DC licensing ATF+4 for aftermarket

Press release posted here:
http://300mclub.100megs42.com/forums/viewtopic.php?p=85382#85382

Will this mean it will cost less? (I assume 'yes'.)

Bill Putney
(To reply by e-mail, replace the last letter of the alphabet in my
adddress with the letter 'x')

 

Thanks for posting. I do hope the price comes down. Also note that ATF+3
is being phased out and that all vehicles, even older ones that were
designed for ATF+3, will use the +4 formulation. I've already been doing
that and have not seen any problems, even in our 1999 T&C minivan.

Bob

 

I recently purchases some +4 at the dealer and the price there has already
come down a bit from last year.

Richard.

 

Geeze Bill, that server they are using is slow as a dog. Until they can get
it together why
don't you use URL's that have some reasonable speed like:

http://www.automotive.com/features/90/auto-news/14413/

Ted

 

I doubt the ATF+4 price slide will accelerate much anytime soon.
Remember D-C is doing this amist anti-trust pressure to the federal
government. (See ILMA's letter to the FTC
http://ilma.org/resources/ftc_dcc_letter.pdf) D-C also has legitimate
reasons to be really careful with the quality and formulation of ATF+4
in addition to wanting to be the supplier. Their newer transmissions
are very sensitive to ATF properties so quality control has to be very
good. So you can bet that the costs of manufacturing ATF+4 should be
higher for the new producers (licensing, quality control checks,
periodic D-C inspections) than it would be for generic ATF fluids.

 

It's not the cost of manufacture that is the problem. Raw crude is selling
at about $1.20 a gallon. I would guess after refining and blending with
the additives, the trans fluid is probably selling at under $8 a gallon.

Now, how do you get from $2 a quart to the $8 quart that it seems to
be selling through the dealer network?

That is the real problem. Standard retail markup is 400% and ATF+4
isn't available outside of a dealership, so a trans shop that uses a lot of
it in customer transmissions has to buy it by the case from the chrysler
dealer. They can't go to whoever they buy bulk motor oil from and
get it from them. Nor can you or I go to a discount auto parts place
that has a lower markup, and buy it from them. Nor can you or I
wait until a regional or national auto parts place puts it on sale.

Ted

 

A couple of points:

(1) It is not selling for $8 a quart. I just called my local dealer,
who is not known for discounting and in fact typically charges full
list, and they told me they are presently charging $4.40/qt. That's
cheaper than the around $5.20/qt. they were charging 2 years ago (I had
read on the forums that the price had dropped a little over the last
year or two, so that is consistent with my local dealer). As a point of
reference, whenever we have discussed (on R.A.M.C.) the wide variation
of dealer pricing of ATF+4 a year or two ago, the worst price I ever
remember seeing posted was $7 - maybe $8 - but that doesn't reflect the
current non-competitive (i.e., non-aftermarket available) pricing. If
everything is linearly scalable, I would say worst-case
gouge-me-'til-it-hurts dealer pricing should be around $6.35/qt now.

(2) ATF+4 is supposedly a semi-synthetic. I'm not sure I know much
about what that means, but since synthetic motor oil costs a bit more
than non-synth, I assume there are some real additional processing costs
to "create" a synthetic or semi-synthetic (again - whatever that means).
Point being that synth motor oil being 4 to 6 times the price of
non-synth, I would think you have to scale your pricing of semi-synth
ATF+4 a bit higher relative to the price of raw crude (to refelct the
retail price of semi-synth relative to non-synth).

With it going aftermarket, the price should drop - which maybe was your
main point (which wasn't clear to me after I had finished reading your
post).

 

The main point I was trying to make is that the bulk of the cost of
each quart is added to the quart by the distribution chain. The
dealer parts department is about the most expensive auto parts
distribution chain there is - and for good reason, the dealer parts
distribution chain must warehouse the most obscure and little-used
part in the car - and as such it's generally a terrible place to buy
a commodity item like a fluid.

Compare Walmart's distribution chain with Mopar. What the consumer
benefits the most by - which is the entire point of the anti-trust laws
by the way - is to have consumable commodities like gasoline, motor
oil, grease and transmission fluid that everyone needs to buy, to be
available for sale through the Walmart's of the world and their distribution
chains.
(while trans fluid isn't normally consumed, since it has to be changed
periodically, you do consume it over the life of the vehicle)

When that happens, those places represent sufficient threat of competition
that the expensive distribution chains either have to lower their prices
to keep the same volume, or just accept the loss of revenue.

Ted