Right to Repair – Opportunity or Unintended Consequences?
On the first Tuesday of November, 2012, voters in Massachusetts overwhelmingly approved a ballot initiative called “Right to Repair.” The Right to Repair law promises access to diagnostic, service and parts information for car owners and service stations/independent repair facilities (IRFs). Perhaps it’s not surprising that manufacturers (OEMs) opposed the measure, claiming it adds cost, complexity and uncertainty to the already fragmented environment of automotive service and support. OEMs claim that:
- Costs will increase as OEMs must standardize and reveal more vehicle data to ensure compliance with new laws throughout the life of a vehicle
- Complexity will increase as OEMs must open up additional channels of support to IRFs that are not necessarily “trusted” by the OEM
- Uncertainty will increase as OEMs lose the visibility they get from dealers about how vehicles are behaving in various environments, which raises warranty, performance and liability concerns
Consumers may see new car prices increase to accommodate OEM costs associated with Right to Repair compliance. This is especially true when considering that certain aspects of Right to Repair are retroactive to the 2002 model year and all aspects are fully imposed on 2018 vehicles. (Click here for another view on the impact of Right to Repair.)
While the margin of victory for Massachusetts’ Right to Repair law was huge, 86% in-favor and 14% opposed, the fact it was passed isn’t surprising given that the name sounds so patriotic, Right to Repair. After all, to vote “no” sounds like you’d be voting against choice and Americans cherish their freedom of choice above almost all others.
The Right to Repair law is more complex than the title makes it sound, however now that the law has passed the difficulty of OEM compliance is irrelevant because failure to comply carries some very expensive penalties. Therefore the challenge for OEMs is to figure out the most cost-effective way to comply with Right to Repair.
The most pressing task for OEMs is to figure out how to get the required service and parts information up on the web, in a way that makes it accessible to IRFs while also protecting their intellectual property. To this end, an electronic parts catalog (EPC) that combines diagnostic, parts and repair information integrated with ecommerce and order management technology would do the trick. Such a solution would allow IRFs to access required information and also open up a new revenue stream for OEMs where IRFs are directed to a nearby (or preferred) dealership to procure the parts they ordered. In this way, OEMs could actually augment their franchised dealer’s parts business by expanding their role as a distributor.
The use of single sign-on (SSO) for the EPC would improve tracking of IRF access to ensure Right to Repair compliance and also automate many aspects of parts procurement. One area of interest might be the ability to download electronic control unit (ECU) and programmable control module (PCM) software updates/revisions, which are often tracked with unique part numbers, and then to help the IRF automatically upload those revisions into the vehicle. Throughout this process, franchised dealers could expand their business as regional consultants and training facilities for the IRFs working on the OEM’s vehicles.
Finally, an online EPC can collect a lot of data about who is accessing the web-based system and what problems, parts and documents are being researched the most – including an analysis of pricing requests/quotes. In a very short period of time this becomes a treasure trove of information about the OEM’s vehicles and Big Data analytics can be employed to reveal even deeper insights about warranty, performance and liability concerns.
Clearly the Massachusetts’ Right to Repair law is ushering in dramatic changes for the way OEMs support dealers and IRFs alike. However OEMs that view Right to Repair as an opportunity, rather than an obstacle, can find themselves ahead of their competitors in more ways than one.