Major car workshops’ grip slips
DURBAN: 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.
Riaz Haffejee, chief executive of Sumitomo Rubber SA (Sumitomo Dunlop) welcomes the proposed changes. He said: “It is important for consumers to have freedom of choice when it comes to the maintenance of their cars and the new guidelines will allow for this to happen. However, there is also a responsibility for consumers to maintain their vehicles to a standard. Vehicle manufacturers design, engineer and build cars very carefully for a reason. All components and serviceable items need to be replaced within specification. From a tyre point of view, it is important to ensure that the specifications of the tyre are equivalent to the manufacturer’s specifications such as tyre size, load index and speed rating. Cheaper tyres must not mean a compromised safety or performance result and I don’t think this is the aim of the guideline.
“For Tyre retailers and manufacturers, there is a greater responsibility to deliver the correct advice and to educate consumers on the best replacement option for their vehicle, without compromising technical attributes of the vehicle. Consumer safety needs to remain as the primary aim of the retailer.
Vicken Singh who runs a workshop with his father Utham from their home in Kharwastan Chatsworth, said the Commission’s reforms for industry was the best news they could receive.
Singh said, presently, they were restricted to what they could earn because then big players “monopolised” the aftercare market.
“We can provide exactly the same service as the dealerships, but a cheaper price because our overheads are lower, and there would be no compromise on quality”
Singh said his father who qualified as a mechanic in 1975, worked for a dealership before but ventured on his own in 1981 and has kept going ever since.
In 1995, to remain competitive, the workshop was moved to his home.
“We can set up a lavish lounge with leather lounge suites, big screen TVs and free beverages, but the customer ultimately pays for it.
Instead, we offer good quality work and cheaper rates.”
Singh said they had all the required machinery and instruments required to provide a quality service and they were able to give their clients personalised service, even if they were an after-hours call-out.
He said they had the space to expand their workshop but finances was the barrier before.
Anand Naidoo, the owner of SA Autotech, a workshop based in Springfield Park said he too would expand his operations if the news were to take effect.
“I currently have a staff complement of 12, they are constantly trained in the latest trends in the industry and we have equipment worth millions to work on our specialty, which is German vehicles.”
Naidoo is confident they could keep pace with the big players in the market if they were given the opportunity.