zze86

So the thread about German cars being unreliable led me to think why exactly are German/Euro cars so much more expensive to repair? The labor is expensive, the parts are expensive. Why exactly? More interested in trade pacts, country specific manufacturing incentives and such rather than behavioral economics.

I get that the German/Euro brands are considered (more) luxury brands and commands a price premium but that why does not explain the price differentials between the Germans and Japanese luxury marques like Lexus/Acura/Infiniti.

Why is the labor, which is more locally sourced, oftentimes higher for German brands? They USED to be more complicated but that difference has been cut down significantly in the past couple decades so that the technical knowledge required to work on them should be more parity between the Germans and Japanese.

Why are the parts so much more expensive vs their American or japanese counterparts? Aren't most auto parts sourced out of Taiwan/China nowadays? Even so, shipping used to be a big component of the cost but globalization should have brought those prices down and it still does not explain the price differential between the japanese luxury brands. I mean those parts have to come across an ocean just the same as German parts.

There seemed to be a clear consensus in the other thread that the Japanese tended to be more reliable than the Germans so quality is not an issue.

I admit I have not researched it much myself but figured I'd throw this up for possible insights.

Please discuss.

mosesbotbol

I don't see much a price difference between cars from EMEA vs APAC marques. You have to compare similarly spec'd and built cars. There's not always a direct competitor between the two.

SlowTeg

All depends on the locale. Foreign parts are more expensive than local due to tariffs on goods/parts. Euro dealerships here in the US charge more labor simply because it's a luxury brand here. No different than say a Gucci purse vs Walmart. In Germany BMW/Mercedes/etc. is a domestic and cheaper. Over there Hondas/Toyotas are less common because they are relatively more expensive over there. Another example is Korea. I think foreign cars have something like a 50% tariff in Korea? So only the rich tend to have foreign cars there. Hyundai/Kia is heavily subsidized (and owned) by the Korean govt.

I think you're thinking that things should be balanced because of "free trade." The reality is that free trade doesn't exist in the real world.

white98ls

What about Volkswagen? I'm no expert but I'm pretty sure parts for a Golf are more $ than for a Civic or Focus.

SlowTeg

I honestly don't know. Purely a guess but maybe it has to do with a lot of the parts being foreign (european) brands? Like Bosch, etc and are imported? Everything from Europe seems to cost more, not exactly sure why.

zze86

That's the thing. Nippon, nissin, etc are quality parts. Japan actually seems to be one of the leading high-quality ball bearing manufacturers in the world. They are imported just the same as Bosch (and IMO tend to be of better quality) yet are generally priced less. Are their better/worse trade agreements with the US/Japan vs US/Euro?

SlowTeg

Probably something along those lines, and/or simply Japanese parts are priced less than European parts (because that's what they choose to charge for them), irrespective of quality. Japanese parts are more expensive than US domestic parts in general.

sam_spider

Exchange rates. Euro to dollar & dollar to GBP.

TheDonEffect

Well, that is a very complex question with no simple answer, so here's my anecdotal observations.

Euro parts aren't, as whole, when comparing apples to apples, more expensive than the Asian or American counterparts. Lexus parts, for instance, can and are expensive, right up there with the Euro makes. So when comparing a strut bolt, or suspension bushings, the average pans out to be insignificant. Yes, there will be a part that's exorbitantly high like the E46 M3 suitcase muffler relative to other cars, but similar examples could also be found with Lexus parts. In short, the issue doesn't seem to be as simple as the Euro makes selling the same thing for a lot more. A good example would be like comparing serpentine belts, or batteries, or oil, etc. Like people scoff at how much oil costs for an M3, having to buy a certain Castro oil, but ever price out what Motorcraft 0w50 oil costs for a Mustang (albeit a GT350 lol)?

To expound on that last point, where the difference do seem to show up is with the economies of scale. Japanese makes do a great job in consolidating options into packages, and therefore selling more of the same thing. If you buy a 3 series on the other hand, there could literally be 25 different wheel options, depending on the trim, package, and just straight up individual options, while a Lexus IS may have 10. You apply this same logic to wiring harnesses, computers, etc, you get the point.

As far as labor goes, working on a FWD V6 Lexus can be an arduous task vs a RWD I4 BMW. Things like valve cover gaskets, spark plugs, and belt servicing can be more difficult on a bread and butter Lexus (really a Toyota) as anything from BMW. And as far as per hour costs go, yeah Euro cars tend to be the highest, but Lexus typically isn't too far behind.

Now with all this said, why does it cost more to repair Euro cars? Overcomplication. There are sensors on top of sensors, computers on top of computers, when a part needs to be replaced, then certain systems need to be reset, recalibrated, etc. It's like replacing the keyless fob vs an old school cut key. And then there's poor design, like BMWs mounting and grounding their ECMs on the floor boards in areas likely to get wet, whereas Lexus mounts them off the ground. You couple that with other known common German blunders like having the trough area under the windshield not completely sealed from the interior, and having that trough rely on easily plugged drainage tubes, and well water then leaks into the cabin without a person noticing... and remember all those wonderful floor mounted ECMs? Well, good news, like your iphone, they can dry and continue working... but maybe improperly. And now you have weird electrical issues that cannot be traced. This is just an example of why german cars tend to fair better when theyre treated to a decadent lifestyle of being garaged everywhere they go. If you ever want to read an aggravatingly dumb design, read about the late 90s early 2000s Passat wagons and how the piping for the rear window wiper washer works. It's one long plastic tube from the front to the rear of the vehicle that's prone to cracking, and therefore leak into the interior. Remember the floor mounted ECMs we just talked about?

Or how about mounting a high pressure pump, a known common issue with BMWs, and mounting them under the header.

This isnt to say that the other countries are without their issues as well. Even everyones' beloved Tesla Model S has a front structure that has a support beam that spans the entire front bumper end to end, meaning those corners on your front bumper that are known to get pushed in and just pop out, perhaps only damaging the paint, well the impact bar is immediately behind that area.... and it's part of the whole front structure that spans from essentially the A pillar to the radiator to the A Pillar... made of ALU, that gets bent, and oh btw you cant weld on a Tesla... so yup whole front structure needs to be replaced for parking lot bump. 10-15k plus 2-5 month down time vs. what... 500-1000 and 1-3 days? Tesla is aware of this issue, and believe or not they really want to make the repair costs to their cars on the low side of the industry, they benchmark Toyota's assembly process accordingly and NOT Euro cars. The front bumper cover is remarakbly similar to any Japanese cars, and not like German cars. But there's always growing pains.

SlowTeg

^Nice post. It's definitely a complicated answer.