1. www.CAPAcertified.org1 When Quality Counts Not all Aftermarket Parts are Created Equal

2. CAPA Update for the CCIF Who We Are Why CAPA Program Review CAPA’s Success CAPA Responds Aftermarket Parts Reform: The Real Future

3. 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.

4. 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

5. 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

6. 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 monopoly Not stepping in and working to break this monopoly will only lead to higher car repair costs and higher insurance premiums.

7. What Happens in a Car Parts Monopoly? A 1994 Ford Taurus hood costs almost $400 + $350 to install and refinish it. A TV/VCR costs around $250 and 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

8. 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?

9. 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?

10. www.CAPAcertified.org10 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

11. 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

12. Product Quality Certification vs. System Certification CAPA = QS, Product Certification & Continuous Inspection Product Certification QS 9000 ISO

13. 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.

14. Step 2:PART APPROVAL AND CERTIFICATION Only after the factory has been approved can individual parts be submitted for certification Part 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

15. 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

16. 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

17. Hood - Inner Skin Identified for Testing Welds, Weldments, Adhesives Part Properties are Tested

18. Complete destructive testing ensures comparability with car company service parts Part Properties are Tested

19. 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

20. CAR COMPANY SERVICE PART QUALITY STUDY OVERALL RESULTS (1,907 PARTS)

21. 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 Motors46765% Ford44060% Chrysler29547% Nissan14141% Toyota23639% Honda22727%

22. 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

23. 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

24. CAPA Part Tracking Easy & Available to All

25. 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.

26. 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

27. 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.

28. CAPA Encourages Complaints 1-800-505-CAPA www.CAPAcertified.org Written Form: Thousands distributed annually

29. Complaints Received 1995-2002 00.05% 16,771,089 Parts Certified

30. Percentage of Valid Complaints to Seals Applied

31. 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.

32. 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.

33. 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, Metallurgy Product Certification for Automotive Aftermarket Parts, IT, Medical Devices, Machinery, Furniture, Appliances, Lab Equipment.

34. 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.

35. 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

36. CAPA Responds: GM Report on 10 CAPA Parts CAPA 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.

37. CAPA Responds: GM Report GM 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

38. 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.

39. 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.

40. 40 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

41. 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

42. 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.

43. 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

44. 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

45. 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?

46. When Quality Counts Insist on Genuine CAPA Parts!!