research . . keep looking at ALL brands.

When was the last time you bought a cheap printer for your computer . . THEN tried to buy. . INK !


#15

Parts pricing is a delicate balance between maintaining customer loyalty and profit. Too high and your reputation will result in decreased market share. If you don’t supply parts long enough the news travels and you lose product sales.

My late father in law had a neighbor who had recently arrived from Italy. He bought a Rambler because he could not embrace full size 60s Detroit cars, and he wanted to save gas. He was really disappointed when his frugal Rambler required more expensive parts than my father in law’s large Pontiac Catalina. Furthermore because of the low Rambler sales volume there were few after market parts available; he went to the dealer for a muffler.

In industrial equipment where the manufacturer supplies all the parts, parts sales are typically 15% of sales but represent 50% of the company’s profit. Nothing immoral about that. Some companies like Caterpillar and Waukesha will supply parts forever and their equipment lasts a long time. I took a ferry in Holland across the Rhine in the 70s and that boat had a pre-war Caterpillar diesel.

In contrast with this there are some appliance makers who after 10 years will not supply any parts. A few years back a reader wrote into Consumer Reports stating that his GE wall oven at 9 years needed a part and was told by the service dealer that the parts were no longer made or available. Sears will say they service your Kenmore equipment for 10 years but no promise beyond that.

We have a large GE microwave oven that is now 10 years old and works fine. The service center is closed and that division was sold to MABE of Mexico who have no intention of servicing it. GE is unloading its large appliance division and the likely buyer is Electrolux of Sweden (they can’t sell to Whirlpool because of Anti-Trust laws) whose service record is dubious. I advise anyone not to buy any GE appliances because of this uncertain future.

The after market is a good thing for car parts, since they find a way to make popular parts long after the manufacturer has lost interest. The local Chrysler dealer here has a parts clerk who gleefully tells you that a part for a11 year old car is “OBSOLETE”. This obnoxious term is used in normal business practice and has steered me away from any Chrysler products. This dealer will refuse to stock or even look for a part. that old.

The problem generally is body and trim parts since you need the molds and dies to make those. Luckily there are many “recycling yards” where you can get good body parts from wrecks.


#16

In defense of the car dealers I might point out several things.
The largest markup on the part is between the car manufacturer and the dealer.

People get irate because a certain part is not longer available from the dealer and in many cases that is not only out of the dealer’s hands but also the car manufacturer.
The supply runs low and the supplier who manufactured that part has likely gotten rid of the tooling used to make it and is not going to start the production line up again for a few hundred parts; much less one or two.

That’s the same reason the aftermarket doesn’t provide certain parts for certain cars. Not enough of a market to justify the production expense.


#17

If the original poster really wants to get his undies in a bunch, nearly ALL those parts actually cost 12% of their sale price to make. The markup is about 8 times cost.

As spare parts orders come in the maker of the horn, for example (Ford doesn’t make horns), gets to sell it for about double the production price because of many factors. When he gets an order for 12 replacement horns (after that horn goes out of production), he can’t run these economically at just 12, he makes 500 which is still more expensive than running 5 or 10000 horns. He has to warehouse the 488 parts NOT ordered and HOPE Ford orders more. Each horn get boxed up instead of being shipped in re-usable trays on pallets so there is extra cost there.

They are shipped to Ford’s warehouse where each horn sits waiting for a dealer to order one because when you NEED a part, you can wait weeks for the horn supplier to make a run. The cost doubles again so we are now at 4x original cost. Slow moving stuff gets a bigger markup, 5X and more because some of those parts are going to SIT in that warehouse for a LOT longer than others.

So now the dealer needs to get the part, some of which THEY stock because they are fast movers. The dealer price is again doubled to 8X for retail customers and discounted 15% of that for trade. Again slow movers get marked up more because the dealer’s warehouse space isn’t free either.

It is along path from the maker to the user with LOTS of cost in the middle. Warehouses aren’t free nor are the people who pick the parts to order or truckers who carry it.


#18

The concept is called “economies of scale”.

The more of an item a manufacturers produces, the less it costs per unit. And when a buyer can order 200,000 units, the manufacturer can make them each far, far cheaper and the buyer has the power to get the price as low as possible still.

Processing an order for, “tagging”, and shipping one individual unit is extremely expensive. Doing a small additional run for replacement parts after the production run is complete is ridiculously expensive. Ergo, you pay to the nose.


#19

I had a 79 Dodge Colt that cost about $5k when new. When the vacuum advance stopped working, I went to the dealer for a new diaphragm. It was $27.12. I got kicked out of the parts department when I asked the guy how they could sell a car for $5k that had $50k worth of parts in it.


#20

Even cheaper volume cars may have some parts more expensive than higher priced car. For example, my 1971Maverick had air conditioning and power steering. It required a matched pair of belts and each component: water pump, alternator, air conditioning compressor, and power steering pump had a dual belt pulley. The matched pair of belts cost much more than if three single belts were used for the alternator and water pump, power steering pump and air-conditioning compressor. Another example from the past: the low trimline of the 1965 Rambler had vacuum wipers and the higher trimlines had electric wipers. A fuel pump for the low trimline cost much more than the fuel pump for the high trimline. The reason was that a vacuum booster section was needed for vacuum wipers so they would operate steadily under acceleration. With electric wipers, the fuel pump did not have a.vacuum booster section.