Autoforum march April 2014

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March / April 2014

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PAGE 24 IN PARTNERSHIP WITH AUSTRALIAN BODYSHOP NEWS

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I N N O V A T I V E

Loaded questions for 'Lorries'

SCAN ME!

Autoforum Online

US VDS – Problems up for the first time SHOW T I ME

Tough year ahead for dealers

AMR 2014 SHOW REPORT

Exports key for growth Wesbank’s 2014 forecast PAGE 1

AutoForum - March / April 2014

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March / April 2014

CONTENTS

10

Cover Stories US VDS – Problems up for the first time

18

Tough year ahead for dealers

32

Exports key for growth

34

Wesbank’s 2014 forecast

36

Loaded questions for ‘Lorries’

46

AMR 2014 show report

52

20

Trade Talk Thank you to UD Trucks South Africa for our cover photo.

Highlights of global and local industry news

06

News Forum

Editorial Its our second issue of the year and for those of us not consumed by the Ukraine crisis, missing jet aircraft or various court cases (no you wont find any Oscar Pistorious updates I’m afraid), business, training and conferences are keeping us out of mischief. There is always something new to be reading, attending, updating, downloading or fixing.

Bosch launches Nairobi office

12

A tribute: Ftitz Hellberg (1940 - 2014) a remarkable mind

14

TradeXchange announces new capabilities

15

Driving hazards

16

AutoForum knows exactly how busy you are, so we are making getting the news that much easier for you. This print edition is packed with all the useful info you need over the next few months and indeed the rest of the year - so mull it over, pass it around, print it out and add it to your workshop or shop pinboard. For those who would like a full digital version of the printed magazine you can locate it on our website under “Online Edition” to view online or on tablet.

US VDS - Problems up for the first time

18

Considering imported used engines? Read this first

20

Are your parts partners tech leaders?

22

Paint manufacturer returns to Automechanika

23

To make sure you keep up with the breaking news however, follow us on twitter @AutoforumZA and Facebook, www.facebook.com/autoforumZA. Its just less taxing to take it all in, in bite sized chunks, and we are very interested in your comments – like the page and post your news too.

30

BodyShop News NACE 2014 is taking shape

25

The only three things you need to know for 2014

26

Renew My Car - now in SA

30

36

EDITOR: CLARE RUTKIEWICZ CONTRIBUTORS: AUSTRALIAN BODYSHOP NEWS ROY COKAYNE ROBERT KAISER

DAVE SCOTT Colin Windell Warwick robinson

EMAIL: INFO@AUTOFORUM.CO.ZA Fax: 086 627 1135 PUBLISHER: SWIFT PUBLICATIONS & OLYMPIC PARK TRADING POSTNET SUITE 174 PRIVATE BAG X11 HALFWAY HOUSE 1684

FOR ADVERTISING ENQUiRIES: GRANT WEST

Mobile: +27 (0) 76 727 8161 WARWICK ROBINSON Mobile: +27 (0) 82 855 7750

Business Forum More pressure on motorists and a really tough year for dealers

32

Exports: An essential driver for growth in SA manufacturing

34

Wesbank unveils its forecast for 2014

36

38

Innovations Wireless Charging for future Toyotas

38

Mirror smarts

39 AutoForum has an ABC circulation of 13236 ABC (July - September 2013).

NB New ABC figures to apply for 2014.

Full print run of 7800, and new frequency will be auidited in July 2014.

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www.AutoForum.co.za I N F O R M E D

Training GM renews support for Mechatronics programme

40

iATN heads into the classroom

42

Winterveld enterprise hub launched in Gauteng

44

VWSA congratulates first DP graduates

45

Commercial Vehicles Loaded questions for ‘Lorries’

46

Delivering commercial value from your fleet

50

Show Time AMR 2014 Show report

52

Shell combines PurePlus with Active Cleansing Technology

55

Aftermarketplace REINZOADD gets turbochargers off to a perfect start

56

Gabriel’s new suspension tester for Bakkies, 4x4’s MPVs and SUVs

56

New Modis Ultra from Snap-on Diagnostics

57

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I N N O V A T I V E

Advertisers Guide Aerocure Alfa AUDI Parts Auto Cosmos - Electrolog Equipment Africa Garage Trade Supplies Highveld Garage Equipment Integrated Marketing Ital Machinery Launch Tech Leaderquip Mahle MIDAS Motor Merchandise Nissan PCL - AEI Robert Bosch Robert Bosch SAAW-S.A.Automotive Week Snapon Tenneco / Monroe Trysome Auto Electric Turbo Exchange U D Trucks VW Parts Victor Reinz Wheelquip

OBC 15 19 57 51 57 37 33 4, 45 27 IFC 43, 29,41,53 24 11 35 17 IBC 7 25 9 21 22-23 47 5 49 13

Don’t Know what this is?

Download a QR code reader for your Smart Phone or Tablet from the Apple or Android app stores, and you can use it to scan this code & go direct to our online edition at www.autoforum.co.za – it is free and updated DAILY! Follow us on Twitter and Facebook: AutoForumZA

While reasonable precautions have been taken to ensure the accuracy of the advice and information given to readers, neither the editor, nor the publishers, can accept any responsibility for any damages, injury or loss which arise there from. The opinions expressed by contributors to this magazine are not necessarily shared by the editor or the publishers.

OGILVY CAPE TOWN 64033/E

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Trade Talk

AutoForum AutoForum--March March/ April / April2014 2014

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MACS announces 'Robinair Days' winners

GTS supplies 'Tyres & More' a new concept from Tiger Wheel & Tyre

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ACS Auto recently hosted a series of “Robinair Days” to educate customers on the equipment and provide training on the units.

The Robinair Days were held at MACS Auto in Selby, Cape Town, Pretoria, Port Elizabeth and Bloemfontein branches from the end of November 2013, to early February 2014, with strong attendance at all locations.

s stores under the new Tiger Wheel and Tyre brand

“Tyres & More” are rolling out nationwide, the Randpark ridge store held an open evening to celebrate, inviting clients and suppliers to experience the store. David Barendse of Garage Trade Supplies proudly equipped the store with all of their tyre service and lifting equipment. Fred Scheepers of Tyres & More explained how the expansion of the tradiitonal TWT range of services will include brakes, shocks, batteries towbars and more.

In addition to the free training, MACS Auto and Robinair decided to give away two Robinair ACM-3000 machines to two lucky attendees. The winners were Walter Gale from Bosch Car Service (Auto Expedi8) in Alberton and Mark Rowe from Super Synergy (Cape Town).

The handover took place in Johannesburg on Tuesday, 11 February 2014 and the Cape Town handover to Super Synergy happened two days later. Congratulations to the winners.

Red Bull racing at Beissbarth

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very special Reb Bull Renault Megane graced Beissbarth’s TyreExpo stand - this is one of only 500 such cars produced - this particular one numbered 465/500.

“We wanted a display vehicle to match the quality and performance of our wheel and tyre equipment” quipped Dereck Knight of Bosch, who market the equipment brand locally. “The equipment on display is the very best Beissbarth have to offer, and so the display car fits right in.”

Contact Bosch for more details on 011 651 9600.

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GLOBAL OPPORTUNITIES AT THE GATEWAY TO AFRICA’S AUTOMOTIVE INDUSTRY

JOIN US and the South African automotive industry at Africa’s premier automotive manufacturing tradeshow as we showcase our capability to the world.

0861 101 475 GALLAGHER CONVENTION CENTRE • MIDRAND JOHANNESBURG • SOUTH AFRICA

ROB DAVIES SOUTH AFRICAN MINISTER OF TRADE AND INDUSTRY

The AIDC is pleased to have secured hosting rights to the initiative, which will not only position the Gauteng province as the automotive investment destination of choice, but also showcase the capability of South Africa’s manufacturing capability broadly.

The South African Automotive Week, to be held for the first time in Midrand, Johannesburg, will be the ideal venue and opportunity to showcase our industry, develop trade links and suscitate investments. I invite all stakeholders to join us.

BARLOW MANILAL CHIEF EXECUTIVE OFFICER, AUTOMOTIVE INDUSTRY DEVELOPMENT CENTRE (AIDC)

ROBERT HOUDET EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF AUTOMOTIVE COMPONENT & ALLIED MANUFACTURERS (NAACAM)

It is NAAMSA’s belief that South African Automotive Week will make a significant contribution to the development of the supply chain with respect to skills development, access to new markets, technology and supply sources.

NORMAN LAMPRECHT DIRECTOR, NATIONAL ASSOCIATION OF AUTOMOBILE MANUFACTURERS OF SOUTH AFRICA (NAAMSA)

HOSTED BY:

The Retail Motor Industry is thrilled at the prospects presented at SAAW. The RMI not only endorses but strongly recommends participation as an exhibitor or as a conference delegate or visitor that may wish to participate in matchmaking and networking opportunities.

JAKKIE OLIVIER MD, RETAIL MOTOR INDUSTRY GROUP(RMI)

JOHAN VAN ZYL PRESIDENT, NATIONAL ASSOCIATION OF AUTOMOBILE MANUFACTURERS OF SOUTH AFRICA (NAAMSA)

MPUELENG POOE PRESIDENT, NATIONAL ASSOCIATION OF AUTOMOTIVE COMPONENT & ALLIED MANUFACTURERS (NAACAM)

Trade Talk

AutoForum AutoForum--March March/ April / April2014 2014

'United Nations' for Leaderquip at TyreExpo

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eaderquip’s Jose Domingues and Jan Labuschagne, together with their team, hosted a number of international guests - both from the supply and client side of their business - at Tyrexpo in March. “This show has given us the opportunity to interact with existing and future clients” commented Domingues. “We have had time to sit and discuss upcoming requirements and business with some of our most important customers from across SA, as well as Sub-Saharan Africa and the Indian Ocean Islands”.

Their stand displayed one of their new Carleo lifts. The Inground SL-568-SA (3.5T) combines the abilities of a 2-post and a scissor lift with an innovative design, allowing an above head height of 2.0 metres and is suitable to lift SUV and passenger vehicles.

Jeff Henry, Hunter Engineering Regional Manager for Southern Africa, was also present at the show, in support of Leaderquip’s extensive Hunter range. He took me through some of the latest developments on products launched at last year’s SEMA show in Las Vegas, and focussed specifically on the Hunter “Revolution” tyre changer.

“This is a product we believe has enormous potential for our global customer base,” Henry explained. “With full automation from wheel mounting onwards, the Revolution is valuable for all workshops, including those with technicians at lower skill levels”. Hunter’s promotional material also points out how it simultaneously increases operator safety with the positioning of the intuitive touchscreen and foot pedals. Hunter Engineering U.S.A. has extensive information and training material available, on www.hunter. com as well as youtube.

For links to the specific videos on Carleo and Hunter products see autoforum.co.za

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Trade Talk

AutoForum AutoForum--March March/ April / April2014 2014

Welcome to Golo - the big news from Launch Technologies

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aunch technologies brand new “Golo” diagnostic tool goes some length to breaking right out of the workshop environment and directly into the consumer arena. Basically a plug in mobile diagnostic attachment, the system is linked wirelessly to a smartphone and delivers in a number of areas valuable to the vehicle owner, and service technician.

The product is touted as a revolutionary tool that will change the way consumers understand and interact with their vehicles - from basic information such as mileage and tracking, right through to warnings about open windows, The system has the capability to store data in a cloud environment. This setup can therefore also be shared with the automotive service provider in terms of accessing information on the technical aspects of the vehicle performance.

Launch Technologies SA are very excited about the product for the reason that South Africa is only the second country to recieve this technology.

www.AutoForum.co.za

G.U.D. Sponsors Young Sharks

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his past weekend G.U.D. Holdings presented a cheque of R1 million to The Sharks Academy – the third year that the automotive parts manufacturer has sponsored players at the training academy.

Red Shuttleworth, CEO, G.U.D. Holdings commented: “We are proud to be associated with such a renowned sports training academy and are confident that our investment will not only be beneficial to the players themselves but to South African sport as well.”

The sponsorship forms part of the company’s commitment to youth development in South Africa

Red Shuttleworth, CEO (left) and Ian Law (right), Sales & Marketing Director of G.U.D. Holdings presents the cheque to Etienne Fynn, Managing Director of the Sharks Academy (centre).

PCL – Entering the local nitrogen market and distributed via AEI.

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ell known globally as suppliers of high end inflation equipment, the UK based PCL brand is being locally distributed by Automotive Equipment International (AEI).

Of major interest to the brand are the opportunities that they believe are available in the local nitrogen inflation market.

Speaking to the product manager, Olly Shortland, who was at TyreExpo in Sandton last month he re-iterated that while it was definately one of the opportunites PCL and AEI had identified, it would not be the sole focal area for the brand.

“We believe that our product is very well suited to the local market, and that we can establish a strong foothold” he explained, “PCL is an established brand with great credentials, and we believe that we have the right distribution channel into SA through AEI.” PCL’s Olly Shortland pictured with Rod Low, National Sales Manager, & Leith Madden, Tyre Division Manager, both of AEI.

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AutoForum - March / April 2014

The latest global news

Bosch launches Nairobi office

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he Bosch Group has officially launched its operations in Nairobi, Kenya - which, its says, reinforces its commitment to the East African Region, and indicates the company’s rosy outlook on the larger East African market.

Uwe Raschke, member of the Bosch Board of Management, commented: “Our entry in the East African market is an important milestone for Bosch. It reflects the strategic importance that we see in Africa. We are extremely optimistic about our business prospects in Kenya and in East Africa, and our subsidiary is a clear symbol of that optimism.”

The German company is renowned for its innovative strength and efficiency, and explains that it will initially focus on East African Automotive, Power Tools and Security Systems markets. The country’s auto industry has been growing in the last decade - helped largely by significant economic expansion, fuelled by a growing middle-class population.

According to data from the Kenya Motor Industry, new vehicle sales rose by more than 13% to hit over 14,500 units in 2013. That is up on its peak of more than 13,100 units, recorded in 2008.

Operating in the Automotive Aftermarket, Bosch’s largest division in the African market, the offer to East African consumers will include Bosch parts, test equipment and software, specialised technical training, a hotline as well as Workshop Concept offerings.

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According to Dr. Steffen Hoffmann, Managing Director of Bosch in Southern and Eastern Africa, the aim is: “to work with a network of independent workshops that are small enough to offer real value, yet have the backing of Bosch, one of the world’s largest suppliers of automotive parts. This way, we target to offer consumers an alternative choice in the marketplace for bumper-to-bumper servicing and diagnostic repairs. We will ensure strict quality standards set by Bosch worldwide to ensure quality servicing every time.”

Under the Power Tools portfolio, Bosch brings brands such as Bosch, Skil and Dremel to the East African market. The core success factors, it says, are the power and pace of innovation. The company confirms that it launches more than 100 new power tools onto the market every year. Around 40% of the sales of Bosch Power Tools are achieved with products that have been on the market for less than two years.

Bosch has been present in Africa since 1906. It is headquartered in South Africa, where it employed some 600 people at the end of 2013. According to preliminary figures the company worldwide recorded total sales of 46.4 billion euros in 2013 and boosted its innovation capability by investing some 4.5 billion euros in research and development (R&D).

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NEWS FORUM

AutoForum - March / April 2014

A tribute: Fritz Hellberg (1940 – 2014) a remarkable mind - Dave Scott

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first came to know Fritz Hellberg, my friend and business associate of the past 38 years, in the late seventies – he was then Sales Manager at Mercedes-Benz NMI in Durban.

When I look back over the years, it’s quite apparent we were enjoying Fritz the man with a remarkable mind – what makes me say this?

For a farm-boy from rural Glencoe, born in 1940, Fritz had an amazing capacity for languages. Fritz conversed easily in English, Afrikaans, Zulu and German. This helped greatly in business relationships and allowed him to communicate freely with truck drivers. It brings to mind that famous quote from Rudyard Kipling’s Poem ‘IF’: ‘If you can walk with Kings yet keep the common touch’. Fritz had presence – he was a man who was at ease with ordinary folk and quite relaxed in a boardroom of difficult directors.

Fritz was involved in an accident near Durban where his beloved Audi left the road and ended up damaged in bushy undergrowth. Fritz told me he was still sitting, seatbeltstrapped in the car assessing his next move when vagrants emerged from the undergrowth and started to raid the car.

Fritz mustered his strongest, loudest Zulu and told them: “God and Jesus are watching you now!” The raiders took such fright they disappeared back into the bush.

For a starter, Martin Dammann said this and I endorse it: ‘Fritz Hellberg was a visionary’. Fritz had a ‘Pentium iii’ mind in a ‘chrome vanadium’ environment. He could see the future! The modern term all young people use is ‘cool’ or ‘awesome’ and Fritz’s mind was truly awesome.

When I could not type my name or even send a fax, Fritz was promoting the concept of computerized mission simulations in the early eighties. We all thought of computers as massive IBM 360 mainframes, but Fritz was already far ahead of the curve into portability and PC type hardware. What took hours in the eighties and boggled our minds, now happens in seconds and is still amazing.

More importantly Fritz was not only a visionary – he gritted his teeth and hung in there when most of us would have given up. That a computer could travel the routes of Southern Africa with a high degree of performance output accuracy was mind-blowing (almost unacceptable) to a society of hardcopy-driven sceptics. And remember, this all happened when satellite technology was also a future pipe dream.

Fritz not only put in mental effort, but huge physical effort that took him away from home for days on end.

Fritz personally drove all the routes of Southern Africa in his Audi and captured the route profiles – gradient, altitude, speed limits, curves, road surface and so on. This wasn’t a cushy Internet search on Google – this was sweat, time, danger on the road and millions of long kilometres. And there were no cellphones when this all took place. Where was he on the road? Today we cannot leave home without a smartphone attached to us like an umbilical cord.

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What I have always enjoyed about TransSolve software is the unusual result that Fritz and I would come upon at the end of a joint consulting project. Fleet owners were often stunned by the fact that their trailers were the cause of high running costs or that their chosen routes – not ideal routes – resulted in high fuel consumption.

The tipping point for Fritz in business was when he stopped trying to sell the system and turned to licensing the software.

And then he introduced Martin Dammann and his son Jens into the business – this was the starting point for a succession plan and carrying his visionary torch into the future. Today we have Jens, Martin, Olav and a team of young experts who are constantly improving the TransSolve suite of programmes.

And more recent is the lady team member, Sorcha, Jens’ wife and builder of an international footprint for TransSolve under the banner of Truck Science. Thanks to Fritz Hellberg’s foresight we have a world-class, transport-efficiency system in good hands. Today we celebrate handing over the TransSolve torch to a really ‘cool’ group of bright, young minds!

Another friend Vic Oliver commented: “Having known Fritz for many years, I have always admired his passion and love for the trucking industry. I have very fond memories of spending many hours together with Fritz, running computer simulated models to establish which trucking combination is the best and most cost effective on the Johannesburg to Durban route.

Fritz, I salute you as a true master of the trucking industry in South Africa, your name and trade mark in the industry will never be forgotten.”

Translated, Hellberg means ‘clear, lucid and brightmountain’ – that’s Fritz’s legacy; he has left us a ‘clearmountain’ of achievement.

Dave Scott is a member of the S.A. Guild of Motoring Journalists, and is a monthly contributor to the press on transport and trucking related subjects. In 2002 and 2003 Dave Scott was the S.A. Guild of Motoring Journalists winner of the category ‘Business Motoring’. As a member of the S.A. Institute of Tribology he takes a keen interest in the application of lubricants to road transport maintenance and the cost of ownership.

His key writing focus is on fleet management including the technology of trucks and road transport.

TradeXchange announces new capabilities

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ransUnion’s TradeXchange platform is 10 this year and to celebrate, has announced a new development that will launch later in 2014.

By the third quarter, dealers will be able to upload vehicles to TradeXchange as well as search for vehicles, bid and finalise deals from their smart mobile devices.

The dealer-to-dealer auctioning platform was developed to help dealers maximise profits, improve their operational efficiencies and reduce lead times to sales.

As Kriben Reddy, head of product development at TransUnion Auto, explains: “The used market has become considerably more competitive over the years and dealers are having to adopt

new and innovative practices in order maintain a competitive edge.” “This includes being able to trade and make informed decisions from any location, at any time. In order to meet this need, TradeXchange is going mobile.”

The mobile TradeXchange facility will be linked to TransUnion’s DealerGuide app

- enabling each vehicle loaded onto the platform to be backed by a TransUnion valuation and verification report, which will be provided to TradeXchange subscribers at no additional cost.

Reddy continues that 55% of all vehicles loaded on to the TradeXchange platform are sold within their specified timeframe, and realise an average trading profit of over R5 000.

He believes TradeXchange continues to meet dealers’ most pressing requirements for a single, consistent trading platform that enables the successful management of overaged stock; allows for the retention of group trade profits; and simplifies the enforcement of compliance with dealer group policies.

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NEWS FORUM

AutoForum - March / April 2014

Driving hazards

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hildren in the car are the number one distraction for drivers – thats the finding of two new research papers.

Associate Professor Charlton said while the risks of distraction during driving are becoming increasingly well known – drivers often don’t consider their own children to be a distraction and this highlights the need for education about the risks of focusing on their children rather than the road.

The first - conducted by British road safety charity IAM together with Vision Critical - found that of the 1500 drivers surveyed, 29% admitted that their children are their biggest “Previous research has shown that, compared with distraction while driving. driving alone, dialling a mobile phone while driving is

associated with 2.8 times the crash risk, and talking or Busy lifestyles and a constant need to multitask also featured listening while driving is associated with 1.3 times the heavily in that study, with mobile phone use (24%), texting crash risk,” Charlton said. “The costs of distracted driving and social media updates (10%) also featuring. Twenty-three are undeniable. One major and previously unrecognised percent of young drivers (aged 18-24) find this a distraction. distraction is kids in the backseat.”

Other top distractions include: Changing the radio channel (27%); Back seat drivers (26%); Sat nav (15%); Attractive In the Monash study, drivers pedestrians, drivers or passengers (14%).

IAM Chief Executive Simon Best commented: were observed engaging in potentially distracting Nearly a quarter of “All drivers develop bad habits over time. The activities in 90 of the 92 men (23%) admit to being distracted key to reducing distractions and their impact is trips. The most frequent types of distractions by attractive people to learn to look upon your driving as a skill that included turning to look at compared to three percent of women. needs continuous evaluation and improvement.” the child in the rear seat or watching the rear-view mirror (76.4%), engaging in conversation with the child (16%), The second study was conducted by Monash University and assisting the child (7%) and playing with the child (1%). The found that children are 12 times more distracting to a driver study found that the presence of a front seat passenger did than talking on a mobile phone, while at the wheel. not significantly affect the way in which drivers engaged in potentially distracting child occupant-related activities, both The researchers, from the Monash University Accident in terms of frequency and duration.

Research Centre (MUARC) found the average parent takes their eyes off the road for three minutes and 22 seconds They also found, unsurprisingly, that one area that may assist during a 16-minute trip. in reducing driver distraction is correct restraint of children in their car seats. The researchers found children were in the Associate Professor Judith Charlton and Dr Sjaan Koppel at incorrect position for over 70% of the journey time.

MUARC used cars fitted with a discreet recording system which monitored the driving behaviour of 12 families over While it would be wonderful for people to become more three weeks. The families had an average of two children, educated about the dangers of distractions in their cars, the between 1-8 years of age. The study analysed ninety-two cynical view is that in SA, the most basic rules of the road trips for any potentially distracting activities undertaken are not even adhered to. We have some way to go before we by the driver. This included all activities that distracted the can ask the Metro police to start looking out for distracting driver or competed for their attention while driving; including passengers! looking away from the forward roadway for more than two seconds while the vehicle was in motion.

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NEWS FORUM

AutoForum - March / April 2014

US VDS – Problems up for the first time

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he results of the latest US JD Power Vehicle Dependability Study (VDS) are in, and it would appear that 3-year-old vehicles (2011 model year) are not looking all that hot.

The 25th edition of the study examines problems experienced during the past 12 months by original owners of 2011 model-year vehicles. Overall dependability is determined by the number of problems experienced per 100 vehicles (PP100), with a lower score reflecting higher quality.

One of the highlighted findings is that owners of 2011 (3-year-old) model cars reported more problems than did owners of 3-year-old vehicles last year (2010 models). Overall, vehicle dependability averages 133 PP100, that’s up 6% from 126 PP100 in 2013 – the first time problems reported have increased a year on.

David Sargent, VP Global Automotive commented: “Until this year, we have seen a continual improvement in vehicle dependability. However, some of the changes that automakers implemented for the 2011 model year have led to a noticeable increase in problems reported.”

But what were the main issues with these models? The study found that engine and transmission problems were up close on 6 PP100 year-over-year, which accounts for the majority of the overall 7 PP100 increase in reported problems. Vehicles with 4-cylinder engines seemed to have the most issues - problem levels increased by nearly 10 PP100. These smaller engines, as well as large diesel engines, tend to be more problematic than 5- and 6-cylinder engines, for which owners report fewer problems, on average.

“Automakers are continually looking for ways to improve fuel economy, which is a primary purchase motivator for many consumers, particularly those buying smaller vehicles,” said Sargent. “However, while striving to reduce fuel consumption, automakers must be careful not to compromise quality. Increases in such problems as engine hesitation, rough transmission shifts and lack of power indicate that this is a continuing challenge.”

Dependability leads to loyalty – but when it goes wrong, its goes horribly wrong The survey also found - not surprisingly - that the fewer problems owners experience with their vehicle, the greater their loyalty to the brand. Combined data from previous years’ VDS results and vehicle trade-in data from the Power Information Network (PIN) from JD Power show that 56% of owners who reported no problems, stayed with the

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same brand when they purchased their next new vehicle.

Brand loyalty slipped to just 42% among owners who reported three or more problems.

The research house also highlights that a comparison of data from the 2013 Vehicle Dependability Study with data from the subsequent 2014 US Avoider Study shows that – again inevitably - consumers are much more likely to avoid vehicles from brands that rank lower in dependability. On average, 23% of consumers avoided brands that ranked in the lowest quartile of the 2013 VDS, because of concerns about reliability. In contrast, only 9% of consumers cited that same reason for avoiding brands that ranked in the top quartile.

“By combining our customer research with trade-in data, we see a very strong correlation between dependability and real-world brand loyalty,” said Sargent. “Also, we see that brands with lower dependability are likely to be shut out of a significant piece of the market, as many consumers will not even consider purchasing one of their vehicles because of concerns about its likely reliability.”

And top marks went to: Lexus ranks highest in vehicle dependability among all nameplates for a third consecutive year. JD Power notes that the gap between Lexus and all other brands is substantial, with Lexus averaging 68 PP100 compared with second-ranked Mercedes-Benz at 104 PP100. Following Mercedes-Benz in the rankings are Cadillac (107), Acura (109) and Buick (112), respectively.

General Motors Company receives eight segment awards - more than any other automaker in 2014 - for the Buick Lucerne; Cadillac DTS (tie); Cadillac Escalade; Chevrolet Camaro; Chevrolet Volt; GMC Sierra HD; GMC Sierra LD; and GMC Yukon.

Toyota Motor Corporation garners seven awards for the Lexus ES; Lexus GS; Lexus LS (tie); Lexus RX; Scion xB; Toyota Camry; and Toyota Sienna. Honda Motor Company receives six model-level awards for the Acura RDX; Honda CR-V; Honda Crosstour; Honda Element; Honda Fit; and Honda Ridgeline.

MINI receives one model-level award for the MINI Cooper.

The Vehicle Dependability Study is used extensively by manufacturers and suppliers worldwide to help them design and build better vehicles, which typically translates into higher resale values and customer loyalty.

It also helps consumers make more informed choices for both new- and used-vehicle purchases.

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PAGE 19

NEWS FORUM

AutoForum - March / April 2014

Considering imported used engines?

Read this first.

- Les McMaster

W

hen it comes to buying an engine for a vehicle, the cost implications associated warrant taking the time to do your homework.

risk of having to pay more than once to have the engine removed and refitted as well as paying twice for things like oil and oil filters used in the process.”

It’s important to remember that no matter what you call them, second hand, reconditioned or pre-owned engines are all used engines. A low mileage engine with an excellent warranty is what you - and if you are fitting it for a customer, your client - should be looking for.

This leaves the consumer vulnerable, having to bear the full burden and risk of these additional costs, which need not necessarily be the case. Refunds are also excluded in warranties as a possibility of redress for the consumer who needs to return the engine in the event of a successful warranty claim so that it can be exchanged for another engine.

Greg Brink, National Chairman of the Engine Remanufacturers Association (ERA), warns buyers that the purchasing of used imported engines is most certainly not Proudly South African. “I say this because unlike the repair and remanufacturing process in South Africa, imported used engines do not support other local manufacturing industries and their distribution networks and buyers should be aware.”

He says that the direct result of this has seen the closing of manufacturing plants locally and the consequent loss of jobs and skills. “We have also seen the closure of many engine remanufacturers and machine shops and those that have survived are generally employing up to 50% less staff. The interesting thing is that consumers continue to be duped by claims that these are all low mileage engines hand picked for their pristine condition, or in some cases, the consumer comes away believing they have purchased a new engine.

This is not the case,” says Brink.

He believes that if this was true, the importers would be prepared to sell their goods with a guarantee in line with the Consumer Protection Act - which is six months on goods being sold. “The majority of these engines are, as far as we can ascertain through web searches and market intelligence, sold with only a start-up warranty which means that if the engine starts and runs once installed, the supplier of that engine has no further liability.”

Brink says that in the few cases found where the terms of the warranty are for a longer period, there are other conditions included such as: the vehicle must be physically returned to the supplier for inspection otherwise the longer warranty is nullified.

In all cases, however, the supplier accepts no liability for any costs incurred by the vehicle owner and or the workshop that is fitting the engine. “That means that the buyer is at

PAGE 20

Brink says that while suppliers of these engines are quick to make unsubstantiated claims about their products, saying fitting such an engine will increase a vehicles resale value, they do not inform consumers of more mundane legal requirements. “This could include, for example, going through the process of obtaining a Police Clearance Certificate for the engine and either having the vehicle micro dotted or having the micro dots confirmed so that the vehicle particulars can be updated on the national vehicle database. Often no mention is made of the cost or effort required to comply with these legal requirements and the buyer is rather informed that fitting these engines is the most convenient way to get their vehicle back on the road,” he says.

The general rule of thumb is that if something looks too good to be true, it probably is. It is just a better idea to rather ‘go local’ and to speak to local engine remanufacturers first before going the imported used engine route. We have many reputable remanufacturers in the country that will ensure the engine is physically upto-scratch and meets our legal requirements. Buying an engine is a big investment so make sure you – and if you are guiding a customer, they - understand what you are getting, down to the fine print, before going ahead with the purchase.

Of course of you are an accredited MIWA shop, your customers will not only have warranty protection but also access to recourse in the unfortunate event of something going wrong. Which is a good selling point for your business too.

ERA is actively engaging with the Department of Trade (DTI) and Industry and International Trade Administration Council (ITAC) to find ways to address the challenges regarding used imported engines.

Les McMaster is the owner of M-Centre in Centurion and has been running his business for the past 26 years.

He has been in the motor industry for 42 years in various managerial positions, and assumed the role of Chairman of MIWA in 2009. He is currently leading the charge in the Right to Repair Campaign.

PAGE 21

NEWS FORUM

AutoForum - March / April 2014

Are your parts partners tech leaders?

A

ccording to Tenneco, the ever-accelerating pace of innovation can be both a challenge and an opportunity for aftermarket service providers, depending on the strength of their supplier relationships. Alex Gelbcke, VP and General Manager, Europe & Africa aftermarket for Tenneco, says that it is becoming increasingly important to partner with parts manufacturers whose own engineers are driving the development of these new Original Equipment (OE) technologies.

these products and systems when they enter the aftermarket replacement cycle. Just some of the key breakthroughs achieved by the company’s engineers - and which will, in all likelihood, become standard features of future vehicles – include:

“It is easy to become intimidated by some of the very complex systems found on today’s models, much less think about what’s coming in the next five years,” he said. “But workshops relying on suppliers that are leaders both at the OE and aftermarket levels have a significant advantage over the long term. They will have access to the best technologies, as well as in-depth training and other technical support to help diagnose and repair these new vehicle systems.”

Active Suspension Car (ACOCAR) – A fully active suspension system that controls pitch, roll and heave for superior handling, safety and comfort. The system is energized by actuators with two electronic valves and hydraulic pumps.

The company explains that its own Monroe product lines offer excellent examples of this OE-aftermarket synergy.

Having proven itself as one of the premier suppliers of original equipment ride control and steering and suspension technologies, Tenneco believes it is ideally positioned to help workshops quickly and effectively diagnose and repair

PAGE 22

Continuously Variable Semi-Active Suspension (CVSA) – A system that instantaneously adjusts shock absorber damping characteristics to road conditions and a wide range of vehicle dynamics, including speed, turning, cornering and driver inputs.

According to Gelbcke: “In the case of each of these technologies, Tenneco’s Monroe brands will leverage our OE advantage to help workshops, fitment centres and retail customers address the corresponding diagnostic and service opportunities within the aftermarket.

By choosing Monroe, customers can be certain they are installing true OE-quality replacement solutions that will meet the requirements of the vehicle as well as the demands of the consumer.”

Paint manufacturer returns to Automechanika ‫‏‬

A

fter twelve years, a paint manufacturer from the field of automobile repair paint is returning to Automechanika: Cromax, which used to be one of many products made by DuPont Refinish, will make its trade fair debut as a new brand in Frankfurt from 16 to 20 September. Cromax belongs to the newly founded, independent company, Axalta Coating Systems. The company has over 140 years’ experience in the paint sector and supplies more than 120 000 customers in 130 countries.

Cromax Marketing Manager Hartmut Krause is a proponent of trade fairs as marketing tools: “We had no difficulty in choosing the fair as our marking tool, especially for the Cromax launch. We believe in the international Automechanika brand. For us, it is an ideal opportunity to show existing and potential customers that, although the Cromax brand is new, we remain the experts with regard to workshop productivity and are suppliers of more than just paint. Naturally, this will also be one of the key themes at our exhibition stand. Moreover, Cromax will not only make a presentation in Frankfurt but also at Automechanika Dubai from 3 to 5 June.”

The Automechanika shows in Dubai and Frankfurt are on track for a full success. Both shows are already 90% booked.

PAGE 23

AutoForum - March / April 2014

Contents 25

NAce 2014 is taking shape

26

The Only Three Things You Need To Know For 2014

30

Renew My Car – now in SA

PAGE 24

Body repair insight In association with BodyShop News Asia and Australian BodyShop News

he NACE/CARS 2014 conference and exposition, North America’s largest auto collision and service repair event, is approaching fast. This year’s event will be held in Detroit at COBO Center 30 July 30 – 2 August, with other industry meetings taking place throughout the week. This event offers more training, education and networking for collision and mechanical repair professionals than ever before.

An early schedule of events includes: • Monday, 28 July: CEICA, SCRS, NABC and other board meetings and roundtables • Tuesday, 29 July: CIC quarterly meeting and evening reception • Wednesday, 30 July: I-CAR annual meeting and gala reception, NACE personal development programs, industry and museum tours, ASA board meeting • Thursday, 31 July: NACE and CARS conference sessions and exhibition, ALCOA aluminum presentations, Collision Industry Education Foundation annual golf tournament and scholarship fundraiser, industry and museum tours, MSO and Mechanical Symposium receptions, numerous industry receptions • Friday, 1 August: NACE and CARS conference sessions and exhibition, MSO Symposium, Mechanical Symposium, ALCOA aluminum presentations, industry and museum tours • Saturday, 2 August: CARS technical conference sessions, industry and museum tours In addition to the industry events taking place throughout the week, there will be numerous tours and recreational outings for spouses, guests, and families. Some of these events include museum tours, Detroit Tigers baseball games, river and city tours, casinos, and much more. For those interested in attending, information can be found at www.NACEexpo.com or www.CARSevent.com.

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International Autobody Congress and Exposition (NACE) – the world’s collision repair event – represents the only B2B event of its kind specifically designed for collision repair industry professionals from around the globe. NACE features a comprehensive educational Conference and Exposition with hundreds of diverse exhibiting companies displaying the latest equipment, products, services and technology available to today’s collision repair industry.

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PAGE 25

AutoForum - March / April 2014

BODYSHOP NEWS

The only three things you need to know for 2014 - Kristen Felder

W

e are already well into 2014, but now that you have had some space from last year it’s still early enough to look back at 2013 and make some significant changes to allow this year to work all that much better for you.

Last year proved to be one of great change and movement for my company and for our industry as well. Some of you feel like 2013 came and went just a little too fast and others feel like 2013 was just a foreshadowing of a gloomy 2014. (In the US) we saw increased consolidation of repairers, changes in DRP programmes and the temperature turned up on the parts procurement debate.

BODYSHOP

For me, the hardest part of this time of year is keeping the focus on what I can control. It’s easy to review a year and place some blame outside your circle. The common excuses are insurance DRP programmes (direct repair programme – an agreement between a collision shop and a car insurance company to provide repairs for the insurance company’s claimants), steering, lagging economy, untrained workforce... yada...yada....yada.

PAGE 26

When I find myself in this hole of thinking, I immediately go back to three core principles.

It’s the only things I need to know and focus on to run a successful business in the collision repair industry.

Cars Are Worthless, People Are Priceless: Like many of you, our small collision repair shop saw a variety of cars. From classics needing restoration to daily drivers just looking to get back on the road. As we were removed from insurance company DRP programmes so were our late model repairs and we began surviving on the elusive “customer pay”.

However, how cars were repaired stayed the same. Simply put, there is only ONE way to fix a car. The RIGHT way. There were no exceptions in the quality, procedures, part usage, etc. The car - no matter if it’s brand new or 15 years old - is worthless, the cargo in it is priceless. If you focus on the inside of the car and not its book value, you’ll see repairs in a whole new light.

Too many times I encounter “questionable” repairs at what I would consider to be good shops. I’ve seen full clips, crazy sections and painted mouldings. It’s hard to hear a shop tell me about their insurance company woes with that sore thumb glaring at me behind them.

What I typically hear: “That’s not an insurance job, that’s a customer pay”. Does that make it right or worse?

If I walk into your shop hand you my gun and say “Shoot me” will the police not take you to jail because it was a “customer request”?

Kristen R. Felder is the creator and developer of Collisionhub.com, the premier networking site for the collision-repair industry.

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AutoForum - March / April 2014

At the same time, repairs should not be compromised because “That’s all the insurance company would pay for”. Right is right, wrong is wrong and there is never an acceptable excuse for wrong.

Here’s a tip: If an adjuster sees it done, they believe it’s acceptable. It’s up to us to be the repairers we want to be paid to be. Your worst repair is the standard by which you will be judged, not your best. There’s only one way to fix every car that enters your shop. Stop estimating to a cars’ value and start estimating for yours.

Character Without Economy: There are many definitions of Character, but the one you hear more often is: “Character is what you have when no one is looking.”

For my family it was always: “Character is what you have, even when you’re broke.”

There is no doubt that my father could have played by insurance company rules, changed the business model and stayed on the programmes. It probably would have resulted in financial gain and we would not have had to sell the business.

However, that’s not who we are or were. Dad had business and personal principles and he was willing to ride them to the top or to the bottom.

He didn’t blame the insurance company for changing the game, he blamed the other repairers in our town for changing their standards and in return standards for an entire industry.

There are many decisions you’ll have to make in 2014. Some of you are struggling with staying on DRP’s, investing in equipment or hiring new employees. All decisions become simple when you remove economy and judge solely from your Character. Sometimes doing the right thing is not profitable.

If you do make decisions based on economy, then don’t complain about the source of the profit. No one likes a whiner, much less a shifty whiner with no Character.

Be The Leader Your Team Needs You To Be: As the top of the food chain in your business it easy to look down on all of those who look up to you. For many of us, as we begin planning 2014 we start to think of changes needed in departments and staffing. We’ve all got an employee not pulling their weight or causing morale issues. If only they’d do this or stop doing that we’d be more profitable, happy, etc…

But what if it’s you?

Are you the type of leader that inspires everyone to pull their weight? Some employees will perform regardless of your ability because of their own personal character, but some will perform as a direct reflection of what you show them.

PAGE 28

It’s your responsibility to go and meet each and every employee where they are, not where you want them to be.

Once you get to them, LEAD them where you want them to go. If you’re not developing, challenging and growing your employees, then you’re just a babysitter, not a leader.

We should not have a gap in technicians and skill level if we were leaders in development. It’s not a tech school’s job to turn out work-ready employees. Find the right people willing to commit to a vision and lead them. They’ll repay you beyond your wildest dreams.

I’ll share a secret. In 2012, Collision Hub was broke. I was down to my last few cents and had started working on an exit strategy. We would drive to industry events because gas (petrol) was cheaper than airfare and we camped in state parks. When I told you we were at the “hotel” down the road, we had pitched a tent and slept clutching our camera gear.

Collision Hub and Engage Target Media would not exist without those employees that were willing to sleep in a tent to support my dream. I’m thankful every day for them and the sacrifice they made. I had nothing to offer and sometimes no guarantee that the paycheques I was writing would cash.

They stayed, they suffered, they dug in with me and by mid2012 we had turned the corner. Today we travel comfortably, work with some of the biggest names in the automotive industry and TV production. I never imagined we could be what we are today, but it wasn’t me - it was a team effort.

Those employees have gone on now to chase their dreams, but I’m eternally grateful at the trust they placed in me as a leader. Without a paycheque, without security how many of your employees would stay and fight with you? Are you a leader or an ATM? Create a vision, create something bigger than yourself or a logo and then share that with everyone. Be someone you’d follow, be someone you would want to work for.

I’d like to think in some way that my Dad would have wanted to work for me and the company Collision Hub has become.

He gave me big shoes to fill and an even bigger legend shadow to live under. But he also gave me three guiding principles so that no matter where this industry goes or how fast it goes there, I’ll always know what to do.

I can’t wait to see all you’ll accomplish in 2014.

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BODYSHOP NEWS

AutoForum - March / April 2014

Renew My Car – now in SA

3

M, in partnership with Australian company Renew My Car International and Kansai Plascon, has announced the launch of Renew My Car in South Africa. The partners believe the move will create new business opportunities in the mobile cosmetic car repair industry “for budding entrepreneurs, regardless of gender or education”.

Interested parties are able to purchase a licence to own their own Renew My Car business, by paying a once-off fee of R300 000. For this, they receive comprehensive automotive technical repair and product training from 3M and Kansai Plascon, with a fully inclusive product starter kit, as well as the new Citroen Berlingo vehicle. They also benefit from industry-related business and marketing advice from Renew My Car International, and have access to ongoing technical training and support from both 3M and Kansai Plascon. The brands assert that this means the business owners will be in a position to open and run their own businesses, either as fulltime employment for themselves, or as a side-line investment opportunity. As a licensee they practice their trade under the umbrella licence held by Renew My Car International in Australia.

Already very popular is the permanent scratch removal process where the 3M products, in the hands of trained professionals, come into their own right, delivering shiny new and scratch free surfaces. their assignments – will be issued with the equivalent of a Certificate Level II Qualification in Automotive Body Repair Technology, an Australian qualification soon to be recognised in South Africa,” adds Parmenter.

Mobile Cosmetic Repair Operators are trained to perform a variety of cosmetic repairs to motor vehicles. This includes plastic bumper repairs, fenders, hub caps and wheel trims, windscreen wipers, trim items, headlight restoration and much more.

Vehicle interiors, including fabric stain removal and protection, air conditioning disinfectant and odour removal are also covered. In addition, tar and overspray removal comes with the territory, as does engine bay and valet cleaning. Already very popular is the permanent scratch removal process where the 3M products, in the hands of trained professionals, come into their own right, delivering shiny new and scratch free surfaces. In short, all the attention to older car can ever ask for to look brand new, increasing its value!

Renew My Car International says its concept not only creates employment, but encourages the spirit of entrepreneurship and enables people to become self-employed.

As Stuart Parmenter, Technical Manager Automotive, 3M Automotive Aftermarkets Division, explains: “We are really excited about being a partner in this initiative. The Renew My Car concept not only creates employment, but encourages the spirit of entrepreneurship and enables people to become self-employed, with the sky being the limit in terms of individual success.”

Training comprises an intensive full-time five-week course, followed by 11 months of part-time training. The latter is conducted whilst the business operator already works and earns. Thereafter, participants graduate as Mobile Cosmetic Repair Technicians.

All products used in the body repair work are 3M products and include: polishers, abrasives, fillers and more. Kansai Plascon’s MasterMix TouchUp Technology is used for all paint repairs/touch ups and carries warranties consistent with Standard Industry Repair Practice.

“Renew My Car International combined the Australian Automotive Body Repair Technology Curriculum (AUR 20912) with 3M’s standard operating procedures. All participants who complete the training – and successfully complete

PAGE 30

The Renew My Car process works differently to conventional call-out businesses. Firstly, there is no call-out fee when the operators visit a customer’s premises. Customers are encouraged to take digital photographs of the damage and upload these to the company’s website www.renewmycar. co.za. These leads are then passed along to the nearest Mobile Technician who assesses the damage and replies to the vehicle owner with a quote, provided that the required repair work falls within the repair capabilities.

“Our research shows that this repair offering is approximately 40% lower than conventional panel beaters. Add to this the fact that the average repair time is less than four hours and done at a customer-preferred location, avoiding security and accident risks,” says Parmenter. “Quite often vehicle owners will find that the on-site repair costs are below that of the insurance excess charge, enabling owners to preserve their no-claim bonus.” Add to this the Industry Standard Warranty on all repairs, and South African motorists can look forward to a quick, cost-effective and quality solution to maintaining their car’s appearance and resale value.

Renew My Car International’s Henk van der Walt points out that as no qualifications and industry experience are necessary to invest in this venture, there are no limitations to

opportunities or success. “One of our first licensees comes from a ‘white collar’ position in the ICT sector. Another is an investor only – she has seconded the training and subsequent business to her son in order to provide him with employment.

Our passion is to establish and develop profitable SMEs.” “This is a great venture for 3M to be a part of as we are not only supplying some of the latest products available on the market, but we are giving these new business owners the skills which enable them to run a successful business, with the potential of growing from often only a one man operation to a medium-sized enterprise,” concludes Parmenter.

Renew My Car will be based in Alberton, Gauteng.

Before

After

PAGE 31

Business Forum

AutoForum - March / April 2014

Business insight

More pressure on motorists and a really tough year for dealers - Colin Windell

T

he nitty-gritty of the recent Budget Speech has been well reported. However, I rather like the way economist Mike Schussler managed to encapsulate the squeeze on wage earners when he said: “Since April 2002 the average increase in Personal Income Tax collected every year has been 12% despite the massive fall in the great recession, where one in 12 formal sector workers lost their jobs.

“Since the last quarter of 2004 personal tax has increased with 176% until the last quarter of 2013 mostly due to bracket creep. Over the same period inflation increased with 60% and average salaries around 87%.

However, some complications have emerged in the past, since car manufacturers that import vehicles calculate the fringe benefit at cost.

This reform will be phased in over four years. Adjustments are also proposed to treat employees who bear the costs relating to fuel and the upkeep (maintenance, insurance and licence) of their company car in a more equitable manner.

“About 40% of the increase in personal taxes is due to the fact tax breaks on the whole are well below the rate of inflation and certainly below wage inflation.”

All of this means more pressure on costs for motorists and the prospect of a really tough year for dealers – with total growth in the automotive market conservatively pegged by the economists at around 2%. However, Laurence J Peter did postulate: “An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.”

Although there were no major shocks in Minister Pravin Gordhan’s Budget Speech, motorists will be forking out a massive R2 765 185 942 with the extra 12 c/litre levy on fuel. Additionally, they will pay an extra 8 c/litre to the Road Accident Fund levy.

Vehicles sales for 2014 at this point are that much of a lottery – WesBank boss, Chris de Kock expects fairly meaningful growth in the commercial vehicle sector, even though he, too, is sticking around the 2% overall mark – indicating a significant slide on the passenger car numbers.

“Economic growth of 2,7% is expected for 2014,” says Gordhan, adding despite slower economic growth, the budget deficit is expected to be 4% lower than projected in October last year. Recognising this Budget comes mere months before a general election, it was a fairly tame affair with much of it devoted to the successes of the current Government – a mirror of the recent State of the Nation address by President Jacob Zuma.

President of the National Association of Automobile Manufacturers of South Africa (Naamsa) – Dr Johan Van Zyl - said manufacturing and mining represented key growth drivers which could make an important and positive contribution to the SA economy and employment creation.

Disturbingly, Gordhan did say..”we will pursue exploitation of shale gas (fracking) to provide another energy source for our economy”. This, despite the overwhelming evidence from existing fracking operations that clearly show massive longterm damage to the ecology and water sources.

At the same time National Treasury provided clarity on the valuation of company cars for fringe-benefit tax purposes in its 2014 Budget Review.

Government proposes that the “actual retail market value” of the vehicle should be used for calculations in order to streamline the treatment of company car fringe benefits for all employees (whether or not they work for a vehicle manufacturer).

The use of a company car by an employee is a taxable fringe benefit, based on the market value of the vehicle.

PAGE 32

“Both sectors had been negatively affected recently by prolonged industrial action. Decisive political leadership, supported by a commitment to social dialogue and collaboration between key stakeholders, was required to address the unnecessarily high incidence of industrial disruption in South Africa.

“Consistent with the objective of facilitating sustained higher rates of economic growth, Naamsa endorsed the various initiatives including accelerated public infrastructure investment in electricity supply, rail, water, roads and ports in South Africa. Support for special economic zones and industrial incentives for industrialisation as well as the tax incentives to encourage youth employment were particularly noteworthy.”

In terms of vehicles sales, February 2014 aggregate new vehicle sales at 51 814 units registered a decline of 1 662 vehicles or a fall of 3,1% compared to the 53 476 vehicles sold in February last year.

Colin Windell is the Editor of Fleet Magazine.

The new car segment recorded a year on year decline of 5,4% - clear indication private sales are on ice and refleeting for corporates and rental companies are the major drivers. The investment trend sensitive commercial vehicle segments registered gains – light commercials 0,9%, heavy commercial vehicles 3,6%, extra heavy trucks 19,7 % and buses 17,8%.

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Overall, out of the total reported industry sales of 51 814 vehicles, 83,5% or 43 262 units represented dealer sales, 8,7% represented sales to the vehicle rental Industry, 4,0% to Industry corporate fleets sales and 3,8% to government.

“Following four successive years of growth in domestic new vehicle sales, prospects for 2014 would be affected by subdued economic growth, above average new vehicle price increases as a result of exchange rate weakness and upward pressure on interest rates,” says Naamsa.

“Unsurprisingly, consumer confidence is under pressure with high levels of indebtedness, sharp increases in energy and transport costs, particularly in Gauteng due to e-tolling. These factors will impact on consumer demand, principally in the case of the new car market. As a result, domestic trading conditions are anticipated to remain challenging with pressure on margins in all major sectors.”

Just how the e-Toll scenario is playing out remains a very contentious issue but, with Checkers having revealed it has cost the company some R4-million since the introduction of the tolls, it is clear the embattled consumer is going to be the loser as food prices rise.

Add to this the additional levies imposed on fuel plus the most recent hike pushing petrol to its highest-ever rate.

A favourite catch phrase in tough times refers to vehicle consumers ‘buying down’. This is a misnomer – it really is ‘buying cheaper’ as few (if any) people willingly give up something for less, unless they have to.

Buying cheaper is all very well – and there are plenty of smaller, cheaper vehicles with all the bells and whistles of their large siblings. However, there is a balancing act that comes into play where corporates hang onto vehicles longer (as do private citizens), depleting the supply off good low mileage used cars.

This, in turn, pushes up the prices in the second hand market to dangerously close to those of smaller new cars. Besides being inflationary it also stretches dealer sustainablility to sometimes untenable limits.

As we move into the new tax year, the figures for March might well provide more clarity as to where the market is heading.

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AutoForum - March / April 2014

Exports: An essential driver for growth in SA manufacturing - Robert Kaiser Often overlooked valuable assistance provided by the Department of Trade and Industry could make a huge difference in realising your export strategy.

South Africa is fortunate to have a dynamic automotive component sector - and for that we can in a large measure thank the now-expired Motor Industry Development Programme (MIDP) and its successor, the Automotive Production and Development Programme (APDP).

These Plans were, and still are, crucially important incentive programmes aimed at supporting the local manufacturing of motor vehicles in South Africa and have played a pivotal role in the encouragement of volume production of vehicle models. The latter made the export of fully built up vehicles a feasible reality and greatly benefitted the component manufacturing sector, as part of the supply chain. One glance at the vehicle sales statistics is sufficient to demonstrate how important vehicle exports have become to the SA motor industry and the SA economy as a whole.

Compare the SA situation with Australia, where the three vehicle manufacturers in that country, Ford, General Motors and Toyota, have all announced the closure of their manufacturing plants over the next few years, with serious negative implications for the Australian automotive sector and its economy.

A Valuable Aid for Exporters Apart from the APDP, the Department of Trade and Industry (“the dti”) manages a significant assistance scheme for South African manufacturers to increase their export business and for those who do not export yet, but want to enter the export market.

The Export Marketing and Investment Assistance Scheme (“EMIA”) exists to partially compensate SA exporters for costs incurred in respect of activities aimed at developing export markets for South African products and services, and to recruit new foreign direct investment into South Africa. This assistance is given to a number of priority sectors in the SA economy, which includes the automotive sector.

EMIA assistance is offered in a number of ways:•

• •

Participation by an exporter or would-be exporter in an official South African National Pavilion at trade shows; these pavilions are mostly taken by the dti at international events, although Pavilions at local shows are also taken where the opportunity to promote exports exists.

Participation by SA exporters in international trade shows on an individual basis.

Conducting in-store promotions at retail outlets abroad.

PAGE 34

The National Pavilion Scheme is probably the most significant assistance scheme under EMIA, as exporters who are approved for participation have the opportunity of exhibiting on an official South Africa-branded pavilion at a trade show, which is well-placed for optimal visitor contact. As a rule, the quality of SA Pavilions is exceptionally high, with very aesthetic designs and attention-grabbing appeal.

As a service to the automotive sector, the dti has over the past years inter alia funded SA Pavilions at the Automechanika Frankfurt Show in Germany, Automechanika Dubai in the United Arab Emirates and the Johannesburg International Motor Show. Many South African manufacturers of automotive components, accessories, tooling and other automotive products have done exceptionally well at SA Pavilions at these shows and built very profitable export business.

Imagine getting free exhibition space in a prime location in an excellently branded SA Pavilion , assistance with the cost of transportation of exhibition material and, if you are a qualifying SMME or HDI-owned concern, up to R 17 000 for your airfare and R 2 300 per day accommodation allowance!

Can it get any better for a South African company wanting to establish itself in the export market or increasing its export business?

Are South African exporters grabbing this opportunity with both hands? “ Yes and no”, says Dr. Norman Lamprecht of NAAMSA, who also manages and coordinates the activities of the Automotive Industry Export Council. “There are many success stories of SA exporters in the automotive sector, especially in the aftermarket, who have developed hugely successful export business with EMIA Scheme assistance.

Automotive exports to the UAE increased by 800% over the first three years of participation with a National Pavilion in Dubai. South African products have a reputation for quality, value for money and reliability of supply and this works to their advantage when SA exporters are exposed at large international trade shows. That is the “yes “part’: the ‘no’ part comes from the surprising fact that many of our automotive parts and component manufacturers, big and small, seem not to have realised the very real opportunities that await them in international markets.”

“Continuous efforts to grow the SA automotive industry’s export business are imperative, especially in view of doubling vehicle production in the country to 1, 2 million units per annum by 2020 with an associated broadening and deepening of the component production basket in the country

Robert Kaiser has been intimately involved in the motor industry for more than 30 years; he established Retail Motor Consultants in 2002, a consultancy providing management, marketing, communications and business relationship management services and ,through an associated company, BBBEE services for both corporate and SME businesses.

as well. Failure to rise to the challenge in pursuing export opportunities could result in a stagnation of exports and thus growth. I would encourage automotive manufacturing companies to utilise the EMIA scheme, as export business could be a powerful key to profitability, expansion and growth and a catalyst for developing South Africa’s industrial capacity.”

For more information on the EMIA Scheme, go to www.dti.gov.za and select the acronym “EMIA” in the “search” function.

The Dept. of Trade & Industry has issued an invitation to SA manufacturers in the automotive sector to participate in the SA Pavilion at Automechanika Frankfurt, Germany, 16-20 September 2014; the closing date for receipt of applications to participate is 16 April 2014.

For more information on this opportunity, contact Mayanda Kondile Tel 012-394-1616 or e-mail MKondile@thedti.gov.za or Gordon Gleimius Tel 012-394-1024 or e-mail ggleimius@thedti.gov.za

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PAGE 35

AutoForum - March / April 2014

Wesbank unveils its forecast for 2014

A

t this year’s 29th Wesbank sponsored Car of the Year (COTY) event, the bank took the opportunity to once again unveil its predictions for the industry’s year ahead.

CEO for WesBank, Chris de Kock, mentioned the glut of negative press we have experienced in the last few months the Rand’s dramatic slide, continual labour unrest, low growth rates, political uncertainty and closer to home, rising interest rates and vehicle prices. He expressed his belief that despite the hardships currently being felt, this cycle will not be anywhere near as bad as the previous cycles that the South African motor industry has been through lately, in particular the recession and credit crunch of 2008.

“The motor industry has had to endure severe boom or bust cycles which makes managing a business extremely difficult, let alone a production plant,” says De Kock. “CPI is likely to peak at around 7% in this cycle meaning that interest rates should not have to be hiked to the same extent as in previous cases, such as when prime reached 23% in 1998.”

De Kock went on to explain that this current cycle is therefore not as before, caused by an inflationary event, but is rather a function of the economy rebalancing from consuming or importing to manufacturing and exporting.

He pointed out that exports are already showing signs of a recovery and there is every chance that - led by the automotive industry - South African manufacturers can, and will, make the best use of this opportunity to boost export quantities.

He added that the fact that the motor industry should not see any further strike action until 2016 adds further impetus to this situation, and strong export volumes also have a positive implication for the local production due to improved economies of scale.

PAGE 36

The CEO said there is little doubt that the consumer will be under stress due to: rising inflation, higher interest rates, record fuel prices and e-tolls. However, provided that the interest rate cycle is reasonably shallow and the hikes are introduced slowly and smoothly, the consumer is in a far better position entering this cycle than in previous cases.

At the same time, he adds, salary increases are still forecast to run ahead of inflation resulting in a small growth in disposable income.

According to data released from the National Credit Regulator, there is a growing number of credit active consumers, meaning that there are more people entering the market looking to purchase vehicles and services. A great majority of these consumers fall into the middle income group who are known to spend a sizable portion of their income on transport and related expenses.

De Kock added that the current credit market has also improved - in a post-NCA environment with heightened legislation and regulation, banks have been more responsible with their credit profiles, particularly in the vehicle finance sector, resulting in a greater number of credit-worthy customers.

WesBank’s 2014 Naamsa prediction

Over the past 7 years the WesBank National Association of Automobile Manufacturers of South Africa (Naamsa) market prediction has, on average, been less than 1% off the mark.

Last year WesBank’s forecast for 2013 was that it was going to be hot and sunny with some light showers emerging later in the year. 2014, its says, will be more of the same, depending on which vehicle franchise one is invested in.

The forecast warns that risks to the prediction include: the exchange rate weakening significantly more than anticipated; inflation significantly exceeding target bands for longer than expected; the South African Reserve Bank increasing rates significantly higher and more aggressively than anticipated; and possible political instability.

PAGE 37

AutoForum - March / April 2014

INNOVATIONS

AutoForum - March / April 2014

The latest automotive technology

Wireless charging for future Toyotas

T

oyota has announced that it began verification testing last month of a new wireless battery charging system it has developed for vehicles that use an electric powertrain.

According to the automaker, recharging a Toyota plug-in hybrid or all-electric vehicle could in future be as simple as parking the car. The new technology allows a vehicle to be charged simply by parking it in alignment with a coil set into the surface of the ground. This, it says, makes the process simpler and easier, dispensing with cables and connectors.

The innovative new charging system transmits electricity using magnetic resonance created by changes in magnetic field intensity between a transmitting coil in the ground and a receiving coil in the car. Its creators explain that it is designed to reduce any loss in power transmission efficiency caused by misalignment, or height differences between the coils.

Toyota confirms that it is ensuring that any electromagnetic interference with nearby

PAGE 38

equipment will be minimised, and that the transmitting coil in the ground has been made robust enough to withstand vehicles driving over it. It has even developed a system to help the driver align the car correctly – by including a function for its Intelligent Parking Assist system that shows the position of the transmitting coil in a parking space.

The test programme involves three plug-in hybrids used by homes in Japan. It will assess user satisfaction, the system’s ease of use, misalignment rates and charging behaviour, such as how often charging takes place and timer-based charging it used.

Toyota will use the test results to develop the technology further, with the ultimate aim of bringing the system to market. The automaker believes its commercialisation will help promote the use of electrified vehicles and mobility options that are smarter, easier to use and kinder to the environment.

Mirror smarts

N

issan Motor Company has announced that it has developed a Smart rearview mirror, which it says, is the world’s first LCD monitor that provides clear rearward visibility under various conditions as well as the ability to switch between the LCD monitor and the traditional rearview mirror.

provides unobstructed images of the rear flanks, making traditional obstructions associated with traditional rearview mirrors, such as C-pillars, a non-issue. This helps the driver grasp the traffic conditions within the area in a much more efficient manner.

Set to debut at the 2014 Geneva Motor Show, the Smart rearview mirror is housed within the structure of the rearview mirror, with a built-in LCD monitor that can be activated in place of the conventional mirror. A high-resolution camera mounted on the rear of the vehicle provides the driver with a clear unobstructed view of the rear flanks, allowing the driver to check blind spots and other traffic conditions. The camera projects a clear image onto the monitor to provide the driver with a better view for a more comfortable driving experience.

The automaker explains that its Smart rearview mirror is equipped with a newly developed high-performance, narrowangle camera and a specially-shaped LCD monitor. Matching a standard wide angle camera lens to this unique monitor could not be done since the images from the camera, when adjusted to the special monitor size, produced a lowresolution image resulting in an insufficient picture quality. To rectify this challenge, a 1,300,000 pixel narrow-angle camera was developed so that picture quality would not be sacrificed when formatted for the specially designed monitor.

An additional feature of the Smart rearview mirror is the versatile switch function. Operated by a control located at the bottom of the mirror, the driver can utilise the traditional rearview mirror system, or with a simple flip of a switch, gain an unobstructed rearward view behind the vehicle embedded on the LCD display.

Also, conventional monitors possess an aspect ratio of 4:3 or 16:9, but these traditional-sized aspect ratios could not adequately be displayed in a rearview mirror. Therefore, an LCD monitor with a unique aspect ratio of approximately 4:1 was developed.

The Smart rearview mirror provides a wider and clearer view when compared to a standard mirror. The LCD monitor

Nissan is planning to introduce the Smart rearview mirror to global markets in 2015.

PAGE 39

AutoForum - March / April 2014

INNOVATIONS

Training

AutoForum - March / April 2014

Ongoing learning and education for the sector.

TRAINING

GM renews support for Mechatronics programme

PAGE 40

G

eneral Motors South Africa (GMSA) has announced that the company has renewed its support for the GMSA Chair in Mechatronics at Nelson Mandela Metropolitan University (NMMU).

The automaker believes that this support contributes to developing a vital skills base for the automotive industry. The company, together with the current holder of the Chair, Professor Igor Gorlach, were instrumental in establishing the programme in NMMU’s Engineering Faculty in 2009. The partnership was renewed for this year.

GMSA Training & Organisational Development Manager, Wayne Osborne, comments: “Mechatronics is a scarce skill and a sought-after qualification in today’s highly automated automotive manufacturing environment. We were happy to continue our involvement with the University as the Chair has proved itself in

strengthening Mechatronics at NMMU, to the benefit not only of GM but the automotive industry as a whole.”

Mechatronics combines a number of aspects of engineering, including mechanical and electrical engineering, robotics, programming and computer-aided design. NMMU is the only university in the Eastern Cape offering a Bachelor of Engineering degree in Mechatronics, and there are currently approximately 120 students at various levels of the programme. GMSA’s support for the Chair includes students doing their practical work at the company, getting involved in GMSA projects and gaining valuable on-the-job experience.

According to Osborne, the deal is a winwin for all concerned, and the company has already employed several graduates from the programme and will continue to do so.

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Deep Cycle Applications: Robust design and the addition of a membrane to both positive and negative plates results in a battery that is more able to withstand ongoing discharging and recharging and has twice the cycle life of standard flooded automotive batteries under start/stop* conditions.

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PAGE 41

TRAINING

AutoForum - March / April 2014

iATN heads into the classroom

T

he International Automotive Technicians Network (iATN) will now be offering a new programme that allows automotive instructors to activate iATN’s premium access membership features for their school’s current students and automotive instructors.

With this programme, it explains, instructors and students can use iATN in the classroom to learn from the hundreds of thousands of real-world automotive repair experiences posted on the network. They also can access iATN’s many additional features, including its extensive search engine to search millions of Knowledge Base documents in the FIX Database, Forum Archives and Waveform Library.

The premium access program for schools is available for a single fee of $45 (US) per month, per school location.

To take advantage of this new programme, the primary account holder should upgrade an existing iATN account to Business+ Premium Membership (http://iatn.me/6My) or join as a new member (http://iatn.me/6MC) and choose the Business+ Premium Membership account type. Once the Business+ account has been activated, students and instructors can be added as sub-accounts by contacting iATN at support@iatn.net .

As Scott Brown, iATN President comments: “Back in 2011, we launched the Student Membership programme that was well received. Since that time, as I’ve visited campuses and spoken with instructors, it became clear that there was more we could do to provide a higher level of access for students.

Beginning in January, we designed the new premium access programme, that brings many of iATN’s valuable assets to the schools for students to take advantage of in the classroom.

With this new programmme, the student has the opportunity to see what’s occurring within the industry they are about to enter, which should bring a higher level of preparedness to the individuals taking advantage of this offer.”

iATN will also be lowering the age requirement for Student Memberships from 18 to 16 years of age, in order to accommodate requests from high school instructors who were interested in using iATN in the classroom, but ineligible due to the age of their students. With Student Memberships, instructors can easily invite their students onto iATN and within minutes, they will have a “read-only” iATN account to use in the classroom.

Student Memberships are available to students who are attending automotive educational training courses at a high school, college, vocational school, or similar, and who are referred by an educator/instructor who is an existing iATN member. The “read only” caveat is in place until students “graduate” to a full membership, at which time they are able to post to iATN. Instructors who would like to invite their students to join iATN should visit: http://iatn.me/6Mx. As always, instructors can use the iATN Educators Forum to share teaching methodologies with their peers in the automotive education field. iATN was founded in 1995 and is the largest online community of automotive technicians, repair shop owners and other allied service professionals in the world with more than 79,000 active members from 160 countries. iATN members exchange technical knowledge with their peers around the globe, collectively sharing over 1.9 million years of experience.

When contacted for confirmation of whether South African training institutions would be able to make use of the programme, spokesperson Monica Buchholz commented: “The programme is available to South African businesses, with the main criteria being that it has to be an institution where there is a physical training programme at a single location with instructor lead curriculum.”

For more information, contact support@iatn.net.

PAGE 42

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The quality of a supplier is also measured by the quality of the information that he makes available to his partners.

PAGE 43

TRAINING

AutoForum - March / April 2014

Winterveld enterprise hub launched in Gauteng

T

he Department of Economic Development recently officially opened the Winterveld Enterprise Hub. The launch forms part of the Department’s strategy to revitalise township economies, increase the skills profile for young people and forge sustainable partnerships for employment creation in Gauteng – of which, Township Enterprise Hubs form an integral part.

The Winterveld hub has an automotive focus and will provide on-site support for small businesses specialising in tyre fitment and wheel alignment; panel beating; auto body repairs and spray painting; auto spares; general motor mechanics; car wash and valet services.

According to the Department this hub will provide budding entrepreneurs in a number of ways, including: training on the latest cutting edge technologies in the automotive sector; incubation, mentoring and skills transfer on technical and financial management and business acumen; and shared services and facilities within the hub facility, which will also be made available for small businesses around the area.

The launch was attended by Gauteng Premier Nomvula Mokonyane together with the Economic Development MEC Mxolisi Xayiya. Mokonyane commented: “We come from a past where black enterprise was significantly stifled and suppressed; these hubs are a creative way of nurturing existing enterprises in our townships to ensure their success and contribution to our job creation drive.”

MEC Xayiya added: “The hubs are designed to provide economic relief to some of the most economically depressed

PAGE 44

areas of the province. This is an innovative way of revitalising township-based businesses. They provide a golden opportunity to formalise and expand existing automotive businesses in this area.”

Xayiya also said that the initiative would formalise township automotive businesses and enable young black entrepreneurs and women to participate in the automotive industry.

According to Gauteng’s Automotive Industry Development Centre (AIDC) CEO Barlow Manilal, there is currently a discussion underway between the Department and automotive companies about obtaining motor manufacturer accreditation for the entrepreneurs operating in the hub.

“This is one way of providing an enabling environment for viable and sustainable small businesses which can make a direct impact on the economy. Global evidence suggests that both funding and incubation are crucial elements for small business success. These hubs are an integral part of our plans to foster mentorship and create partnerships for longterm business sustainability and job creation,” he said.

The Department explains that Township Enterprise Hubs compliment its work in training young artisans to play a key role in furniture manufacturing, metal fabrication, jewellery manufacturing, tooling and foundry industries. The launch function was attended by around 3000 Winterveld residents, and 90 young people were awarded training certificates.

VWSA congratulates first DP graduates

V

WSA has just marked the graduation of the first five candidates in its pilot Dealer Principal Apprentice Programme (DPAP).

The local arm of the automaker believes that this is the first step towards the realisation of its vision to see transformation in its dealer network.

The company explains that DPAP was conceptualised four years ago – its aim being to develop a talent pool of black dealer principals for the Volkswagen Group South Africa network. At the same time, it was aimed at serving to foster “the true and fair spirit of transformation”. The programme is the first in the automotive industry and has been customised to meet the requirements of VWSA. The programme involves candidates completing a 30-month long training that covers subjects such as retail business, finance, leadership and general management. It was developed by Optima Training, whose services also include coaching and mentoring of the candidates.

According to Haley Botha, Manager: Dealer Development: “The benchmarking and research that we conducted helped us to put together a comprehensive programme that resembled a mini-MBA. We decided from the outset that our

Standing: Ashley Gengiah, Xolani Mkhwanazi and Bilal Bhoja.

Seated: Smita Odhav and Marcia Mayaba.

programme should provide much broader training exposure, which most of our current dealer principals have never had the privilege of.”

And it seems to have taken the graduates to a new level already. Three of the five candidates have been promoted to Dealer Principal positions - taking the number of black Dealer Principals in the VWSA network to 17. The group has 165 dealerships in SA (Volkswagen – 106; Audi – 44 and Volkswagen Commercial Vehicles – 15).

Nonkqubela Maliza, Director: Corporate and Government Affairs commented: “The programme was borne out of Volkswagen Group South Africa’s commitment to a meaningful and sustainable transformation. As Volkswagen, we want to increase the number of black dealer principals in the dealer network and ensure that they are adequately equipped and prepared for their new challenges.”

One of the candidates, Marcia Mayaba – a Dealer Principal at Volkswagen Lindsay Saker Alberton – was bestowed with the Dealer of the Year award in 2013 by the Lindsay Saker Group.

Xolani Mkhwanazi and Ashley Gengiah are Dealer Principals at Volkswagen McCarthy Constantia and Audi Vereeniging respectively.

PAGE 45

AutoForum - March / April 2014

Loaded questions for 'Lorries' - Dave Scott

Accountants love business forecasts based on a steady, positive extrapolation of the past into the future. This makes planning so easy. But it’s not like that. And the problem is that a forecast drives the system. Take new truck sales for example.

Too much optimism results in overstocking and at one million Rand a pop, just 30 extra-heavy 6 x 4 truck tractors becomes a R30 million headache. The reconditioning factor of keeping old stock fresh is a costly exercise on its own, while the bank wants its interest charged on an escalating prime rate and desperation to de-stock leads to distress marketing where profit gets slashed. Eisshhh! Why be in this business?

It is said that a pessimist is an experienced optimist, but being understocked in trucks is deadly for market share, customer satisfaction, shareholder expectations, delivery times, retention of good sales people, and getting customers to wait in severely competitive conditions.

So what is happening in 2014? How did 2013 turn out?

Which truck market segments will grow, stay steady or decline? Never mind general market conditions, how will we run our own race in our own market territory? Which truck competitors will be a challenge and are we launching a new model that demands stocking up for the launch? There’s nothing worse than a launch without stock to match the forecast.

The total 2013 vehicle market only grew just over 3%, while trucks over 3,500kg gross vehicle mass (GVM) grew by 11% the question is: is the truck market growth sustainable?

Total vehicle market

2012

2013

% Change

1

Passenger

442604

450440

1.70%

2

LCV

160174

169234

5.66%

3

Truck Market – over 3,5t GVM

27841

30946

11.15%

4

Total Market

630619

650620

3.17%

What happened inside the total truck market is more important than exploring the total figure. We tend to think of trucks in terms of extra-heavies that get in the way on freeways (e-Tolled ways) but the medium segment, with payloads from around 1,5t to 4t, is the star performer. And big buses – over 8,5t GVM – are in decline. Now we can ask the loaded question: are the truck market segments sustainable?

PAGE 46

Year-on-year Truck Market segment changes Segment

2012

2013

% Change

1

Medium – 3,5t to 8,5t GVM

10104

11595

14.76%

2

Heavy – 8,5t to 16,5t GVM

4982

5477

9.94%

3

Extra-heavy over 16,5t GVM

11621

12828

10.39%

4

Heavy Bus over 8,5t GVM

1134

1046

(-7.76%)

5

Total Truck Market

27841

30946

11.15%

How does Wesbank see the 2014 vehicle market? At the Car of the Year banquet in February 2014, the ‘famous’ Wesbank forecast looked as follows for this year:

NAAMSA 2013 actual

WESBANK 2014 forecast

% Change

Passenger

450440

441432

(2.00)

LCV

169234

172618

2.00

Truck 3,5t > & Bus 8,5t > GVM

30946

32183

4.00

Total industry

650620

646233

(0.60)

The problem is that the fuel price is reaching for R16/litre and prime rates are moving upwards. Says Mike Schussler ‘The sceptical optimist’ at Economists.co.za: “The risks are on the Rand and SARB may have to lift rates more than many think.”

It’s the exchange rate that is making the fuel price spike. Here are the risks that Wesbank include in their forecast: • • •

•

If the exchange rate weakens significantly more than anticipated; If inflation significantly exceeds target bands for longer than expected; If the South African Reserve Bank increases rates significantly higher and more aggressively than anticipated; Possible political instability.

Dave Scott is a member of the S.A. Guild of Motoring Journalists, and is a monthly contributor to the press on transport and trucking related subjects. In 2002 and 2003 Dave Scott was the S.A. Guild of Motoring Journalists winner of the category ‘Business Motoring’. As a member of the S.A. Institute of Tribology he takes a keen interest in the application of lubricants to road transport maintenance and the cost of ownership.

His key writing focus is on fleet management including the technology of trucks and road transport.

PAGE 47

AutoForum - March / April 2014

COMMERCIAL VEHICLES

So assuming that Wesbank is ‘well-informed’, the outlook for trucks is actually positive and could look like this in segments

Year-on-year Truck Market segment changes

Segment

2013

2014

% Change

1

11595

13433

15,0

Medium - 3,5t to 8,5t GVM

2

Heavy - 8,5t to 16,5t GVM

5477

5200

(5,0)

3

Extra-heavy over 16,5t GVM

12828

12650

(1,3)

4

Heavy Bus over 8,5t GVM

1046

900

(1,2)

5

TOTAL TRUCK MARKET

30946

32183

4,0

Why should medium trucks carry the day, when the remaining segments are in decline? In the face of rising costs, business is reducing inventories, demanding more frequent and smaller deliveries – especially for seasonal market conditions. The

PAGE 48

latter makes medium trucks work harder and grow this segment.

Heavy trucks are a much bigger fixed investment decision and more subject to the impact of prime rates and high fuel prices. Remember that fuel is around 45% of the total cost of ownership operating an extra-heavy rig. The weak Rand has also made extra-heavies very pricey – so decisions to buy heavies could be delayed.

There are just too many competitors for the size of our truck market (never mind the insane competitive situation in the car market). Just seven truck manufacturers own more than 70% of the 2013 total market in cab-over design trucks - excluding vans and heavy buses. Everyone else needs at least a 5% share to survive – someone will get hurt in 2014.

The thing about forecasting is the need for ‘brutal truth’.

You can play with numbers and spreadsheets, but in the end the market will not play with too much optimism.

And worth repeating is Schussler, who said: “The risks are on the Rand…………”

Reference: WESBANK SAGMJ’s CAR OF THE YEAR 2014 – press release Mike Schussler - Economists.co.za

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AutoForum - March / April 2014

COMMERCIAL VEHICLES

Delivering commercial value from your fleet - Nicholas De Canha

O

ptimisation is not just a buzzword. In any business, optimisation is underpinned by reducing risks and cost, whilst improving operational efficiencies and productivity outputs.

Broadly put, any company with a fleet of vehicles – be it one or many vehicles – is faced with three key risks: · Financing costs for the fleet · Maintenance costs for the fleet · Human risk – particularly driver behaviour Each of these risks also incurs considerable cost to company, but a properly structured outsourced fleet management solution can significantly reduce the fleet upkeep cost to company and absorb all risk associated with the owning and/or maintaining the vehicle(s).

Looking at the first of these priority risks, when financing the purchase of vehicles, the cost of these assets will often take up a large portion of the company’s balance sheet, especially if the company is a logistics company. As the owner, the company is also then liable for the residual value on these vehicles – but residual values fluctuate, and the more optimistic the estimate, the more risk to the business. Through a leasing model, however, the purchase is financed off balance sheet and the residual value risk is taken entirely by the leasing company. This essentially means that the asset sits on the leasing company’s balance sheet and not the client’s and the auditors are happy with this. The monthly cost of the lease is the only area that

PAGE 50

the lease affects the financials of the client. Further, whatever residual value the leasing company puts on the asset as part of the rental, is locked in, and the leasing company takes any risk on that value and handles the disposal of the asset after the term of lease. For business owners this means that the return on assets is boosted, and there is simpler more predictable accounting for the expense.

Maintenance and uptime, however, are the biggest concerns for any business running medium to large commercial vehicles.

Also, not only are those companies more sensitive to uptime and keeping their working fleet working, it’s also much more difficult to substitute a commercial vehicle with another vehicle - especially when there are specialised bodies - and continue with business as usual, as these working assets play a far more significant role in the business and being able to delivery on services.

To manage this in a full maintenance lease (FML), the relationship between the client and leasing company is far closer and underpinned by more sophisticated service level agreements (SLAs), as companies running commercial vehicles often require more services; like supporting their air-conditioning units, refrigeration units and monitoring vehicle off line data rates, for instance.

Added to this, a fleet leasing company worth its salt is able to provide nationwide agreements that guarantee better and uniformed control of vehicle uptime, by monitoring parts stock

Nicholas De Canha is the Managing Director of Imperial Fleet Management.

USA TECHNOLOGY levels and being able to manage authorisations through a large dealer network and/or tyre suppliers nationwide.

Cost control is another feature of the maintenance contracts in a FML – teams of personnel scrutinise invoices to ensure discounts and labour rates are in line. FML contracts also absorb the risk of maintenance – should a truck perform well or poorly, the rate in the contract remains the same –

Drivers play as important a role in keeping the vehicle in good condition, which is why driver behaviour is highlighted as such a priority risk component to businesses. this is budgeting heaven for customers, and also removes a key risk in managing a commercial vehicle fleet.

Maintenance though can only do so much to guarantee uptime of vehicles. Drivers play as important a role in keeping the vehicle in good condition, which is why driver behaviour is highlighted as such a priority risk component to businesses. Tracking technology, however, has become so sophisticated, that reviewing the data can provide insights on what impact driver behaviour has had on the wear of key parts - like tyres, brakes, clutch and gearbox – and also gives a closer determinant in the maintenance rates.

The better the data that can be provided, the greater the grounds a company has to engage with their drivers and/or implement campaigns to change behaviour where needed, which in turn can reduce costs even further and improve overall business performance. Good FML companies understand this and work with their clients to highlight bad driver behaviour – just one way of keeping down costs.

Managing a fleet isn’t just about getting vehicles on the road, but rather keeping them there - and there are several alternatives to in-house management available locally. Be it a collaborative or completely outsourced fleet management solution though, a leasing company who is able to offer flexibility, higher vehicle uptime rates and significantly reduced the cost and risk of running your fleet is one worth partnering with.

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PAGE 51 Unit 9 Edison Park, 183 Edison Crescent, Hennops Park, Centurion, 0157

AutoForum - March / April 2014

SHOW TIME

Show Time AMR 2014 Show report - Warwick Robinson

B

raving what was reported to be Beijing’s worst pollution in 20 years, crowds were lined up to visit the first public day of AMR 2014 in late February.

But a couple of mm of rain and the tiniest of breezes blew away the haze with 300m visibility turning into 30km visibility the very next day!

SHOW TIME

Chinese local trade remains an important part of the show’s success - the size and scope of the Chinese market is still exponentially larger than our own local market - and is still on the rise. But that said the show remains an important stop for distributors from around the world and visit they do. The organisers go to considerable effort to ensure that all stands are manned with english speaking representatives who are eager to draw in potential clients.

PAGE 52

For experienced distributors sourcing product lines from Chinese manufacturers, the show provides a valuable opportunity to firm up relationships, and visit their supplier factories to see new product models and sometimes brief market-specific requirements and specifications.

Some of the Australian, European and South African importers that I saw at the show were looking for new suppliers as well and from reports found the show worthwhile.

However all expressed a similar belief that even with 7 halls packed with exhibitors, in some categories and predominantly in the equipmemnt sector - the majority of exhibitors are actually traders themselves, who in many cases are being supplied by the same manufacturing factories around the region.

Contact your nearest PIA branch for more information on our full range of Motopart products Bloemfontein

Durban

George

Nelspruit

Cape Town

East London

Johannesburg

Port Elizabeth

Tel: (051) 506-0700 Fax: (051) 447-8336

www.pia.co.za CH3020

Tel: (021) 590-7500 Fax: (021) 591-5033

Tel: (031) 533-5300 Fax: (031) 569-6576 Tel: (043) 703-8000 Fax: (043) 743-8418

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Pretoria

Tel: (012) 377-7500 Fax: (012) 377-3896

PAGE 53

SHOW TIME

AutoForum - March / April 2014

Using the past 3 years’ shows as a benchmark, this years’ show seemed a bit quieter in terms of international visitors, but all the buyers I spoke to seemed happy with what they had achieved in Beijing, and see value in what is touted as the world’s third largest aftermarket show.

A strong focus on education and training also formed a focal area at the event, with a product experience centre offering instructors and students the opportunity to operate products in an environment which conveyed a good idea of China’s workshop model.

AutoForum’s partner publisher Michel Malik, of Bodyshop Australia, received a special award from show organizers Traders Link for his efforts in promoting the showing internationally and working with them in terms of the AMR offering to international visitors. AutoForum also proudly received an award as one of AMR’s international media partners, for our ongoing participation at the show.

An agreement of co-operation was signed at the show with the Australian, Canadian, Indonesian, Korean, Malaysian, Singaporean and host Chinese maintenance and repair associations.

To highlight this year’s theme of energy efficiency and emissions reduction for “greener repair”, the AMR recommendations campaign launched. Over 130 different enterprises entered 240 different products of which 70 earned recommendations and were on display highlighted by AMR branding, and announced at an award ceremony on the opening night of the show.

PAGE 54

The aim of the agreement is to develop enhanced opportunities in overcoming challenges faced by the industry, and ultimately to increasing sustainability for the sector globally.

As per the past 3 years, AMR will be offering an exclusive accommodation offer to AutoForum readers again in 2015, so keep your diary open for 9-12 April next year and keep an eye on autoforum.co.za and autoforumza on facebook and twitter for details.

Shell combines PurePlus with Active Cleansing Technology.

The new Shell Helix Ultra range of fully synthetic motor oils, formulated with patented Shell PurePlus Technology, was recently launched alongside the restructured Shell Helix core portfolio.

This Helix Ultra range combines the Shell patented PurePlus Technology with proprietary Active Cleansing Technology, to deliver higher levels of protection against build-up of engine deposits and represents the most advanced products in the Shell Helix portfolio. The range offers up-to-date industry specifications and OEM approvals, with new packaging designed to deliver more trade recommendation and consumer choice. Key product information, such as viscosity grade and fuels stability, is more prominent - to make product identification simpler and quicker. On top of this, the labels now feature QR codes that link directly to supporting information, which can help drivers learn more about their lubricant.

Shell says that its investment in a revolutionary technology process - that converts natural gas into a pure, clear base oil that has virtually none of the impurities found in crude oil has resulted in the PurePlus Technology producing base oils.

The latter provide enhanced viscosity, friction and volatility performance, compared to traditional group II and group III base oils. The brand explains that the unique combination of PurePlus Technology with Active Cleansing Technology enables Helix Ultra to deliver even higher levels of cleansing and protection.

Raymond Abraham, Shell Commercial Technical Manager says: “Shell Helix were the pioneers of Active Cleansing Technology and we believe that our new Shell PurePlus Technology is a significant step forward that will allow us to maintain our leadership in this field.” Raymond continues: “Shell Helix Ultra is our most advanced motor oil yet; it is approved by leading OEMs across the world, and is widely used as factory-fill oil by vehicle manufacturers such as Ferrari”.

In addition to enhanced cleansing, Helix Ultra provides superior wear and corrosion protection – which Shell says helps extend engine life and reduces maintenance costs.

The range also helps to provide superior resistance to oil degradation beyond the latest industry standards, even at the longest manufacturer-recommended oil drain intervals.

Alongside the launch of this new top-tier range, the Shell Helix core portfolio has been restructured to help customers to identify the best lubricant for their business. Shell LubeMatch – an on-line oil recommendation system - and Shell LubeAnalyst – an early warning system monitoring lubricant condition – are touted as offering the best customer service.

The new Helix SN range is designed to meet the latest industry specifications ILSAC GF-5 and API SN, which demand improvements in fuel economy, emission system protection and engine oil robustness for petrol engines.

PAGE 55

Aftermarketplace AutoForum - March / April 2014

AutoForum - March / April 2014

Gabriel’s new suspension tester for Bakkies, 4x4’s MPVs and SUVs

G

abriel has upgraded its successful passenger vehicle suspension tester range, with the ability to now also cater for vehicles with a maximum axle weight of 2,5 tons, such as bakkies, MPVs and SUVs. Gabriel says that its tester differentiates itself from similar competitive products, in that the software is fully adapted to the SA market and incorporates the entire SA car parq.

The tester covers a total of 17 000 vehicles in South Africa and warns operators to check the vehicle’s tyre pressure as part of the test. The system also provides comprehensive reports of the vehicle’s shock absorber status as well as recommendations on the required part number needed.

Sean Staley, Control Instruments-Automotive Divisional Head – Drive Control, said that Gabriel began investigating the suspension testing market over three years ago but was unable to find a solution that exactly fitted the South African environment.

REINZOADD gets turbochargers off to a perfect start

D

uring normal operation, the turbocharger is integrated into the lubrication circuit and is constantly rinsed with oil after it’s been replaced, it starts out dry.

Only once the engine has been started does the lubrication circuit builds up the necessary pressure to fill the turbocharger with oil due to the delay. This critical dry phase is precisely what REINZOADD is there for, essentially to fill up the turbocharger before the first compression takes place otherwise, the turbocharger will run hot and cause irreparable damage or even total destruction to the engine.

REINZOADD uses the solid lubricant MoS2 to form a heavy-duty lubricating film on all surfaces of the turbocharger to reduce friction and wear with ideal properties for emergency operation. This means that the turbocharger is ready to start right away.

The Dana turbo experts recommend using REINZOADD every time a turbocharger is installed for all designs from conventional turbochargers to ones with variable turbine geometry.

Benefits of REINZOADD lubricant include its being a tested additive for initial turbocharger filling. This has proven itself in daily use, offering an effective combination of additional ingredients and MoS2 allowing you to start up the turbocharger safely right after installation.

This reduces friction and wear and improves turbochargers’ emergency operation properties and extends the service life of the turbo.

Reinzoadd is distributed by Intrade, for more information contact them on 011 432 2667.

PAGE 56

“In 2011 we narrowed our search down to two international companies and solutions. After an extensive evaluation we selected one of the world’s most advanced systems and have, over the past 12 months, worked with local retail stores and overseas engineers to deliver an effective retail solution, including customised software and reporting capabilities.”

“As part of the next phase of the programme, the suspension tester upgrade is now available for 4x4 vehicles and SUVs. Gabriel’s aim is to make shock and suspension testing easy for its workshop and fitment centre clients.

It will provide a comprehensive and accurate alternative to the current equipment on the market, that utilises the traditional ‘bounce’ test or testers, which are not suited to the local market.”

The customer and fitment centre reports have also been upgraded. There are now separate colour-coded reports that provide a graphic representation of the results. “In addition, in what is believed to be a first, Gabriel has included its entire parts list for the South Africa car market into the system’s database, recommending the vehicle’s part number as well as alternate Gabriel part numbers.

This, coupled with the quotation format, enables retail staff to easily quote on the correct part and help conclude the sale quicker.”

The programme is linked to a national safety and education campaign for consumers to identify worn shock absorbers, known as SafeZone 2.6. “The Gabriel Safe Zone 2.6 programme objectives at retail level are to create a simple, unified two-way value proposition for each retail outlet and educate the consumer and retail outlets on the importance of regularly checking their shocks,” he said.

New Modis Ultra from Snap-on Diagnostics

S

nap-on Diagnostics has launched the new Modis Ultra, an integrated diagnostic tool, that also acts as a lab scope, graphing multi-meter and component tester.

The unit boasts a 2-channel high speed lab scope, 8” touchscreen or 4-way thumb pad, OEM specific coverage for over 65 makes, and super fast boot up in under 5 seconds.

It includes 2-channel digital / graphing multi-meter, 2-channel high speed lab scope, guided component tests and PC connectivity via a USB port.

> No Contact with Rim > Fast Clamping > Full range of tyre sizes > Lightweight and Durable > Accurate results > Ergonomic design > No extensions needed > One size fits all > Super Short Rollback

The unit currently retails at R52, 590 Excl vat. Companies or individuals can apply for a Credit Purchase Option through Snap-on’s own Accredited Finance Division “Snapfin”, which offers an affordable deposit and competitive interest rate for a payment period of up to 24 months. It is also available for payment on normal 30 day company account. Terms and Conditions Apply.

Contact Snap-on Diagnostics on 0861 762 766 or visit the website www.snapon.co.za

All Equipment available in Red / Blue David Barendse 082 450 6109

Tel: 011 908 5199 Fax: 011 864 1588 gts@telkomsa.net

Proud suppliers of the following top brands:

PAGE 57

DIRECTORY LISTING

Aftermarketplace Directory

To advertise your listing in AutoForum Aftermarketplace Directory contact us on 011 466 3733 or email: info@AutoForum.co.za

AUTO ELECTRICAL Auto Cosmos - Electrolog

Electronic Parts (Electrical) Catalogue

012 327 6210

Bosch

Parts, Accessories & Batteries

011 651 9600

Parts Incorporated Africa

Automotive Components & Accessories

011 879 6000

Trysome Auto Electrical

Parts, Accessories & Batteries

011 823 5650

Connoisseur Automotive

Air Conditioning Specialists

021 419 7188

Highveld Garage Equipment

Air Conditioning Specialists

012 330 0540

Snap-on Equipment

Diagnostics Equipment

0861 762 766

Spray Booths, Chassis Straighteners & Welding Equipment

011 444 6454

Aer-O-Cure

Pressure Washers & Vacuum Cleaners

011 444 6454

Highveld Garage Equipment

Pressure Washers & Vacuum Cleaners

012 330 0540

NAPA/Midas Group

Tools & Garage Equipment

011 879 6000

Aer-O-Cure

Electronic Chassis Straighteners

011 444 6454

Beissbarth

Wheel Alignment Equipment

011 651 9600

Bosch

Diagnostic Equipment

011 651 9600

Equipment Africa

Diagnostic Tools & Garage Equipment

012 653 0364

Highveld Garage Equipment

Engine Analyser & Diagnostic Scanners

012 330 0540

Integrated Marketing

Sales, Service & Repairs to all Equipment

012 664 3556

Leaderquip

Wheel Alignment Equipment

011 334 1680

Launch

Air Conditioning Diagnostic Equipment

011 397 3073

Midas

Diagnostic Tools & Garage Equipment

011 879 6000

Snap-on Diagnostics

Diagnostics Equipment

086 176 2766

Wheelquip

Wheel Alignment Equipment

021 949 0010

Aer-O-Cure

Tools & Garage Equipment

011 444 6454

Beissbarth

Wheel Alignment Equipment

011 651 9600

Bosch

Diagnostic Equipment

011 651 9600

Equipment Africa

Tools & Garage Equipment

012 653 0364

Highveld Garage Equipment

Tyre & Lifting Equipment & Tools

012 330 0540

Integrated Marketing

Sales, Service & Repairs to all Equipment

012 664 3556

Ital Machinery

Brake & Clutch Machinery

011 483 3737

John Bean - Snap-on Equipment

Wheel Service Equipment

086 176 2766

Leaderquip

Tyre & Lifting Equipment & Tools

011 334 1680

Launch

Tyre & Lifting Equipment & Tools

011 397 3073

NAPA/Midas Group

Tools & Garage Equipment

011 879 6000

Snap-on Tools

Tools & Garage Equipment

086 176 2766

Wheelquip

Wheel Service Equipment

021 949 0010

Alfa Brake Drums & Discs

Brake Drums & Discs

011 608 0801/3

AUDI Parts

Genuine OE Parts

086 043 4838

Bosch

Parts, Accessories & Batteries

011 651 9600

Federal Mogul Ferodo

Aftermarket Parts & Accessories

011 630 3000

Midas

Aftermarket Parts & Accessories

011 879 6000

Nissan SA

Aftermarket Parts & Accessories

080 064 7726

NAPA/Midas Group

Aftermarket Parts & Accessories

011 879 6000

Parts Incorporated Africa

Automotive Components & Accessories

011 879 6000

Trysome Auto Electrical

Electrical Parts, Accessories & Batteries

011 823 5650

Turbo Exchange

Aftermarket Parts & Genuine OE Parts

011 402 7085

Victor Reinz

Aftermarket Parts

011 432 2667

VW Parts

Genuine OE Parts

086 043 4737

Auto Cosmos - Electrolog

Electronic Parts (Electrical) Catalogue

012 327 6210

Bosch

Automotive Training Courses

011 651 9600

AIR CONDITIONING

BODY REPAIR EQUIPMENT Aer-O-Cure CLEANING EQUIPMENT

DIAGNOSTIC EQUIPMENT

GARAGE EQUIPMENT & TOOLS

PARTS MANUFACTURERS & DISTRIBUTORS

SERVICES

PAGE 58

Secure the future of your workshop!

Bosch - your optimal workshop concept partner

Drive your business forward with Bosch through the automotive evolution and stay ahead of the pack. Bosch offers various workshop concept solutions meeting your individual needs. As a Bosch workshop concept partner you can offer your customer first class quality and you can profit from distinct advantages when partnering with Bosch: Internationally recognised brand Distinctive corporate identity Effective marketing and advertising programme Customer retention programme Comprehensive technical support portfolio, including ESI[tronic], Bosch diagnostics, technical training, hotline and field support Quality automotive parts at competitive prices National Deal Partner support programme Fleet Program Share the success of a strong brand in the workshop market, for more information, visit www.boschservice.co.za, or call Customer Careline 0861 267 247 *Terms and conditions apply

PAGE 59

> No Contact with Rim > Fast Clamping > Full range of tyre sizes > Lightweight and Durable > Accurate results > Ergonomic design