Presentation by CAPA at CCIF Vancouver Jan/2003

www.CAPAcertified.org 1

When When Quality Quality CountsCounts

Not all Aftermarket Not all Aftermarket Parts are Created Parts are Created

EqualEqual

Not all Aftermarket Not all Aftermarket Parts are Created Parts are Created

EqualEqual

CAPA Update for the CCIF

Who We Are

Why CAPA

Program Review

CAPA’s Success

CAPA Responds

Aftermarket Parts Reform: The Real Future

Mission Statement

CAPA is a non-profit, third party independent standard setting organization whose goal is to ensure that the market has a high quality, fairly priced alternative to expensive car company parts.

How We Got Here

1970’s car companies stopped changing model designs each year

Independents began to produce alternative parts -- Like mechanical part competitors in the 20’s and 30’s

Collision repairers used these parts in record numbers

How We Got Here

After repair shops created the market, insurance companies started including competitive parts on estimates

Then collision repairers started to complain about safety and quality

The insurance industry responded by creating CAPA in 1987

Why CAPA?

To protect American consumers from a car company parts monopoly and poor quality parts

Car companies spend millions of dollars to discredit aftermarket parts, scare consumers, co-opt body shops and intimidate state legislatures into protecting their monopolyNot stepping in and working to break this monopoly will only lead to higher car repair costs and higher insurance premiums.

What Happens in a Car Parts Monopoly?

A 1994 Ford Taurus hood A 1994 Ford Taurus hood costs almost $400 + $350 to costs almost $400 + $350 to install and refinish it.install and refinish it.

$400

$250

$0

$50

$100

$150

$200

$250

$300

$350

$400

A TV/VCR costs around $250 and A TV/VCR costs around $250 and it plugs in for immediate use.it plugs in for immediate use.

Consumers Know There Is Something Wrong When:

$600 will buy a Pentium 4 computer with color printer, 17” color monitor yet they have to add $300 to get a sheet metal quarter panel from Ford for $900$500 buys a new refrigerator or a Chrysler hood

Questions to Ask About a Part Quality Certification Program

1. Are the parts individually certified for quality?

2. What are the credentials of the certifier?

3. Is a fully accredited, independent test lab part of the process?

4. Is the certification process transparent and subject to public comment?

5. Does the program have clear and precise standards?

Questions to Ask About a Part Quality Certification Program

6. Are the standards available to the public?

7. Is there a mechanism for consumers, repairers and other affected parties to be involved in the standard setting process?

8. Who oversees the development of the standards?

9. Are the parts continually inspected after initial certification?

10. Is the certifier involved in the marketing, sale or distribution of the product?

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Does distributor listing govern CAPA certification?

Only CAPA determines certification

Neither distributors or insurers can decide if a part is to be listed as certified.

Distributors could list part as a CAPA certified part, but only the presence of the CAPA seal actually confirms certification.

CAPA: Answering the Questions

Step 1:FACTORY APPROVAL

A detailed review and audit of the factory and manufacturing processes

Inspection, quality control and operating processes are critically reviewed

An independent body determines whether the quality processes and factory each meet CAPA’s 60+ point quality requirements

Product Quality Certification vs. System Certification

CAPA = QS, Product Certification

& Continuous Inspection

Product

Certification

QS 9000

ISO

Why Factory Approval (Process Certification) is not enough for CAPA

CAPA led the way in process certification by developing and requiring a factory approval process well before the popularity of ISO.In mid 90’s CAPA eliminated facility audits in lieu of QS certification. Within 1 year CAPA was forced to reinstate facility audits.Car companies have had similar problems, so they too are moving away from QS and migrating to TS 16949 which includes more control over the product.

Step 2:PART APPROVAL AND CERTIFICATION

Only after the factory has been approved can individual parts be submitted for certificationPart Approval is a Multi-Step Process

When All Criteria are Met: Part Certified and Seal Affixed

Checking Fixture is Approved

Part Properties are Tested & Approved

Part Passes Vehicle Test Fit

Checking Fixture Approved

Holes: Properly placed

Bodylines: Exactly

match car company

Datum Points: Set at all

critical areas

Mating Components:

Checked against part

Flush: Matches Master

Gap: Matches master

Part Properties are Tested

Material composition Coating performance Thickness Corrosion Mechanical properties Form and fit Paint adhesion

Appearance Adhesive and weld

integrity Fasteners\Hardware Quality Control

procedures Identifying markings

Test procedures are based on nationally recognized tests such as ASTM and SAE

Hood - Inner Skin Identified for Testing Welds, Weldments, Adhesives

Part Properties are Tested

Complete destructive testing ensures comparability with car company service parts

Part Properties are Tested

Initiated April 1999

Dedicated Vehicle Test Fit Facility

Collision repair professionals perform tests

Part Passes Vehicle Test Fit

As of December 31, 2001 all CAPA parts have a vehicle test fit or equivalent

CAR COMPANY SERVICE PART QUALITY STUDY

OVERALL RESULTS(1,907 PARTS)

Passed CAPA Fitand Appearance

Requirements50% (953)

Failed CAPA Fitand Appearance

Requirements50% (954)

CAPA Test Fit Results

1,907 Car Company Parts Tested.50% (954) failed CAPA fit and appearance requirements.

Car Company Quality

Car Company # Tested % Failed

General Motors 467 65%

Ford 440 60%

Chrysler 295 47%

Nissan 141 41%

Toyota 236 39%

Honda 227 27%

What Does this Analysis Tell Us?

CAPA Parts are equal or BETTER than their car company counterparts !!

Pass 100%

Pass 50%

Fail

50%

When compared to car company parts in the market, 100% of CAPA parts meet standards and only 50% of

the car company parts meet the standards

Percent Car Company Service Parts Meeting CAPA

Standards

Percent of Parts introduced as CAPA that meet CAPA

Standards

The CAPA Quality Seal: The Final Step in Part Certification

Tamper Proof Design

Two Parts

Top part stays on part

Bottom part provides proof that a CAPA part has been used

Bar coded for ease of tracking

Each and every part has a unique number

CAPA Part TrackingEasy & Available to All

CAPA Part Tracking

One Seal Number Can: Confirm part certification.Provide part history.Identify lot, manufacturer and application. CAPA’s parts database maintains all testing and inspection information on all parts in the program.Bottom tab of the seal affixed to repair order or estimate provides permanent tracking of the part.

Quality Systems Audits twice per year.Dimensional, Appearance, and Quality Control records inspections on 70 - 80% of lots.Random material testing, Vehicle Test Fits and studies.Complaint investigations.Annual Fixture and Weld Jig Verification.Trend analysis on manufacturer, part number and other critical program elements.

Step 3: REGULAR RE-INSPECTION AND MONITORING

Step 4: MARKETPLACE QUALITY MONITORING

Complaint Program: Providing users with the opportunity for quality input.

Decertification Program: Keeping problem parts out of the market.

Recall Program: Removing poor quality parts from distributor shelves.

CAPA Encourages Complaints

1-800-505-CAPA

www.CAPAcertified.org

Written Form: Thousands distributed annually

1,000,000

2,500,000

4,000,000

5,500,000

7,000,000

8,500,000

10,000,000

11,500,000

13,000,000

14,500,000

16,000,000

17,500,000

Complaints Received 1995-2002

00.05%

16,771,089 Parts Certified

Percentage of Valid Complaints to Seals Applied

0

0.0001

0.0002

0.0003

0.0004

0.0005

0.0006

1994 1996 1998 2000 2002

CAPA’s Success: What CAPA has Accomplished

Accredited by the American National Standards Institute (ANSI), as a standard developer.Developed specific, enforceable, effective standards for metal and plastic body parts and lighting.

CAPA’s Success: What CAPA has Accomplished

Dramatically improved the quality of competitive repair parts bearing the CAPA seal.Provided repairers with a means to reduce total losses and therefore repair more cars.Provided a high quality alternative to expensive car company parts.

CAPA’s Success: What CAPA has Accomplished

Secured one of the nation’s most accredited testing laboratories: Entela, Inc., Grand Rapids, MI

ISO/TS-16949 (World Automotive Standard):First accredited and issued first certificate.QS-9000 and Tooling & Equipment Supplement: USA’s leading Registrar.American Association for Laboratory Accreditation in Chemistry, Mechanical, Electrical, Metrology, MetallurgyProduct Certification for Automotive Aftermarket Parts, IT, Medical Devices, Machinery, Furniture, Appliances, Lab Equipment.

CAPA’s Success: What CAPA has Accomplished

Brought collision repairers into the part certification process:

•CAPA’s Board is led by one of the nation’s foremost collision repairers.

•CAPA’s Board and TC include ASA, SCRS and other industry leaders.

CAPA’s Success: Industry-Wide Acceptance of CAPA

Repairers and other parties are now stating that there is a need for a certification program

The ASA, the largest trade association of repairers in the U.S., has endorsed our model bill on a federal level which would require the use of certified parts

CAPA Responds: GM Report on 10 CAPA PartsCAPA regularly tests car company parts and we’ve accumulated significant data on GM parts:

Overall, 65% of 467 GM parts vehicle test fit failed to meet CAPA’s fit and

appearance requirements.GM report implies that all Pontiac Grand

Am hoods are made the same way.GM report did not indicate if their parts

meet their standards.

CAPA Responds:GM ReportGM implies that CAPA parts are inferior because they did not match GM parts or specifications, yet when CAPA reviewed Pontiac Grand Am hoods, we found:

55% Variation in No. of Adhesive Patches

105% Variation in Surface Area Covered

129% Variation in Minimum Weld Size

CAPA Responds:Consumer Reports

CR supports the goals of CAPA.

CR applauds the changes CAPA instituted

CR said CAPA should expand to cover bumper assemblies.

CAPA Responds:CAPA’s Independence

UL stands alone only after 19 years of dependence on the insurance industry. UL gained this independence because regulations require UL standards.

CAPA has suggested similar requirements on a state level and the ASA has proposed federal certification standards.

CAPA is led by one of the nation’s foremost consumer advocates, Jack Gillis.

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Aftermarket Parts Reform

CAPA has built a strong foundation

There is a tremendous opportunity to embrace and insist on true quality

Each industry segment needs to make a decision regarding CAPA and quality aftermarket parts

Aftermarket Parts Reform: Consumers Support Competition

Center for Auto Safety

Consumer Federation of America

Ralph Nader’s Public Citizen

Consumer’s Union

All are on record in support of CAPA, its goals and/or aftermarket parts

Aftermarket Parts Reform:Collision Repairers Must

Decide that they want to encourage competition.

Decide to use only quality parts.

Reject poor quality.

Look for the CAPA seal.

Aftermarket Parts Reform:Distributors Must

Remember that they have the strongest influence on manufacturers

Decide That Quality Is Really Important

Communicate Decision in Buying Practices

Provide Choice in the Marketplace

Aftermarket Parts Reform:Insurers Must

Develop mechanism that ensures that policy holders get the parts specified.

Monitor the use of parts.

Develop educational programs for staff.

Share importance with policy holders.

Promote your efforts.

Financially support independent certification

The Car Companies win in two ways:

1. They can charge whatever they want for parts.

2. As repair costs escalate and more cars are totaled, consumers are forced back into the market to buy another car.

In addition:

No incentive for car companies to improve quality.

Lack of choice negatively affects all parties.

What Happens Without CAPA?

When When Quality Quality CountsCounts

Insist on Genuine Insist on Genuine CAPA Parts!!CAPA Parts!!