Major car workshops’ grip slips

SMALL-TIME motor vehicle workshop operators said, given the opportunity, they were ready to service cars they couldn’t previously attend to because of warranty stipulations.

As part of the conditions of sale, car manufacturers are prepared to honour warranty obligations only if a vehicle is repaired or serviced in garages they approve. This usually means service dealerships aligned to their brands.

Manufacturers are also able to draw extra mileage from their association with vehicle owners by making it compulsory for them to fit spares only from stockists they approve.

But the Competition Commission is attempting to loosen the vice-like grip the big players have over the industry with its report Guidelines for Competition in the South African Automotive Industry.

The draft guidelines, prepared in accordance with the Competitions Act, were gazetted last week and will remain up for public input until March 16.

If approved, it would mean that vehicle owners would have a wider choice of service providers to choose from.

It also means that smaller operators, provided they meet certain requirements, could now fix and service cars and sell original parts to whoever required them.

Sipho Ngwema, the commission’s head of communications, said the reforms had been worked on since 2017 and they had consulted various role players in the industry.

He said the reforms were aimed at combating anti-competitive tendencies and enhancing transformation.

Ngwema said they expected opposition from the National Association of Automobile Manufacturers of South Africa (Naamsa).

“This is a threat to their monopoly and would have a major effect on their bottom line,” said Ngwema.

Michael Mabasa, chief executive of Naamsa, said they were not opposed to the reforms.

However, he was concerned that the commission had raised massive expectations in the marketplace and created an impression that independent workshops were ready to work on in-warranty vehicles.

“This is not the case, because many of the workshops don’t have the necessary tooling or training skills to manage the new generation of highly computerised fleet.”

Mabasa called for the reforms to be introduced gradually so that they would not have a negative impact on the economy.

He said the biggest challenge in the after-market space was the inclusion of the historically disadvantaged.

“Regrettably, the beneficiaries of the reforms would be the white-owned independent workshops because they are better organised and resourced.

“Naamsa is very clear that reforms should favour black-owned firms and we are not convinced that a rushed approach will get us anywhere,” said Mabasa.