Vehicle repair industry faces overhaul

The Competition Commission is concerned about anticompetitive conduct in the automotive aftermarket and has published far-reaching proposals that will shake up the industry.

The proposals were contained in a draft code of conduct gazetted for public comment on Friday that aims to transform the sector and encourage greater participation of historically disadvantaged individuals.

Once finalised, the code will bind the car manufacturers, government bodies, industry associations and insurers that will be signatories to it.

“The code of conduct is intended to address competition concerns arising from agreements between original equipment manufacturers and dealers, insurers and repair and maintenance service providers which have the effect of substantially lessening or preventing competition and which have created barriers to entry in the automotive industry,” the draft code said.

Of concern to the industry will be the proposal to remove restrictions that stand in the way of small, independent and historically disadvantaged service providers from undertaking service and maintenance work while a vehicle is in warranty.

Historically disadvantaged individuals and independent operators should also be able to undertake in-warranty autobody repairs. Service and repair work on vehicles under warranty is currently conducted by dealers accredited by the vehicle manufacturers.

The code proposes that original equipment manufacturers provide access to the safety and technical specifications of their parts to enable independent service providers to undertake these repairs.

Original equipment manufacturers should also give these providers access to their tools through leasing and renting options and must train these providers to do the work.

The commission wants to remove the “onerous requirements” that prevent historically disadvantaged individuals from owning car dealerships.

The code also proposes that equal-matching parts approved by the South African Bureau of Standards, in addition to the parts of the original equipment manufacturers, be used in repairs without this resulting in the loss of the warranty.

National Association of Automotive Manufacturers director Nico Vermeulen did not want to comment on the specific proposals, but said the industry would evaluate the code in terms of its effect on the economy and against international norms and standards.

Comments on the code have to be submitted by November 3.