The right to repair … or not by Nicol Louw

What if you could service your car for less at the independent service centre round the corner without voiding the warranty? Would you?

RIGHT to Repair (R2R) has struck a nerve in the industry by questioning why consumers are obligated to have their vehicles serviced by franchised dealers (outlets endorsed by manufacturers and importers) at exorbitant prices just for the sake of keeping their warranties valid. What’s more, why should buyers need to pay for service or maintenance plans in the first place? Surely, they could be optional and help lower new-vehicle prices? “It should be your choice” is the slogan of the lobby group and, in tough financial times, it resonates.

Let’s place R2R in the “good guy” seat. It can cost up to R70 million to set up a new franchised dealership in a prime location and, of course, business owners need to see notable returns on their investments. Therefore, you are charged R1 000 an hour for labour and inflated prices for genuine parts. Perhaps it is time for an independently run outlet (let’s call this fictional business Joey’s Auto) to get a share of the rushing stream of income? What if Joey’s can do just as good a job as the dealer for less? This is already happening in Europe, by the way.

If we push R2R to the “bad guy” seat, however, the counter arguments stack up. The beautiful sentiments of sharing the wealth with smaller businesses taks sa nose dive when you look at the sponsors of R2R on its website (right2repair.co.za). They’re mostly aftermarket suppliers who’d love to distribute equivalent replacement parts to Joey’s (as opposed to genuine dealer parts). These service centres focusing on the wealth of outside-of-warranty vehicles already have 80% of the national business anyway. Why do they need a slice of the other 20%, too?

What about the manufacturers or importers? Can you force an international company (with the most exacting standards) to honour warranties if there is little or no control over the quality of service on its products? I do not know of other consumer products where this is the case. Would you want to be flown in an aeroplane that was serviced by Joey’s Wings or Boeing? Those high standards, to which approved dealers are strictly held if they hope to get (or keep) franchise agreements, have made it expensive to run dealerships. But, then, if the playing field was level, who would police the quality control of these “other” service centres? Not the Competition Commission. Unfortunately, our country has not covered itself in glory when trying to ensure quality service (Eskom, anyone?).

So the franchised dealers are the good guys, then? They’ve invested in 1 600 dealerships employing thousands of people. Their trained technicians have specialised tools and computerised diagnostics at their disposal to repair complex modern vehicles. The dealerships offer excellent service because you demand it.

Built-in maintenance and service plans represent good value considering you are paying in advance for work and parts that could become more expensive due to inflation and currency fluctuations. South Africans don’t excel at budgeting or managing debt, let alone setting funds aside to service their vehicles. And, remember, the official dealer stamps in the service book of your depreciating asset make it easier to trade or sell.

Franchise dealerships are concerned R2R’S proposals threaten their existence. Have they overplayed their hand with high servicing costs and are the proverbial chickens about to come home to roost? Bear in mind most dealerships are privately owned and need the aftersales-based income to survive.

A problem I see is that no-one asked Joey. Does he want to service new cars? Can he afford the R50 000 diagnostic equipment, R20 000 per year licencing fee and R1 300 per calibration download from a server in Germany? What about the special tools needed to carry out jobs on low-volume vehicles? Then there is the legal situation of disputed warranty claims. If Joey’s Auto should reach an impasse with the OEM, he’ll be lumped with the problem. Joey may be tempted to use pirate parts to increase his profit as he charges only R400 per hour for labour. Another problem is some technicians may never have received formal training.

The industry needs to change. Dealers have to be free to run leaner operations but also charge sensible rates for servicing and parts. R2R may have a point but we live in Africa (not Europe) and we’re simply not ready for such a shift. The industry is too fragile (and important) to sit back and “see what happens”. Allow Joey’s to start with limited, basic servicing of in-warranty vehicles using approved parts only in his certified workshop and let’s take stock again in a couple of years.