Chained workshop doors thrown open
Boost for SMMES and black-owned firms as independent suppliers now allowed to maintain warranty vehicles
Game-changing new guidelines for the lucrative automotive aftermarket sector will throw open previously chained workshop doors for entry to and participation in SMMES and black-owned firms.
Thabo Shenxane, CEO of the Automotive Industry Development Centre in the Eastern Cape (Aidcec), said the Competition Commission’s published guidelines for servicing and maintenance of vehicles in SA “would be instrumental in delivering massive progress on targets set by the SA automotive sector to grow and transform the automotive supply chain”.
Shenxane said the guidelines require industry players to adopt strategies and develop business models that enable small, independent and historically disadvantaged service providers to undertake service, maintenance and repair work while a vehicle is in warranty. In addition they encourage more black people to own dealerships.
“The targets set for growth, transformation and localisation in the SA automotive master plan were dealt a heavy blow by the economic impacts of Covid19 but these new guidelines create an opportunity for real progress.”
The guidelines include removing restrictions imposed by the automotive industry on vehicle owners as to their choice of service providers for service and maintenance as well as for replacing parts.
They also require fair allocation of repair work by insurers to service providers on their panels and promotion of consumers’ rights to use original or non-original spare parts during the lifespan of their vehicle.
The guidelines also require removal of original-equipment manufacturer restrictions in the sale and distribution of original parts in the purchase of maintenance and service plans and access to training and technical information by independent service providers.
Shenxane said some of the measures proposed in the guidelines would have cost, staffing and legal implications for participants in the automotive industry but these would be “balanced against a fairer system of trade promoting inclusiveness and consumer choice”.
In December 2020, the Competition Commission issued the final guidelines for competition in the automotive aftermarket.
Shenxane said: “It was a culmination of extensive consultation and advocacy work that the Competition Commission has conducted since 2017.
“It followed numerous complaints from various independent players and members of the public.
“These parties raised concerns about alleged anticompetitive practices that excluded independent players in the automotive aftermarket.”
Shenxane said Aidcec had worked with the commission in optimising implementation of the guidelines.
“To this end the commission is still conducting a series of virtual workshops across the country to ensure the readiness of both consumers and independent service providers.”
Aidcec is an implementing arm for the Eastern Cape government’s development plan.
Filum Ho, CEO of automotive parts and service provider Autoboys, said vehicle owners won’t be locked into restrictive embedded motor or service plans, and vehicle manufacturers won’t be allowed to void warranties if owners choose to go with an independent service or repair provider.
He said SA was unique when it came to embedded motor and service plans.
“This is why the Competition Commission started the process in 2017 to bring our country more in line with the US, Europe and Australia.”
He said a major change was that consumers were no longer compelled to use service plans for new vehicles, said to make up to 20% of the dealer price. Should consumers choose to accept the service plan, it must be detailed.
The Competition Commission’s plan will have teeth.
After implementation in July, consumers finding suppliers not adhering to the new laws can lay an official complaint with the Competition Commission.
Complaint forms will be on the commission’s website.
Alternatively, consumers can contact the Right to Repair SA organisation via their website, www.right2repair.org.za.