Automotive aftermarket body appeals for financial support in time of crisis
SA’s Retail Motor Industry Organisation (RMI) has appealed to government for’ s funding wheels turning to help post-lockdown. keep the automotive aftermarket industry
Jakkie Olivier, CEO of the RMI, is concerned about the sustainability of the sector and warns that the economy could grind to a halt without the ability to maintain or fix cars, taxis and buses. “The economy in SA — and globally as well — is heavily dependent on an effective automotive repair and maintenance sector covering each town or city across the country’s wide geographical areas,” he says.
Olivier maintains there are thousands of cars locked down unfinished in workshops and repair shops across SA, which could affect the mobility of many South Africans out of lockdown. He also cautions that even when the lockdown is lifted, there is no guarantee when these businesses will be able to trade effectively due to uncertainty over the availability of automotive parts, many of which are imported.
“The effect is being felt across all our businesses from the micro and small enterprises through to the medium and larger businesses. There is an urgent need to protect this ‘essential’ sector and ensure it not only continues to function, but also maintains its significant apprenticeship and trainee programmes,” he says.
Olivier says about 80% of tyre, parts and accessory retailers, and repair and servicing outlets, are small to mediumsized businesses.
“In the current economic slowdown, these are the businesses that have the greatest potential to generate employment post-lockdown,” he says.
He quoted findings from the pre-lockdown Covid-19 National Small Business Survey released by the National Small Business Chamber (NSBC), which highlighted deep economic challenges facing small businesses during these unpredictable times.
Mike Anderson, NSBC CEO, said that small businesses are facing insufficient cash flow due to a poor flow of customers and a significant drop in sales. This was before the lockdown, and the crisis deepened with the Covid-19 situation.
Olivier said a significant number of retail automotive businesses are under severe pressure to pay their creditors and their employees.
He said he supported the need to safeguard the health of South Africans but appealed to government to recognise the critical role the automotive aftermarket industry is playing in keeping the economy ticking, and the need to prioritise an alternate funding mechanism/ capital injection before it is too late and businesses closed.
Olivier told Motor News he wasn’t formally applying for support from the Solidarity Response Fund set up by President Cyril Ramaphosa. He hadn’t yet engaged directly with government and his was more of an open call for the state to help sustain businesses and employees in this critical sector.
The RMI failed in its earlier bid to declare retailers of tyres and spare parts, as well as repair shops, as essential services during the lockdown. Repair shops are, however, on standby to look after emergency vehicles such as ambulances, fire engines and police cars.
SA ’ S ECONOMY IS HEAVILY DEPENDENT ON AN EFFECTIVE AUTOMOTIVE REPAIR AND MAINTENANCE SECTOR