Span­ners fly over code for auto trade

Car mak­ers crit­i­cise pro­posed plan for ve­hi­cle re­pair­ers as well in­ten­tioned, but flawed

The Witness - Wheels - - FRONT PAGE - • al­wyn.viljoen@wit­ness.co.za

THE Na­tional As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers of SA (Naamsa) has crit­i­cised as well in­ten­tioned but flawed a vol­un­tary code pro­posed by the Com­pe­ti­tion Com­mis­sion for South Africa’s ve­hi­cle repair, ser­vic­ing and parts sup­ply sec­tors.

The code backs in­de­pen­dent me­chan­ics, of whom some 2 500 are rep­re­sented by the Mo­tor Industry Work­shop As­so­ci­a­tion, (Miwa) who are part of the right to repair mod­ern cars at in­de­pen­dent work­shops.

When Les McMaster, chair of Miwa, launched the right to repair cam­paign in 2013, he said South African laws must change to fol­low the international Right to Repair (R2R) trend.

At the heart of the ar­gu­ment is the owner’s need to have a ve­hi­cle re­paired at lower rates at in­de­pen­dent af­ter­mar­ket deal­ers with­out void­ing the dealer or man­u­fac­turer’s war­ranty; against the orig­i­nal man­u­fac­tur­ers’ need to profit from its in­vest­ment in pro­pri­etary in­for­ma­tion, sys­tems and tested safety stan­dards.

“There is a need for a fair and com­pet­i­tive reg­u­la­tory en­vi­ron­ment that en­ables free­dom of choice for the con­sumers and that gives af­ter­mar­ket busi­nesses a chance to stay in busi­ness,” McMaster has been say­ing since 2013.

The Com­pe­ti­tion Com­mis­sion backs this view with its pro­posed vol­un­tary code for the auto trade, but Naamsa said in a state­ment on Mon­day while the code “ap­pears well in­ten­tioned”, it over­looks a num­ber of re­al­i­ties and im­por­tant con­sid­er­a­tions in the auto trade.

Naamsa said the com­pe­ti­tion com­mis­sion need to take into ac­count the thin profit mar­gins and the “in­tensely com­pet­i­tive na­ture of the industry”.

Naamsa said the au­to­mo­tive industry in South Africa did not de­lib­er­ately ex­clude small medium en­ter­prises from au­to­mo­tive af­ter­mar­ket, repair, ser­vic­ing and parts sup­ply ac­tiv­i­ties. In­stead “mar­ket and com­mer­cial re­al­i­ties” are keep­ing small play­ers out of the loop.

“Any­one can par­tic­i­pate in fran­chise dealer op­er­a­tions,” states Naamsa, as long as they can over­come the “re­stric­tions to par­tic­i­pa­tion”, which in­cluded ac­cess to loans, skilled tech­ni­cians, ex­pen­sive di­ag­nos­tic tech­nol­ogy as well as feet through the door.

“These rep­re­sent mar­ket and com­mer­cial re­al­i­ties and should not be con­strued as anti-com­pet­i­tive,” said Naamsa.

Naamsa said there was also no need for in­de­pen­dent work­shops to vie for a slice of the war­ranty pie, as South Africa has over 11,2 mil­lion mo­tor ve­hi­cles, of which 75% are no longer un­der war­ranty, ser­vice or main­te­nance plans.

“The com­pe­ti­tion au­thor­i­ties should be care­ful to avoid ir­repara­ble harm to an industry which has be­come the suc­cess­ful cor­ner­stone of growth and de­vel­op­ment in South Africa.

“Al­ready, the pub­li­ca­tion of the draft code of con­duct and the as­so­ci­ated un­cer­tainty has re­sulted in es­tab­lished busi­nesses, as well as po­ten­tial new en­trants, plac­ing on hold any ex­pan­sion de­ci­sions pend­ing the out­come of the process,” said Naamsa.

“It is es­sen­tial to safe­guard in­vest­ments of ex­ist­ing and fu­ture par­tic­i­pants in the au­to­mo­tive value chain which in turn re­quires a code which is re­al­is­tic and prac­ti­cal.

“In this re­gard, dur­ing June 2017, Naamsa made a sub­mis­sion to the Com­pe­ti­tion Com­mis­sion on a code of con­duct based on the Rus­sian code with added el­e­ments from the Euro­pean Union and Aus­tralian codes.”

Naamsa be­lieves that the Com­pe­ti­tion Com­mis­sion should re­visit the industry’s ear­lier pro­pos­als in this re­gard, since they ad­e­quately ad­dress in­ter­na­tion­ally ac­cepted prac­tices, the le­git­i­mate in­ter­ests of con­sumers and the ob­jec­tives en­vis­aged by the Com­mis­sion.

More­over, any fu­ture pro­pos­als by the au­thor­i­ties should be sub­jected to a so­cio-eco­nomic-em­ploy­ment im­pact study to avoid neg­a­tive con­se­quences for the au­to­mo­tive industry, the South African econ­omy and the industry’s cus­tomers.

Richard Clarke, chair­per­son of the not-for-profit Sec­tion 21 com­pany R2RSA, told Wheels24 ear­lier this month that deny­ing work­shops the chance to repair ve­hi­cles be­cause of war­ranties and ac­cess to in­for­ma­tion al­lows orig­i­nal equip­ment man­u­fac­tur­ers to mo­nop­o­lise the auto trade.

“If there is no change, work­shops will no longer be able to ser­vice new ve­hi­cles sold in five years’ time,” Clarke warned.

• A copy of Naamsa’s sub­mis­sion to the Com­pe­ti­tion Com­mis­sion may be ac­cessed on Naamsa’s web­site www.naamsa.co.za.

• For more in­for­ma­tion on the right to repair cam­paign, e-mail el­iz­a­beth@r2r.org.za.

“There is a need for a fair and com­pet­i­tive reg­u­la­tory en­vi­ron­ment that en­ables free­dom of choice for the con­sumers and that gives af­ter­mar­ket busi­nesses a chance to stay in busi­ness.”

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