Wireless technology and data collection are quickly becoming integral parts of today's "connected" vehicles. These innovations have the potential to provide motorists with access to a wide range of entertainment and information services, as well as safety benefits and improved repair and maintenance. However, there are important concerns that must be addressed. For instance, who owns the vehicle data? Does the manufacturer or driver control the data? How are manufacturers using the data? Are vehicle owners made aware of data sharing when they purchase the vehicle?
Currently, all data generated by the vehicle, including repair and GPS information, is sent directly to the vehicle manufacturer, providing them – and only them – with the opportunity to direct service business to their franchised dealers or other third parties of their choice. Depriving drivers of choice in service and degrading competition will raise costs for consumers and threaten the viability of the independent auto care industry — an important cog in the U.S. economy.
The auto care industry believes that the data generated and transmitted by a vehicle belongs to the vehicle owner, not the manufacturer. If consumers have full knowledge and control over this data through a secure, standardized format, we can preserve transparency, competition and choice in the industry, without sacrificing the benefits of these new technologies.
Auto parts and components are increasingly utilizing embedded software that takes the place of mechanical functions. Today's engines, transmissions, ignitions, brakes, emissions systems, windows, air vents and even windshield wipers are just a few of the systems for which manufacturers have replaced purely electro-mechanical parts with microprocessors and software controls. Vehicle manufacturers argue that this embedded software is protected intellectual property under the Digital Millennium Copyright Act (DMCA) and therefore access to this software is only available via their permission.
U.S. patent law protects consumers' right to repair their motor vehicle themselves, or choose a trusted technician to perform the work for them. Cleaning, repairing and refurbishing parts or replacing worn or broken parts has always been considered permissible under the law. Congress passed the DMCA to provide IP protections for expressive works, such as movies or music – not enable original equipment manufacturers to design systems that prevent replacement of functional software and parts. While unintended, DMCA is being used to stifle competition in the vehicle repair industry. Congress and the U.S. Copyright Office must take immediate action to clarify that vehicle owners and authorized third parties can continue to access embedded software for purposes of repair and maintenance.
Unencumbered Movement of Auto Parts Around the World
The $392 billion auto care industry relies on a complex, international supply chain that ensures American drivers can obtain quality, affordable and prompt vehicle parts and service. Therefore, while the industry recognizes the need to protect U.S. manufacturing and jobs, trade barriers that inhibit the ability of domestic companies to import finished goods, components and raw materials have a negative effect on both business and the motoring public.
In the case of the North American Free Trade Agreement (NAFTA), the industry recognizes modernization through renegotiation is needed, but complete withdrawal or major revisions to auto rules of origin would cause significant harm. The auto care industry views NAFTA as essential, not only for U.S. companies looking to deliver affordable products to American consumers, but also for making North American-produced goods and services more competitive around the world.
In addition, the industry joins the business community at-large in opposing the Administration's tariffs on imports of steel, aluminum, automobiles and auto parts. Imports of these products are necessary in order to keep prices affordable and U.S. companies competitive. Plus, domestic manufacturing capacity cannot meet the current demand. The proposed tariffs will cause U.S. companies to revise their existing supply chain networks, thus raising prices for consumers and putting industry jobs in jeopardy.
In recent years, vehicle manufacturers and their franchised dealers have pursued an increasingly aggressive strategy aimed at growing the sales of their original equipment (OE) replacement parts and repair services. Their goal is to discredit the quality of aftermarket parts by suggesting that the use of such parts could result in the invalidation of a vehicle's warranty. This action violates the Magnuson-Moss Warranty Act, which clearly states that manufacturers may not tie any warranty to the purchase of OE parts or service.
Connecticut has passed legislation mandating that at the time of sale for a new motor vehicle, the dealer must deliver to the purchaser of that vehicle a printed explanation of Magnuson-Moss. Other states are reviewing similar bills that would require either the dealer or automaker to inform the consumer of their warranty rights under the law.
Navigating the ever-changing tax policy landscape can be a daunting task. The Auto Care Association has chosen to focus on a number of key tax provisions with the goals of establishing tax consistency across business types and reducing both cost and regulatory burdens. Preserving the Last-In, First-Out (LIFO) accounting method, repealing the Estate Tax, endorsing a national online sales tax policy and calling for equivalent reductions in tax rates across C-corps, S-corps and pass-through businesses, constitute the key policy objectives.
The Auto Care Association has been at the forefront of lobbying for small business healthcare reform for many years. With the passage of the Affordable Care Act in 2010, our efforts have shifted to repealing the most onerous provisions of the law, specifically the employer mandate and Health Insurance Tax (HIT).