Publication: The Independent on Saturday -Personal Finance

Page: 8

Title: Auto industry at crossroads over aftermarketreforms

Publish Date: 14 March 2020

AVE: 311265.24 Author: BRIAN JOSS

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THERE has been mixed reactionto the recent publication of thedraft guidelines for the automotiveaftermarket sector by the CompetitionCommission.

Right to Repair South Africa(RZRSA), which has been advocatingfor consumers to be able to taketheir new vehicles to independent

workshops of their choice withoutvoiding the manufacturer's warranty,has welcomed the guidelines as a “bigwin for consumers”. However, the - ~v allévrt-e;wNational Association of AutomobileManufacturers of South Africa

(Naamsa) is more cautious.The chief executive of

Naamsa, Michael Mabasa, saidthe association and its members

were not substantively opposedto the proposed reforms. "We areconcerned that the conditions are notconducive to bluntly introduce the

magnitude of the reforms. Many ofthe independent workshops are not

equipped to repair or service new-generation computerised vehiclesunder warranty," he said.

"There is a huge skills decit,because the mechanics are nottechnicians and do not have the skillsto deal with vehicles manufactured

today. The commission has nottaken this or the tooling shortageinto consideration, and, as a result, Auto industry at crossroadsthe safety of vehicles will be hugely

compromised."We are concerned that these

guidelines will encourage car ownersto support the fitting of sub-standard over aftermarket reformsparts on their vehicles. This will resultin the importation and proliferationof cheap and dangerous components, Concerns that quality and safety will be compromisedwhich will undermine safety on ourroads,” Mabasa said.

There are 1 853 franchise vehicle BRIAN JOSS

dealerships in South Africa, and theyemploy an average of 45 people perdealership. Many of these employees R INDUSTRY RAFT GUIDELINmay lose their jobs. Some dealershipsmay be forced to close if they cannotreach the targets needed to sustain THE COMPETITION Commission's draft has expired, without voiding the balance about security systems.their operations, Naamsa said. guidelines state: of the warranty. These pans will offer 9 OEMs and dealers must

The deadline for comment on the 0 Car owners will no longer be the same standards of safety and quality provide training to employees ofdraft guidelines is March 16. forced to use the warranty, service and as original parts, but at a lower cost. independent workshops who request

Said Mabasa: “We are sceptical maintenance plans offered by vehicle O Original equipment manufacturers parts» or product-specific training.that the commission will even manufacturers They will be able to (OEMs) must make available to at a reasonable cost that may notlook at our new submissions after go to independent workshops without independent workshops technical exceed that recommended by the

they did a unilateral U-turn during voiding their Warranties. information relating to its motor commission. The training must includewhat we thought were constructive 0 Carmakers and franchised dealers vehicles, on the same terms offered the methods used to effect motor bodyconversations around these reforms. must allow customers to fit non-original to its approved service providers. and mechanical repair, service andIt is always difficult to legitimise a parts when a specific part's warranty However, this excludes information maintenance and fitment works.

process that has been concludedbefore key stakeholders are even given

a fair hearing. We are convinced thatthese guidelines are in their final price of the vehicle. "Dealers and one which gives aftermarket small the genuine parts market, Sambra

version and the commission just finance providers must now give the medium enterprises a chance to said.wants to tick a box that they have buyer details of all inclusions and stay in business. The Competition Naamsa said manufacturers will

given us a chance to respond. We exclusions included in the service and Commission should be commended continue to invest as long as the

are consulting with our members to maintenance plans so customers will on following the international RZR climate is conducive for them to dodecide if our collective input will still be able to choose, making available trend,” said Miwa chairperson Dewald so. It said it has put a master plan inadd value or not,“ Mabasa said. more affordable service options," Ranft. place to transform the automotive

Gumher Schmitz, the chairperson Schrnitz said. Miwa has been "upskilling" its industry.of RZRSA, said the draft guidelines workshops and has implemented “Our ambition is to grow the

were a positive move for the industry COST SAVINGS stringent grading and accreditation automotive industry through theand a “big win for consumers”. The Motor Industry Workshop guidelines, which comply with acceleration of employment of

”This increased transparency and Association (Miwa), which represents industry~set criteria and standards. black South Africans, upskilling offreedom of choice for consumers will more than 2 500 accredited “We are condent our industry can black employees, empowerment

help to grow small business. Lack establishments, from general repair deliver the high standard of repair of dealerships and authorisedof access to technical information to fitment centres, said the draft required,” Ranft said. repair facilities, and substantiallyhas constrained the independent guidelines will, if implemented, Richard Green, the national increasing the contribution of blackaftermarket. open up the market and result director of the South African Motor owned automotive component

"It is encouraging the commission in meaningful cost savings for Body Repairers’ Industry (Sambra), manufacturers within the automotivehas acknowledged that access to consumers, without compromising on said the guidelines would eliminate supply chain.technical information remains a quality and service. antiecompetitive behaviour. “The establishment of the

prerequisite for effective competition Ten years ago, Miwa initiated “It will broaden the pool of R6 billion Automotive Transformationin the automotive aftermarket and is the RZR campaign after gaining repairers significantly which will give Fund (AITF) is already under

removing that obstacle by directing first-hand knowledge from their consumers a much wider choice of way to drive black industrialistoriginal equipment manufacturers European and North American approved accredited repairers. As a participation in the industry,(OEMs) to share key technical counterparts Miwa approached sector we reject any bias and have Automotive Masterplan 2035 is ainformation with independent service the major vehicle manufacturers, always opposed any form of unfair blueprint for many other sectors whoproviders, for both in-warranty and but their muted responses resulted business practice,” said Green. have followed in our footsteps in

outrofewarranty motor vehicles. We in the creation of RZRSA, a non- The implications for parts suppliers developing their own sectoral masterhope the GEMS will remove the prot company to "lobby for an are positive, as the cost of premium plans as confirmed by President Cyrilbarriers not try to make access to environment where consumers vehicle parts is not sustainable, and Ramaphosa during his State of thetechnical information unaffordable," can select where their vehicles are alternative parts manufacturers, which Nation Address,“ Mabasa said.Schmitz said. serviced, maintained and repaired are able, in many cases, to produce “The AITF seeks to address

RZRSA said another win is the during the currency of manufacturers’ parts matching the specications the very same reforms that the

unbundling of maintenance and warranties, at competitive prices and and quality of premium parts, have Competition Commission is forcefullyservice plans from the purchase in the workshop of their choice, and already made signicant inroads into imposing on us.”

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