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Decrease in indexed price of vehicle parts market basket: Mitchell


May 6, 2013   by Canadian Underwriter


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There was a decrease in the indexed price of vehicle parts for the market basket for the first time in the 10 years Mitchell International has been collecting data, according to company’s latest Industry Trends Report — Auto Physical Damage edition.

Damage

Further review showed that the domestic vehicle parts market basket experienced such a decrease that it offset the moderate increases in Asia and Europe, the  company said. 

The Mitchell Collision Parts Price index (MCPPI) was created in 2003 to track inflationary trends in parts use over a period of time. The index was developed by creating a market basket of the 20 most frequently-replaced collision parts.

For the Industry Trends Report, Mitchell pulled data from 2003 to 2012 and created weighted average prices for the parts in aggregate, setting the base year at 2003 and equal to 100.

When Mitchell looked at the Index by Part Type, it found that all part types in the market basket split out by part type saw an increase. Greg Horn, vice president of industry relations at Mitchell points out while this might seem at odds with other findings, part market baskets can behave differently, depending on the market penetration of part type and vehicle mix.

The overall downward pricing trend of the index was led by the larger vehicle car park of domestic vehicles on the road, despite the individual part type inflation, Horn writes in his report. The decrease in the average OEM part price for domestic vehicles was a mere $6.33 ($245.12 for 2012 vs. $258.12 for 2011) but that drove a 0.14 decrease in the overall market basket index, according to the report.

“Our data revealed that the impact of the expansion of competition parts price-matching programs from the domestic OEM’s is driving the decrease in the overall index,” Horn said. 

“This is due to the larger number of domestic vehicles in the US car park, and the overwhelming dominance of new OEM parts selected on the average repairable estimate. It will be interesting to watch this development unfold as we continue to track the number of variables that affect these trends.” 


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