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November 2012

I N F O R M E D

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NEWS AFRICA

NEWS AFRICA

IN PARTNERSHIP WITH AUSTRALIAN BODYSHOP NEWS

A N D

I N N O V A T I V E

Motor manufacturing sector - could it become exempt from Comp Act?

All-New Focus ST

IN N OVAT I ON S

Inside Fuel Station Innovation

APDP Up For Review New Auto Incubator What lightning does to your truck PAGE 1

AutoForum - November 2012

PAGE 2

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November 2012

CONTENTS 10

26

Cover Stories APDP up for review

10

All-New Focus ST

17

New auto incubator

20

Motor manufacturing sector - could it become exempt from Comp Act?

28

Fuel station innovation

44

What lightning does to your truck

50

Trade Talk Highlights of global and local industry news

06

News Forum

50

54

APDP review – focus on its impact on component sector

10

SA on the brink of breakthrough to keep billions in manufacturing sector

12

SA fuel quality catching up with international standards

14

Shockingly advanced

16

The new Ford Focus ST

17

e-Tolls wrong for SA – OUTA

18

Automotive incubator to support small businesses

20

Huge potential exists in the KZN TDM industry

22

CI Automotive's new initiatives strategy

24

Top 100 Best Global Brands of 2012

26

Motor Manufacturing Sector could apply for competition act exemption

28

No matter what you drive, it is expensive – Kinsey Report

30

BodyShop News Painting or cladding your car? Is cladding an option?

32

Increased support for bodyshops

32

Thank you to Ford Motor Company of Southern Africa for our cover photo.

Editorial As we roll towards the festive season, as usual most will be looking back wondering where the year has disappeared to. It seems to have been sucked into the whirlwind of strikes, protests and e-toll arguments that have filled the last 10 months. It has certainly been a challenging year, but there are still many developments to come in the remaining months of 2012, and it is a busy time for the industry.

Autoforum will be out on the streets in January 2013, but you can keep up to date by watching unfolding stories on our website, www.autoforum.co.za, as well as on twitter and facebook for local and international news until then.

EDITOR: CLARE RUTKIEWICZ CONTRIBUTORS: AUSTRALIAN BODYSHOP NEWS ROY COKAYNE Graham Bush

DAVE SCOTT Colin Windell ROBERT KAISER

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

Strikes, sales and the real economy barometer

34

Do you know your business?

38

Deloitte highlights APDP benefits

40

Emerging markets and mobility services are key

42

New and used car inflation slows in Q3

43

Innovations Innovation in fuel outlets: As green and mobile as they come

44

Water recycling system for car wash operations

46

Commercial Vehicles Strikes & spikes

50

Simulation training – Training drivers for less

54

Commercial vehicle insurer pool – Too many fish in the pond?

56

Truck competence proves popular

58

Show Time 58

Aftermarketplace Latest offerings of local products

I N N O V A T I V E

Advertisers Guide

Business Forum

Midas charity golf day

A N D

62

Aerocure Alert Engine Parts Alfa International Audi Parts Auto Cosmos - Electrolog Autopromotec / Blei Autozone BSE Desamark - Diesel Electric Direct Data Equipment Africa Fed Mogul First National Battery Highveld Garage Equipment Hoffman Megaplan Holts Honeywell Integrated Marketing Ital Machinery Leaderquip Macs Automotive Mastercraft MED Midas Group MISA Parts Incorporated PSH Service Holland RAM Robert Bosch Sabat Batteries Snap-on Trysome Auto Electric Vredestein Tyres VW Parts Wheelquip

OBC 37 11 29 64 47 19, 57 13 23 63 33 33 25 27 43 61 17 16, 22 31 9 55 2-3 41 46 49 36 35 21, 67 53 45 51 15 7 39

Windscreen Distributors

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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.

Holts Handy Tips THE DO’s AND DON’Ts OF CAR WASHING & POLISHING

Various quality Holts and Simoniz products are available for washing and polishing your car.

- DON’T polish a car when the paintwork is hot as the polish dries out before you get a chance to apply the polish properly. For easy application use polish & waxes like the Holts Color Match, High Gloss Wax, Liquid Diamond, Original Liquid Wax (which leaves no white residue) or the Metallic Wax for metallic finishes. Always apply and remove polish a small area at a time. Leave Polish or Wax to dry to a haze before buffing off with clean cloth. Wax requires more effort to apply and remove than liquid polish.

As a rule of thumb, polish should be applied every 3-4 months. Failure to polish on a regular basis will result in the paint deteriorating and a dull, rough oxidised layer forming. This gritty substance will then have to be removed with a slightly more abrasive polish like the Holts & Simoniz Color Restorers before attempting to polish.

- DON’T use Methylated Spirits in the windscreen wash bottle, as it could cause the rubbers i.e. wiper blades and windscreen rubbers to become brittle.

- DO use either the Holts & Simoniz Screenwash or Bugshifter products in the windscreen washer bottle. It assists with removing insects and road grime from the windscreen.

Trade Talk

AutoForum AutoForum-- November November2012 2012

www.AutoForum.co.za

Shocks on the run

Valvoline’s full range now available Valvoline has quite a history. A Dr John Ellis, who went to Pennsylvania during the oil rush in the1860s and had the idea of using crude oil for medicinal purposes, ended up realising the potential of developing crude oil into the first engine lubricating oil, originally used in steam engines.

When the first cars appeared on the roads, the obvious applications were extended to lubricate these new engines with Valvoline motor oil. This was specifically modified for the then “astonishing” automobile. The non-stop development of the product range has paralleled the ever-evolving engine technology that appears in our modern vehicles.

Today, more and more advanced vehicles being brought into South Africa are specified to use only certain grades of oil, which have been approved by the OE and are designed to extend the life of the engines in these cars. The Valvoline product line is approved by and meets virtually every OEMs requirements, specifically for the latest vehicle models, and in addition conforms to the most recent EU specifications to provide that extra peace of mind.

Discussing the range at Desamark, Ewald Stark, Sales and Marketing Director, explained how the range is being imported directly from Holland, “Our aim is to get Valvoline into the market at a competitive wholesale price as well as support and offer clients access to the full international range, all through the Diesel-Electric stable”.

This is notably different to the previous distribution model of the brand in South Africa, Stark continued. “Valvoline will now become available at appointed stockists, as well as through the e-CAR service network’s 60 outlets, which offers users a product for almost every application and re-enforces the brand positioning as the professional’s choice”.

Valvoline currently produces an enormous range from engine, transmission and gear oils, steering, brake and clutch fluids, other lubricants, coolants and antifreeze, right through to engine and car care ranges and speciality greases. Made available only through the trade, wholesale enquiries can be made at the 42 Diesel-Electric stores nationwide.

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In line with Safe Zone 2.6, a national safety and education campaign for consumers and the retail trade industry to identify worn shocks, Control Instruments group brand, Gabriel, has launched a mobile shock tester station. This station will allow for further flexibility, enabling shock testing to be done at almost any location.

Control Instruments Automotive Executive Marketing Manager, Sean Staley, says that Gabriel is taking vehicle and road safety to the next level, surpassing any other shock absorber supplier in South Africa.

He adds that the mobile testing station will be used by workshops and fitment centres to complement Gabriel’s recentlylaunched fixed shock testing units.

There are three types of units now available: a stand-alone pit-based unit that is installed permanently, a ground unit that does not require a pit, and a fully mobile unit.

“The mobile testing stations will enable our staff, partner workshops and fitment centres to do shock testing at customer sites or outdoor events. Like the fixed system, it produces full reports covering the status of the shocks and gives recommendations on replacement shocks.”

Safe Zone 2.6 is a safety programme aimed at educating people about vehicle and passenger safety, as well as responsible driving.The name is based on road tests performed on an average passenger vehicle travelling at 80 km per hour with good shock absorbers, as compared to a vehicle with worn shocks. Good shocks will stop a vehicle, on average, 2.6 meters sooner than a similar vehicle with worn shocks.

“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,” Staley concludes.

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Trade Talk

AutoForum - November 2012

www.AutoForum.co.za

FNB provides some independence First National Battery (FNB) has donated wheelchair batteries for the tenth year in a row to cerebral palsy patients at the Forest Farm Centre in Bryanston. It’s a relationship that started about 15 years ago and was initiated by previous FNB Managing Director, John Stroebel.

Euro Zone crisis has adverse affect on local economy The crisis in the Euro Zone, as SA’s largest trading partner, continues to have an adverse effect on the local economy – that’s according to UD Trucks Southern Africa MD, Jacques Carelse.

“As the truck market’s performance is so closely linked to the broader macro-economic environment of SA, it is understandable that the market recorded a decline in sales. For instance, the recent drop in business confidence, is in part, a result of on-going industrial action in various industries, and has had a direct impact on the propensity of fleet owners to buy new trucks.”

Year-on-year statistics showed that sales in the Medium Commercial Vehicle segment declined by 8.6% to 779 units in September, while the Heavies declined by 3% to 448 units. The Extra Heavies experienced a 9.10% drop in sales to 1 026 units, while bus sales continued downward with a 14.8% decline in sales.

Carelse remains positive about the industry’s outlook over the short to medium term. “We still anticipate a total market growth of between 2% and 3% for the year.”

AutoZone announces supplier awards AutoZone’s Annual Supplier Awards Dinner was held at The Grillhouse in Rosebank recently - the second year that the event has taken place. The awards dinner is exclusive to the Top 10 achievers, held in recognition of suppliers’ overall performance and contribution to the AutoZone business.

Suppliers are measured on criteria, based on a weighted matrix, such as Broad Based Black Economic Empowerment (BBBEE) rating; Electronic Data Interchange (EDI); units

PAGE 8

This partnership between First National Battery and Forest Farm has ensured that the patients’ lives are enhanced and FNB sees this as a way to give back to the community, providing batteries to the home, as and when they are required.

FNB reports that it is very happy to be able to provide these cerebral palsy sufferers a little more independence and the ability to move around. The battery operated wheelchairs make life a lot easier for patient and caregiver alike. The donations lift an immense amount of pressure off the caregivers and give the severely disabled patients the sense of freedom they so desperately seek.

Cerebral palsy is an umbrella term encompassing a group of non-progressive, non-contagious motor conditions that cause physical disability in human development, primarily in the various areas of body movement. It is caused by damage to the motor control centres of the developing brain and can occur during pregnancy, childbirth or after birth up to the age of about 3. The result is limited movement and posture, which causes activity limitation coupled with disturbances of sensation, depth perception and other sightbased perceptual problems and communication ability. In some cases, cerebral palsy patients also become epileptic and have trouble with cognition. Of the many types of cerebral palsy, none has a known cure.

sales growth; availability; overall relationships and additional predetermined metrics.

Sabat Batteries, supplied by Powertech, were the first overall winners for the 2011/2012 period, while GUD Filters came second and NGK Spark Plugs came in third. Meanwhile, winner for the Most Improved Supplier of the Year was Robert Bosch and Best Housebrands Supplier was Spirex Batteries, supplied by Powertech.

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AutoForum - November 2012

The latest global news

APDP review – focus on its impact on component sector - Roy Cokayne

The Automotive Production and Development Programme (APDP), which will only be fully implemented from January, will be undergo a review process within a year.

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ob Davies, the Minister of Trade and Industry, said the “early review” was prompted by the fact they knew some automotive components were experiencing difficulties in the transition from the MIDP to the APDP. This was because these components might not get the level of incentives they got under the MIDP because of the way the architecture of the APDP worked, said Davies in a pre-recorded address televised at an automotive industry conference at the SA Automotive Week in Port Elizabeth, in October.

There is a new architecture for this programme and the need for the early review is to make sure the programme continues to support the industry and there are no hidden snags in the implementation of the new programme, he said.

Roger Pitot, Executive Director of Naacam, told the same conference that some aspects of the APDP did not make sense. Pitot stressed the need for the motor industry to work with the Trade and Industry Department to “tweak” the APDP to better reward higher

PAGE 10

localisation, while still retaining some protection for the industry.

David Powels, Naamsa President and MD of Volkswagen SA, said the APDP provided a good foundation, but on its own would not make it possible for the automotive industry to achieve the target of producing 1.2 million vehicles by 2020.

Davies said most of the jobs and opportunities in the automotive industry would be from component manufacturing. He added that the component manufacturing sector would create three times as many jobs, with half the level of investment, as had been created by the investments made by original equipment manufacturers in the past few years.

Davies said the Automotive Incentive Allowance (AIS), one of the four key components of the APDP and which was fast-tracked and implemented in 2009, had resulted in a number of investments by manufacturers that had deepened the presence of manufacturing in the economy or had taken manufacturing in a different direction.

Roy Cokayne is a senior financial reporter for Business Report.

Some of these investments had led to a deepening of the localisation of components, he said.

Pitot said the APDP was a threat to increasing local content in domestically produced vehicles because it retained the duty offset system of the MIDP, which meant the only way for OEMs to use benefits obtained from the APDP was “to import more”. The more an OEM added value locally, the more they must export, the more they have to import to benefit, he said.

“There is something wrong with the logic of the programme,” he said. Pitot added that SA was the only country that had a rebatable duty system.

He continued that local content was low in domestically produced vehicles for a number of reasons, including the ability of OEMs to offset their duties through exports. This meant there was little or no protection for component manufacturers.

Pitot said most OEMs did not pay any import duty on components. OEMs had in the past three years imported R87 billion of completely knocked down components while R21 billion of sub components were imported by suppliers to OEMs, he said. Pitot said R446 million in duty was paid on this R108 billion, which represented an average duty of 0.41% instead of the specified nominal 20% duty, which represented a saving of R21 billion in duty.

He said the fact most OEMs paid zero duty meant there was no incentive for them to buy locally, unless these components were cheaper than imported components.

Pitot added that average local content in domestically produced vehicles was about 35%, which was too low.

Other reasons for the low content were that the success of a few high value component exports had partially substituted for localisation and if OEMs exported components, they did not have to localise to obtain offset benefits.

The Rand was overvalued, which reduced the prices of imported components and made local components less competitive and also reduced the target prices OEMs gave component manufacturers, he said. However, Pitot also acknowledged that the APDP also created opportunities for component manufacturers.

He said the production incentive rewarded local value addition, while the possibility of higher vehicle production volumes would make a huge difference in assisting local component manufacturers to compete globally.

Davies said medium and heavy commercial vehicles would be integrated into the APDP. He continued that his department believed public transport vehicles was a major opportunity for the automotive industry. It had introduced public procurement designations for buses as part of this process and a production incentive based on value addition had also been developed, he said.

AutoForum - November 2012

NEWS FORUM

SA on the brink of breakthrough to keep billions in manufacturing sector

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key concern at this year’s AfriMold Trade Fair, which took place last month, was maintaining the $1.5 billion income from exports in the South African tooling industry and the jobs and revenue that it generates. At present, South Africa’s automotive exports represent 11.8% of the country’s total exports, while automotive imports account for 16.7% of total imports.

every one job created for a toolmaker, 28 jobs are created downstream. Evidently a massive opportunity is being missed here and while the industry has the will, what is needed is the wherewithal to push it to the next level and that’s where AfriMold is poised to play an important role at this critical juncture.

The theme for AfriMold this year was Enabling for Tomorrow. This theme is representative of the industry’s pressing desire and need to revitalise the industry for sustainable growth and development, and to implement effective methods to improve production standards and international competitiveness.

It’s worth considering that for every one job created for a toolmaker, 28 jobs are created downstream

“South Africa’s entire manufacturing industry depends on a strong underlying tool, die and mould manufacturing (TDM) industry.

Yet this industry is declining locally, while growing rapidly elsewhere in the world. If we take the example of the car manufacturing sector, it’s evident that the demand exists and the opportunities run deep for the local TDM industry,” says AfriMold MD and Organiser and Toolmaking Association of South Africa (TASA) Chairperson, Ron MacLarty.

He adds that, given the huge volumes of tooling that the automotive industry is shipping overseas, it’s worth considering that for

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“South Africa’s automotive industry is widely regarded as a strategic South African asset.

Without doubt it is one of the manufacturing sectors that holds the most immediate potential for the revitalisation and growth of the local TDM industry. Worldwide, the car-manufacturing industry employs around 9 million people directly in producing vehicles and the

Centurion-based 3D printing technology specialists CAD House demonstrate their equipment at Afrimold 2012

components that go into them and it is estimated that each direct automotive job support a minimum of another five direct jobs,” says MacLarty.

Locally, as is the case elsewhere in the world, the automotive industry is strongly influenced by the strategies of Original Equipment Manufacturers (OEMs) in both domestic and global markets, the increasing focus of which is upon exports. South Africa’s Motor Industry Development Programme (MIDP) therefore encourages local OEMs to specialise in one or two high volume models on behalf of parent companies, thus obtaining economies of scale benefits via exports and assisting component suppliers to achieve and benefit from the same higher volumes.

Dr Norman Lamprecht, Executive Manager of Naamsa, comments: “South Africa’s participation in the World Trade Organisation, its competitive advantages and special relationships with various trading regions have facilitated the industry’s integration in the global sourcing strategies of the multinational automotive corporations. Key decisions about South Africa’s automotive business are made in Europe, the USA and Japan.”

“To secure and grow its role in this highly competitive global sector, the challenge for South Africa, from a manufacturing perspective, is to continue to provide a range of products that meets the expectations of a rapidly changing world where operating efficiency, driven by a massive increase in the price of energy and concern for the environment, is

impacting to accelerate the adoption of new automotive technologies.”

MacLarty concurs and believes that the country’s TDM sector has much to offer the automotive industry in meeting this and other challenges. He adds: “Competitiveness is key and South Africa’s improved ranking in the World Economic Forum’s latest Global Competitiveness Index, where it climbed four places to rank 50th out of 142 countries surveyed, will further enhance our competitiveness in attracting foreign direct investment, including from those countries that want to use South Africa as a base for their African operations.”

“In effect, the way is paved for South African companies in the TDM industry to pursue joint ventures with foreign partners, in order to help build the local sector, bring it in line with global standards of production and technology and thus enable it to vigorously pursue a role in the local and global automotive and other manufacturing sectors.”

MacLarty concludes: “All things considered, the opportunities abound for the local TDM industry to take on a significant role in South Africa’s automotive manufacturing industry, thereby keeping billions of Rands in the manufacturing sector. Moreover, it has the inherent potential to serve as a catalyst for growth in the overall manufacturing sector and thus play an important role in the country’s economic growth and development.

AfriMold aims to unlock this potential and drive the industry toward a locally and globally competitive future.”

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NEWS FORUM

AutoForum - November 2012

SA fuel quality catching up with international standards With increased volumes of European cars coming into the country, as well as environmental consideration and international pressure for cleaner fuel, the fuel quality in South Africa needs to be improved. That’s according to Commercial Fuels Business Unit Manager for Engen Petroleum, John Kennedy.

C

urrently, South Africa produces fuels with 500 parts per million (ppm), while many international countries are producing fuels with only 50ppm. However, Kennedy believes that this will increase substantially over the coming years, as petroleum companies establish and refurbish stations to allow for the production of 50ppm fuels.

Engen is currently underway with feasibility studies to establish new fuel plants and refurbish older plants to produce low-sulphur fuels. The company reports that government negotiations are also underway.

Meanwhile, Kennedy reported that the strike action, which took place last month, was a difficult period for the company, but noted that Engen has its own personal fleet of 250 trucks, which helped to deliver fuel to stations. He requested that operators be patient because although the trucks were escorted by armed security, due to intimidation by strikers, the company would not put its drivers at risk.

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New fuels In line with the environmental drive, and the need to get more bang for your buck due to high fuel prices, Engen launched two new fuels last month Diesel Dynamic and Primax Unleaded petrol - which should be fully implemented across the country by end November, as the old additives are worked out of the system.

The former has ‘a multifunctional detergent additive package’ that Fuels Technology Manager, Pierre Malherbe says ‘delivers excellent clean up and keep clean benefits through out the fuel distribution system’. He adds that it contains a unique combination of deposit control additive chemistries, which counteract injector fouling in diesel engines, restoring lost power as the fuel is introduced into the engine. This, in turn, is described as improving fuel economy and reducing exhaust emissions.

Malherbe says that cleaning properties of the diesel will have a dramatic effect on engines that have already suffered

diminished performance, and all within two to three tanks of fuel. The new fuel is also said to substantially reduce foaming and protect against corrosion.

The additive package benefits, Engen says, extend to the newest diesel technology engines, and will benefit older engines equally.

Primax Unleaded is available in both 93 and 95 octane. It likewise comes with a ‘multifunctional detergent additive package with excellent clean-up benefits’, explains Malherbe. The additive pack also contains enhancements ‘for added power and economy’.

It is also explained as containing a ‘friction modifier’, which, says Malherbe, reduces friction in the engine and improves lubrication to ensure energy efficiency and better fuel economy. An organic combustion improver causes a more complete combustion of the fuel. Malherbe contests that this results in more energy being released and increases the effectiveness of the engine, resulting in improved performance as well as fuel economy.

AutoForum - November 2012

NEWS FORUM

Shockingly advanced

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iven the constant development in vehicle technology, it may not come as a surprise that shocks have evolved as well. Monroe Marketing Manager of Aftermarket Ride Control Southern Africa, Philip Lutz, tells AutoForum that shocks are becoming more advanced with computerised adjustments and wireless remote technology.

One such product includes the Rancho MyRide remote wireless adjustment kit, which allows users to adjust their ride from firm to soft and anywhere in between, making ride control simple and precise.

The Wireless Controller includes a variety of one-touch presets, including Highway, Sport, Work/Tow/Haul, Off-Road, and a driver-determined MyRide, which allows the owner to set his or her own preferred ride setting and save it for future use.

Rancho is holding a competition, during the month of November, for the first 50 people who purchase and fit four Rancho shocks, to stand a chance to win a Rancho MyRide remote wireless adjustment kit worth over R4 200.

An invoice with the part numbers, individual’s name, physical delivery address and phone number needs to be emailed to promotions@tenneco.com. The Rancho MyRide remote wireless adjustment kit excludes fitment, this needs to be arranged and financed by the customer.

No cash or alternative gifts will be substituted for the MyRide kit.

Lutz notes that this kind of technology is expensive, however, as demand and volume increase, the costs should decrease. He believes that advanced shock technology that electronically adjusts itself as you drive will soon be found in even medium cost vehicles. “Although the technological advancements in vehicles make a mechanic’s life more difficult, the Rancho MyRide remote wireless adjustment kit is easy to install and does not create any problems for the user,” says Lutz.

He believes that this technology is gradually gaining popularity in South Africa and points out that there are very few products that can match the Rancho MyRide remote wireless adjustment kit.

PAGE 16

The new Ford Focus ST

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he All-New Ford Focus ST will go on sale in South Africa this November. “The new Focus ST will be available in 40 countries around the world as Ford’s first global performance car. As such it has been highly anticipated and we are extremely excited to introduce it here in South Africa and allow Ford fans the opportunity to experience the true essence of what the ST badge represents,” says Ford Marketing Manager, Gavin Golightly.

“Ford’s performance strategy is based on the fact that performance fans globally want the same thing. As a result designers focused on combining a rewarding driving experience with the ability to enjoy the car on a day-to-day basis,” added Golightly.

Ford’s Global Performance Vehicles group established the DNA of the ST as a key part of its global performance car strategy following close collaboration between Ford Team RS in Europe, and the Special Vehicles Team (SVT) in the United States. Ford engineers from the Asia-Pacific region also provided input to ensure all new ST models would please drivers in key Focus markets.

Equipped with a 184 kW 2.0-litre turbocharged EcoBoost engine, the new Focus ST races from 0-100 km/h in 6.5 seconds and has a top speed of 248 km/h. Enhanced dynamics and a comprehensive range of driver assistance features complement the cars uncompromising performance.

The frugal EcoBoost engine also means Focus ST is expected to return 7.2 ℓ/100 km and deliver CO2 emissions

of 169 g/km; a 20% improvement over the previous Focus ST. The Focus ST’s six-speed manual transmission produces maximum punch from each gear shift throw using specially-revised gearing. The sixth gear helps drivers achieve excellent fuel economy on longer runs.

PAGE 17

NEWS FORUM

AutoForum - November 2012

e-Tolls wrong for SA – OUTA The Opposition to Urban Tolling Alliance (OUTA) released a statement to the media recently that it sees the move to toll the Gauteng freeway upgrade as a poor decision taken by the authorities.

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his comment came following the organisation’s review of the ETC contract. “Our expert transport economist’s assessment of the numbers and efficiency of e-Tolls has revealed that the plan suffers from oversights and is a most inefficient manner in which to fund the R17 billion freeway upgrade,” says OUTA Chairperson, Wayne Duvenage.

OUTA firmly opposes the application of e-Tolling under the veil of the ‘user pays’ principal. “Given the structure of our economy and the need to support those who lack many of the basic services, it is important that we apply the most cost efficient and effective funding methods,” says Duvenage.

According to Clif Johnston of the SA National Consumer Union, the cost of collection and the bureaucratic burden it will place on society, are independent of the actual amount charged per km. Indeed, as the toll rate per km falls, the collection costs become an increasingly larger percentage of the amount collected.

This, says Johnston, is the ultimate tragedy of the plan. “Being that the road user will still have to foot the bill of more than R1.1 billion per annum to cover the electronic toll collection process, regardless of how much they reduce the toll rate and cross subsidise the revenue required with fuel levies or the national fiscus mechanisms.”

Automotive Association Head of Public Affairs, Gary Ronald reports that there are concerns about why the contracts still remain confidential. The public, who are ultimately expected to pay the fees, should be given full view of the entire contract. “Until now, all we have seen are a few tables from the authorities,

PAGE 18

which vary substantially in the costs and projected revenues, casting serious doubt regarding the authenticity and accuracy of these figures,” he adds.

Duvenage says that the e-Toll plans have failed under expert examination and emphasises that, as per Government’s own documents, transfers from the fiscus and receipts from a fuel levy remain the most cost efficient way of raising funds.

Further, these methods are included in government policy for revenue generation toward road infrastructure development. Adding to the injustice is a lack of

the (planned) upgrading of public transport in Gauteng, which will eventually offer both road users and the general public a reliable, safe and efficient alternative to owning a private vehicle.

South African Tourism Services Association CEO, Michael Tatalias believes that forcing e-Tolling onto the citizens of SA is a gross injustice and implies that citizens’ intellect is being taken for granted by the authorities. He believes it implies that the public is unable to detect when a planned revenue or tax collection system is a waste of their hard earned money and time.

Meanwhile, COSATU’s warnings to government were expected and reflects a strong disquiet within both Gauteng and nationally at the prospect of a national e-Tolling roll out. OUTA believes Government should not err by discounting

the extent of dissatisfaction with the GFIP e-Tolling plan.

QuadPara Association of South Africa CEI, Ari Seiris points out that the organisation is concerned for his members who were not consulted during the planning of e-Tolling and are largely unable to use alternative public transport, due to its lack of accessibility, convenience and reliability. While a solution is currently being sought for people with disabilities, the last proposed tariff structure and policy makes no accommodation for those without transport but who rely on the generosity of many private individuals to transport

them around Gauteng, often using the network of highways.

OUTA reaffirms that its members are willing to pay for the GFIP and other national transport infrastructure projects that benefit the country as they are both needed and long overdue, but not through e-Tolling. The organisation remains confident that the November judicial review of the decision to implement e-Tolling will be a strong challenge against ‘the unjust plan’.

Despite all this negative sentiment, concerns and dissatisfaction, the Minister of Transport continues to encourage the public to purchase e-Tags. Duvenage concludes that the reality is that you can’t be ‘half pregnant’ on e-Tolls.

You either e-toll or you don’t. A lesser amount of the wrong method doesn’t make it any more right.

NEWS FORUM

AutoForum - November 2012

Automotive incubator to support small businesses - Roy Cokayne

An automotive incubator has been established in Ga-Rankuwa north west of Pretoria, with the aim of supporting and improving the survival rate of small, medium and micro enterprises and facilitating job creation.

T

he project is a joint venture between the City of Tshwane, the Small Enterprise Development Agency (Seda), the Seda Automotive Technology Centre (Satec) and North West Development Corporation.

Leonard Tshabalala, a Satec Project Manager, said eight entrepreneurs who each employed two people were currently benefitting physically from the creation of the incubator, while a further 33 entrepreneurs in Tshwane would be “virtually incubated”.

Ranjit Alummoottil, Seda’s Executive Manager for the technology programme, said the launch of this incubator would go a long way to assist small enterprises in the automotive sector to grow and become sustainable, employment- creating enterprises.

“The economic recession that took place during 2008/2009 has forced businesses in the automotive sector to re-evaluate their strategies and tighten their belts. Many of the automotive operators had to retrench workers to ensure their profit margins remain attractive to their shareholders.”

“With the Ga-Rankuwa automotive hub, small enterprises in and around Ga-Rankuwa that have been operating informally are going to be formalised and placed in the secure environment of an incubator where they learn, find their feet and flourish.”

Alummoottil said 295 enterprises, which collectively created 1 517 jobs, were created by the Seda incubation programme in the past financial year.

Tembeka Mhlekwa, the City of Tshwane’s Strategic Executive Director of the Economic Development Department, said an investment of R4.5 million

PAGE 20

in the incubator over three years had been approved by the city.

Mhlekwa added that R1.4 million had been invested this year in equipment for the incubator and to revamp the facility.

She said their intention in establishing incubators was to increase the survival rate of SMMEs and create employment, adding business incubation was fast becoming world’s foremost job creators.

Mhlekwa said the City of Tshwane had aspirations to build at least 10 business incubation centres in the next three years.

The objectives of the Ga-Rankuwa automotive incubator include assisting existing and potential automotive related businesses involved in operations that include auto panel beating, body repairs, auto mechanical and electrical work to improve their business operations and provide the relevant equipment, mentoring and coaching to SMMEs in the automotive industry.

Executive Major for the City of Tshwane, Kgosientso Ramokgopa, said the automotive sector was one of the things that defined the DNA of the city and set it apart from the rest. He said the city was the automotive hub of the country, contributing more than 40% of the total vehicle exports from the country, while the current Rand value of the industry in the city was more than R30 billion.

He added the city’s investment in the incubator fell within the interventions it was making around the automotive sector, to ensure its contribution to the gross value add in the city increased over time, by attracting further major vehicle brands to it.

AutoForum - November 2012

NEWS FORUM

Huge potential exists in the KZN TDM industry

C

urrently, the local demand for tooling tops R10 billion, but only local manufacturers supply a mere 20% of this. The remainder is sourced from China and Europe. KwaZulu-Natal Tooling Initiative (KZNTI) Regional Programme Manager Umash Ramakalawon says the main reason for this sourcing decision is not based on quality, but price and lead times. However, he is optimistic that these problems can be countered and that sufficient demand can be created to provide the volumes needed to initiate investment.

Ramakalawon points out that in KZN particularly, there is a huge opportunity to grow the tool, die and mould-making (TDM) sector, creating a strategic hub of excellence that not only services the automotive sector, but the general manufacturing and ICT sectors as well.

His comments come after Design South Africa, a Durban-based engineering company, were awarded an approximate R60 million full turnkey project for the body shop assembly line for the production of the B299 Ford Fiesta sedan and B515 hatch for Ford Venezuela.

Ramakalawon says the project is not only a testament to what local companies can achieve in the international area but also acts as a motivation for other companies to grow.

He believes that Design South Africa has exemplified what can be achieved.

He says the quality of the company’s order book together with an ongoing drive to grow its business both locally and internationally placed it at the forefront of the industry both in KwaZulu-Natal and nationally.

The company places a great deal of emphasis on upskilling staff. “I believe the backbone of any economy is training both technical and hands-on staff. Apparently, for every direct job in the automotive industry seven jobs are created downstream,” says Design South Africa Operations Director, Dave Brookes.

The company is now outsourcing certain elements of its projects and has established a network of regular sub-contractors, providing much needed guidance and assistance for emerging Small, Medium and Macro Enterprises (SMMEs) in the province. “We like to think of our staff – from workers on the shop floor to our administrative department – as a large, albeit very hard-working, family.

This attitude ensures that we deliver the highest possible quality product to our customers and continue our growth and investment at our head office in KwaZulu-Natal as well as facilities in Johannesburg and the Eastern Cape,” adds Managing Director, John Mulgrew.

PAGE 22

PAGE 23

AutoForum - November 2012

NEWS FORUM

CI Automotive's new initiatives strategy

C

ontrol Instruments (CI) Automotive has confirmed that it aims to implement a number of initiatives to strengthen its strategic relationships with the company’s primary customers and warel Contro house distributors. The group is ents Instrumotive also focusing on operational efm Auto Sean ficiencies, securing new brands CEO, gers Ro and expanding the business into sub-Saharan Africa.

The company believes that while the automotive aftermarket remains highly competitive, the prevailing market conditions appear to be supportive of the business’s strategic initiatives that are focused on realising the growth opportunities materialising in the South African and sub-Saharan Africa automotive markets.

As part of its strategy to secure new brands, CI Automotive has concluded a strategic partnership with manufacturer of brake friction products, TMD, to market and distribute the TEXTAR brand in sub-Saharan Africa.

It has also introduced a range of lighting products under a newly secured North American brand, Vision X. Both TMD and Vision X are seen as complimenting the company’s existing basket of branded products and drawing it closer to its vision of being the leading supplier of choice for branded automotive parts in sub-Saharan Africa. In line with this, it also confirms that it will continue to look for brands and companies with a recognised pedigree in the automotive aftermarket.

CEO, Sean Rogers said the continued investment in product development aims to meet the demands of an increasingly diverse vehicle parc in South Africa. This is seen as an essential aspect to grow CI Automotive’s flagship brand, Gabriel. In the company’s interim results for the six months ended 30 June 2012, new product development contributed approximately 4% towards the growth in sales of the Gabriel brand.

“Improving the operating margin of the business remains a key focus area. Core to

PAGE 24

achieving this is a disciplined approach to reducing the ‘cost to serve’ through operational efficiencies,” said Rogers.

He adds that the manufacturing operations are engaged in a number of projects that are aimed at reducing material and input costs over the next twenty-four months. Rigorous cost management, effective selling strategies, focused service delivery and the expansion into sub-Saharan Africa remain core to all management activities, Rogers explained.

He said the continued focus on marketing and distribution in the Aftermarket business had contributed to a satisfactory performance.

CI Automotive reported in its interim results for the six months ended 30 June 2012, that it has increased operating profit by 25% to R13.29 million and earnings per share from 1.41 cents to 4.93 cents for the six months to June 2012.

Revenue has increased 7% to R269.96 million and profit after tax rose from R1.94 million to R6.79 million.

Rogers said management’s focus during the first half of 2012 centred on the execution of the decision to exit the original equipment manufacturing (OEM) business, downsizing the head office and transitioning the group to a focused aftermarket business.

“The results from continuing operations, for the period under review, are a satisfactory reflection of the progress that is being made in these areas,” he said.

Gross profit increased 10.44% to R82.65 million compared with R74.84 million. The increase in net expenses, which included further investment in marketing, was contained at 7.93%. Headline earnings per share from continuing operations increased from two cents (restated) to 6.58 cents.

Rogers said the exit from OEM business, Pi Shurlok, will enable the group to focus on the aftermarket business and dedicate the necessary resources and management time to building on its solid profitable performance.

PAGE 25

NEWS FORUM

AutoForum - November 2012

Top 100 Best Global Brands of 2012 Interbrand released its annual Top 100 Best Global Brands of 2012 last month and, of all the vehicle brands, Toyota ranked best at tenth position, increasing 9% to $30.280 million.

T

he report states that the Toyota brand’s resilience seems to have closed the chapter on sudden acceleration and helped the carmaker reclaim its global leadership position.

Toyota’s Prius customers continue to deepen their connection to the Toyota portfolio. At the same time, the Prius lineup is creating an influx of new customers to the Toyota brand. And, thanks to the generous subsidies and reduced taxes on cleaner cars, hybrids are becoming a clear differentiator for Toyota, allowing the Prius portfolio to continue to grow. In addition to showing solid numbers with repeat customers, Toyota is also strengthening its appeal with younger consumers.

The brand has intensified its incentives push and reduced its fleet sales, which the report says, helps customers

PAGE 26

find a good deal while also holding the line on the resale value of their vehicle.

Although relying on incentives will undermine the brand, overall spending remains among the lowest in the industry.

Europe continues to be a challenge for the nameplate but, overall, management will be focused on evolving its messaging and communications while reinventing a maturing brand with more stylish and better-looking vehicles.

Mercedes-Benz came in at number 11, increasing 10% to $30.097 million. Its long heritage of excellence in engineering, performance, styling, and safety was dramatically underscored in 2010 by the resurrection of founder Gottlieb Daimler’s guiding motto: “The best or nothing”. A pioneering brand that has been shaping the future of mobility for more than 125 years, MercedesBenz continues to respond to a market

that is quickly shifting in favour of green technologies.

Setting new efficiency benchmarks, Mercedes-Benz also boasts the most economical luxury class model in the world: the E 300 BlueTEC HYBRID. The company’s commitment to innovation is also evident in the development of forward-looking technologies like its F125 concept car, essentially a blueprint for the future of luxurious, emissionfree vehicles. Further, it is increasingly leveraging its AMG brand to add driving-performance credentials to the masterbrand. Constantly defining new milestones in terms of vehicle drive systems, safety, comfort, design, and sleek aesthetics, Mercedes-Benz continues to live up to its promises of fascination, perfection, and responsibility.

2012 Summer Olympics, BMW provided over 3 000 vehicles to the games, successfully demonstrating its mastery of global brand management and further unifying its positioning worldwide.

BMW follows up from behind at 12th position, increasing 18% to $29.052 million. Synonymous with class, performance and style, BMW remains a leading premium brand in the automobile industry and continues to appeal to a wide host of target groups around the world with over 11 million Facebook fans, more than most other auto brands.

The key success factors are BMW’s handling characteristics, design, and innovative thrust of the brand. As the official automotive partner of the London

The automaker is determined to set new benchmarks in the dealership experience, opening brand stores in London and Paris this year as part of BMW’s ‘Future Retail’ programme. The stores represent the first step toward a new generation of brand experiences. Never short on innovation, BMW is also poised to introduce, the i Series, which promises to bring new excitement and attention to the electric vehicle market. Despite this stellar performance, BMW, the best selling luxury car in the US in 2011, is

locked in a battle with Mercedez-Benz for the same honour in 2012. The muchanticipated addition of all-wheel drive to the redesigned 3 Series may prove to be the extra gear that BMW needs to take the lead.

Other vehicle brands to feature in the Top 100 Best Global Brands included Honda at 21st position, increasing 11% to $17.280 million, Volkswagen featured at 39th position, increasing 18% to $9.252 million.

Ford took 45th place with an increase of 6% to $7.958 million, Hyundai came in at number 53 with an increase of 24% to $7.473 million, Audi took the spot of 55 with a 17% increase to $7.196 million. Further, Porsche came in at 72nd position with a 12% increase to $5.149 million, while Nissan followed close behind to take 73rd position with a 30% increase to $4.969 million. New entrant into the report, Kia came in at 87th position with $4.089 million and Ferrari just skidded into 99th position with an increase of 5% to $3.770 million.

PAGE 27

NEWS FORUM

AutoForum - November 2012

Motor Manufacturing Sector could apply for competition act exemption - Roy Cokayne

The motor manufacturing industry is considering applying for exemption from the Competition Act for its joint automotive components purchasing initiative.

T

he primary focus and objective of the council over the past few years has been to try and get original equipment manufacturers (OEMs) to work together to grow local content in domestically produced vehicles, while also facilitating technology transfers as an enabler of new local content.

More recently, the council has started looking at cooperation on supplier development and supplier competitiveness improvement initiatives.

Johan van Zyl, President and CE of Toyota South Africa Motors (TSAM), said the Department of Trade and Industry had been “very accommodating” and indicated the industry could apply for exemption from the Competition Act, to ensure it did not end up with any competition issues from the joint purchasing initiative.

Van Zyl said the industry was now looking into what it was required to

PAGE 28

do to achieve exemption from the Competition Act. Speaking after the official opening of TSAM’s new R363 million parts distribution warehouse in Ekurhuleni, Van Zyl said there was insufficient support for automotive component manufacturers in the APDP. The latter replaces the current MIDP from next year.

Van Zyl said if the industry was serious about deepening local content levels in vehicles, it would have to look at the enhancement of the programme for component manufacturers in the review processes of the APDP “Job creation is really stimulated by component manufacturing. To further that, we will have to look at further support for the local component industry.

They [component manufacturers] have huge disadvantages if you compare them to the global component suppliers in terms of logistics costs and volume.”

He stressed that joint purchasing was difficult because motor manufacturers

could not share components and could only look at sharing technology.

However, Van Zyl believed the initiative had already achieved some successes.

He cited as an example of this success the increase in local content in some areas, such as wiring harnesses, where motor manufacturers were sharing the same manufacturer. “That has really helped. Of course there are also some other areas that we are now looking at.

But the opportunity you have [to localise] is when you bring in new models.”

The purchasing council was originally an informal grouping comprising the purchasing heads of the so-called German OEMs in SA. In about 2009, however, it was agreed it made sense for all seven locally based OEMs to participate. The OEM Purchasing Council has now become a sub committee of Naamsa.

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NEWS FORUM

AutoForum - November 2012

No matter what you drive, it is expensive – Kinsey Report The 2012 Kinsey Report released by the Automotive Association of South Africa states that no matter what you drive, it will be expensive - and the source country of a vehicle can have a large impact on pricing.

P

roducers from countries such as India, Thailand and China, where labour is poorly paid, are able to export vehicles and parts at a lower cost than Europe, Japan or Korea. However, there is still a need to shop around, as there is legislation prohibiting price setting.

This means that any dealer may discount or add to a price as they see fit, states the report.

The Kinsey report provides a comparative guide to parts prices across the entire spectrum of motor vehicles looking at city cars, entry level vehicles, supermini, family favorites, executive category, compact crossover, crossover and double cab segment.

In the category of city cars, the Nissan Micra has, for the second year running, won the title of lowest basket in this category, at R32 094. However, the least expensive service part belongs to the Tata Indica and the lowest repair parts basket goes to the Chevrolet Spark. Meanwhile, the Micra crash parts are more than R2 500 cheaper than the car in second place in this category and overall - the Suzuki Alto - while the Hyundai i10 is third.

In the entry-level category, the Ford Figo takes first place with a total parts basket of R34 384, over the Polo Vivo and Renault Sandero. The Sandero did, however, score well on service parts, but just not enough to beat the Figo in both the repair and crash parts section.

The Toyota Etios came second for repair parts and finished fourth overall.

In the supermini segment the Ford Fiesta ranks highest with a total basket price of R46 086. This is hotly contested, with less than R4 500 separating the first five makes.

Meanwhile, the VW Polo at R2 186 claims the least expensive service parts, while repair parts see the Chevrolet

PAGE 30

Sonic taking a bow, with the Polo close behind. Crash parts winner is the Fiesta, with the Hyundai i20 and Citroën DS3 close behind.

In the family favourites category, the Nissan Tiida takes the cake, again, with a parts basket of R44 823. The car with the least expensive service parts is the Hyundai Elantra, followed by the Peugeot 308. Repair parts winner for this segment is the Chevrolet Cruze and the Tiida coming in second, but also being the best performer in crash parts.

The overall family favourites include the Toyota Corolla, followed by the Elantra and Ford Focus.

a basket of R53 488. The service parts are also best from the Avanza, while the Suzuki SX4 is the most economical in repair parts and crash parts follow the overall placing of Avanza, Livina and the SX4.

Toyota has also taken over the crossover segment with its Fortuner, with a parts basket of R81 958, followed by the Peugeot 3008, lagging by just R9. In third place is the Subaru Forester. Service parts basket is the lowest for the Hyundai iX35, with the 3008 in second.

The repair cost winner is the Fortuner, and the crash parts lowest total goes to the Hyundai iX35.

Within the auto executive category, the Hyundai Sonata takes the crown at R83 303, followed by the Mazda 6, Audi A4 and Volvo S60. The best in terms of the parts basket as a percentage of the purchase price is the S60, with the service winner being the Sonata, the Volvo S60 following close behind that and the Kia Optima in third position. In the crash parts section, the Sonata is ahead of the Mazda 6 and the Audi A4.

Meanwhile, in the double cab segment, India takes the lead with the Tata Xenon at a parts basket total of R42 124. The GWM Steed 5 and the Ford Ranger follow this. Servicing prices are neck-on-neck between Tata and GWM, with the Mazda BT50 coming in third. Repair items reveal a similar pattern – Tata, GWM and Ford, with crash parts panning out with Tata from GWM and Mazda.

The Toyota Avanza heads the compact crossover segment, over the Nissan Grand Livina and the Suzuki SX4, with

It is apparent that the country of origin has an impact on the cost of parts, not only the vehicle.

Body repair insight NEWS AFRICA

Contents 32

PAINTING OR CLADDING YOUR CAR? IS CLADDING AN OPTION?

32

Increased support for bodyshops

In association with BodyShop News Asia and Australian BodyShop News

PAGE 31

BODYSHOP NEWS

AutoForum - November 2012

PAINTING OR CLADDING YOUR CAR? IS CLADDING AN OPTION? - Robert Kaiser

Just when you think you’ve seen it all, another innovation hits the market…

A

t the September Automechanika show, a company that specialises in changing the colour of a vehicle by using cladding technology was demonstrating just how effective this colour change method can be. To change the colour of a vehicle, the surface is thoroughly cleaned (no sanding or other operation required) and the vehicle is then clad with the colour of your choice. The cladding is a non-gloss material that, according to the exhibitor, is impervious to sunlight effect and will not fade, is tough enough to withstand road rash effect and is permanent, but you could decide to change the colour by merely replacing the cladding. According to the exhibitor, many people who buy ex taxi vehicles (in Germany they are all one colour) for private use opt for this cladding process to change the colour of the vehicle and hide its taxi origins. Not that anyone in SA would care to buy a used minibus taxi, but an interesting concept for those who have a desire to change their car colour without having it repainted. You could even go psychedelic and have different panels in different colours…

Increased support for bodyshops

T

he BASF Coatings Glasurit brand has created a customer network in Germany, to expand its range of services for bodyshops. The new network is called ColorMotion and offers support to bodyshops in the spray-painting sector with a number of services such a ready stream of customers, staff management as well as business administration.

Bosch Car Service network are specialists for all car-related questions. Collaboration allows both the Bosch Car Service bodyshops and the ColorMotion bodyshops to offer their fleet customers a wider range of one-stop repair services. This is also true for Douteil, the hail damage specialist recommended by many big insurance companies that have also partnered with network.

In order to make it easier for bodyshops in that country to acquire new orders, ColorMotion promotes cooperation with partner companies such as the Hüsges Group. The latter focuses on preparing damage, value appraisals, and support and damage management for leasing fleets. Cooperation with a well-known vehicle appraisal group makes it easier for bodyshops to gain access to leasing networks, where they can ifurther ncrease their customer base.

At the same time, the ColorMotion bodyshops are able to offer a special service due to its partnership with the Dataforce market research institute. As experts in the fleet market, and as one of the leading suppliers of automotive market research in Germany, Dataforce supports the bodyshops with targeted acquisition of new customers with addresses of vehicle fleets close to them.

Bosch Car Service is also a ColorMotion partner. The bodyshops of the

PAGE 32

for making calculations, ordering spare parts and performing other logistics tasks.

This year, AuDaCon started providing these programmes for ColorMotion bodyshops, which allows, for instance, a bodyshop to find the right directions for refinishing easily and quickly.

“We are happy that we have been able to open up so many attractive new opportunities for our ColorMotion members with these partnerships,” said Glasurit Fleet Manager Bernd Sessner. He adds that in so doing, the company continues to expand its status as a sought-after partner for the automotive sector.

At this stage the network is not available in SA.

Technical data specialist AuDaCon supports automotive repair shops in their everyday business jobs through online software systems, offering programmes

Robert Kaiser has been intimately involved in the motor industry for the past 25 years. He established Retail Motor Consultants in 2002, a consultancy providing relationship management, marketing and staff recruitment services as well as apprenticeship management programmes and through an associated company, unique Black Economic Empowerment transformation programmes for both large and SME businesses.

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Business Forum

AutoForum - November 2012

Business insight

Strikes, sales and the real economy barometer - Colin Windell

I

t absolutely amazes me how workers on an illegal strike fail to understand any gains they may achieve in salary are totally negated by the losses incurred during the strike and that union bosses fail to explain this, rather sitting safely in their offices munching on prawn sandwiches, dropping these only long enough to appear on camera with the whole ‘Viva Comrades Viva’ jargon.

More than that, the entire – fragile – economy on which their current salaries and any future increases are dependent is placed under the kind of pressure that makes increases of any nature impossible to sustain, even if the ‘bosses’ wanted to provide them.

Just how quickly the knock-on effect of industrial action is felt shows in the auto sales for September, when double-digit growth dropped to single figures.

The tragic events at Marikana, together with the current high level of industrial action in an increasing number of sectors in the economy, dented business confidence in South Africa. Consumers were affected and concerns about the macro socio-economic environment in the country resulted in a deferral of purchasing decisions.

September 2012 aggregate industry domestic sales improved by 740 units or 1.4% to 55 097 from 54 357 units in September last year. Total domestic sales for the nine months of calendar

PAGE 34

2012 remained 10.0% ahead of the corresponding nine months in 2011.

September 2012 export sales at 26 638 vehicles had registered marginal improvement of 703 units or 2.7%.

this facility in January 2011 we also announced the local assembly of our Ses’fikile taxi and future plans to significantly expand this initial R70-million investment.”

Overall, out of the total detailed (disaggregated) reported industry sales of 52 368 vehicles (excluding MBSA), 78.4% or 41 040 units represented dealer sales, 13.9% represented sales to the vehicle rental industry, 3.4% industry corporate fleet sales and 4.3% to government.

Glenn Stead, Head of Personal Markets for Vehicle and Asset Finance at Standard Bank says local drivers are still finding ways to buy ‘aspirational’ vehicles, encouraged by low interest rates and competitive special deals currently being offered by dealers.

However, even in the midst of Marikana, the transport workers’ strike and stoppages at Toyota’s Prospecton plant, the company reaffirmed its local and global ambitions as it officially opened its new Parts Distribution Warehouse in Ekurhuleni, Gauteng.

The R363-million centre was built and equipped in 15 months and was designed to serve the company’s Southern African Toyota, Lexus and Hino dealer network with daily deliveries. It will also support 70 international destinations where South African built Toyota vehicles are found.

“Today’s announcement signals the start of a new phase of investment and development for Toyota South Africa,” says Dr Johan van Zyl, President and CEO of Toyota SA Motors. “After announcing our intention to develop

Reviewing sales for September 2012 recorded by the National Association of Automobile Manufacturers of SA (Naamsa), Stead says the figures mirror approved applications for finance at Standard Bank. The data also shows many South Africans are still prepared to shell out their hard-earned money for passenger vehicles in the luxury brand category.

“There is still great demand being experienced for luxury passenger vehicles.

This category of vehicles attracted national sales of more than 6 250 vehicles, up by 2.2% from August 2012 (6 123). These vehicles cover manufacturers such as Audi, BMW, Jaguar, Lexus, Mercedes and Volvo. The middle and lower-end of the passenger vehicle market is also holding up well, comprising the bulk of total passenger vehicle sales.

Colin Windell is the Editor of Fleet Magazine.

“Sales seem to have been bolstered by a competitive market in which various manufacturers have been offering special deals on vehicles. These special offers range from good trade-ins of older vehicles, through to prime-linked purchase packages and the addition of after-market accessories to enable buyers to customise their vehicles.”

Aggregate industry new car sales during September, 2012 maintained modest upward momentum and at 39 496 units (including MBSA) reflected an improvement of 1 667 units or 4.4% compared to the 37 829 new cars sold during September 2011.

Year to date new car sales remained 11.5% ahead of the corresponding nine months of 2011, supported by strong demand on the part of fleet buyers and car rental companies with the car rental industry accounting for 18.6% of total sales.

However, the real barometer of business confidence, light commercial vehicles, bakkies and mini buses reflected a decline and at 13 279 units during September, 2012 showed a decrease of 725 units or 5.2% compared to the 14 004 light commercial vehicle sales during the corresponding month last year.

Sales of vehicles in the medium and heavy truck segments of the industry at an estimated 779 and 1 543 units, respectively, recorded a decrease of 73 units or 8.6%, in the case of medium commercial vehicles, and a decline of 129 units or 7.7%, in the case of heavy trucks and buses, compared to the corresponding month last year.

These are the worrying statistics and, as the industrial action continues into October, will likely damage sales even further.

“The market continues to be driven by government and rental sales,” says Dean Stoneley, Ford’s Vice President of Marketing, Sales and Service. “Only 74.5% of total SA vehicle sales were done through dealerships during September. FMCSA sustained our dealer channel sales share with 94% of our sales being done directly with motorists on our showroom floors.”

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“The effects of the truck drivers’ strike may have some impact on October sales due to pressurised supply of components and stock to manufacturers and importers,” says Stoneley. “But the market seems to be at sustainable levels at expected volumes going into the last quarter of 2012.”

“At first glance sales through the dealer channel appear to have slowed down, but compared to the previous year it has increased by more than 12.6% for passenger vehicles and 4.2% for all vehicles,” says Van Zyl.

www.ramauto.co.za • +27 11 248 9400 • sa.rammail@veyance.co.za

Continued on page 36

PAGE 35

AutoForum - November 2012 “As with last year we see rental companies moving their purchases as early as July, which means that their purchases in the latter part of the year are lower than normal. This is supplemented by government purchases, but this year also by private buyers.”

With dealer, rental and government sales explained, the decline in sales momentum appears to originate from the business sector. This, explains Dr van Zyl, is evident in a slowdown in commercial vehicle purchases and in a general decline in business confidence measurements.

Mike Glendinning, Director: Sales and Marketing, Volkswagen Group South Africa says: “Replacement demand remains a solid driving force as a foundation for new car demand and a steady stream of new model introductions with enhanced value offerings continue to entice consumers.”

2.

VW Polo

2 233

3.

Toyota Etios

1 736

4.

Toyota Corolla

1 383

5.

BMW 3-Series

1 226

6.

Ford Figo

1 179

7.

Chev Spark

1 011

8.

Toyota Fortuner

967

9.

VW Polo Vivo Sedan

799

10.

Chev Sonic

725

TOP PERFORMING: NEW LIGHT COMMERCIAL VEHICLES September 2012 Model

Volume

1. Toyota Hilux

2 813

2. Chev Utility

1 411

“On balance, the wealth effect is also supportive of new car demand with house prices moving sideways, but no longer declining, and the stock exchange trading at record high levels. In these circumstances the outlook for the new car market in 2012 remains for growth exceeding 10% over 2011.”

3. Nissan NP200

1 380

4. Ford Ranger

1 272

5. Toyota Quantum

1 161

6. Isuzu KB

1 158

7. Nissan NP300 Hardbody

960

TOP PERFORMING: NEW PASSENGER VEHICLES September 2012

8. VW Amarok

483

9. Mazda BT-50

257

10. Toyota Landcruiser PU

201

Model

Volume

1.

2 587

VW Polo Vivo

PAGE 36

Source: Naamsa

PAGE 37

AutoForum - November 2012

Do you know your business?

- Graham Bush

One of my favorite programmes currently on television is Undercover Boss, an Emmy award-winning television franchise series. The show’s format features the CEO of a company who goes undercover and investigates the inner workings of the business incognito, often uncovering some hard facts that the ‘bosses’ are unaware of. At the same time, and more often than not, some ‘hidden gems’ in staff are also discovered, and often rewarded!

O

ne of South Africa largest retailers recently announced the appointment of a new CEO. The incumbent’s retail expertise, I feel, is unquestionable, as he is a former Chief Executive of a R600 Billion retail business in UK. My question is, does he understand South African trading conditions, and the company he is joining – really? Can you imagine if, before actually donning his suit and tie (no doubt from Savile Row) and having his first of thousands of board meetings, he spends time ‘undercover’ in the stores; working with the bakers at some unheard of hour in the morning, going to the fresh produce markets, not so early in the morning, and working on the deli counter at a reasonable time of day? Then he could spend some time in the Distribution Centre, accompanying the drivers on store deliveries. Goods receiving is another ‘den of inequity’, followed by shelf packing and then the moment of truth – The Front Line! Now, far be it for me to tell this organisation how to run its company, however, after watching Undercover Boss, I feel the idea is sound as it will give this new CEO an in-depth, hands-on feeling of ‘The Business’.

PAGE 38

This process, of course, can also be used by a current MD or CEO. The trick is doing it without employees knowing who you are, and what you are actually doing. The objective must be clear; you want to take a good look at your business, products and customers. You may discover what new products or services you can offer to customers. You could also find out why customers choose, or don’t choose, your product or service rather than your competitors?

Most blue chip companies are listed on the Stock Exchange, and are always looking for more investors. When analysing companies, investors can easily get caught up in details such as performance figures, stock ratios and valuation tools while forgetting a more basic question: what makes the business tick? A solid business model remains the bedrock of every successful company. To distinguish the great companies from the losers, investors should learn how to describe and evaluate companies’ business models.

I still like the tried and tested SWOT analysis (Strengths, Weaknesses,

Opportunities and Threats) as it helps you gain an overview of your business and helps visualise where you and your competitors fit into your selected market. It will help you identify knowledge gaps or weaknesses in your company, and areas where you may benefit from professional advice. It should also help you identify advantages you can explore and promote.

A SWOT analysis should cover your business’s: • product or service • supply chain • resource base • available time and funding • target market knowledge • local market knowledge.

A thorough SWOT analysis will enable you to respond clearly to questions from prospective clients, suppliers, partners, investors, customers or others you need to influence.

As well as considering the overall objectives of your business, you also need to consider what you do, and how you do it.

Graham Bush is one of SA’s leading retail experts, inspiring thousands of business people over the past 30 years. His relaxed style and humour delivers powerful messages through motivational talks and presentations, and he contributes to several trade magazines.

After 20 years in the corporate world, Graham started ‘The Bush Kitchen...food for thought’, and often uses recipes and cooking as analogies for practical life and business skills. www.thebushkitchen.co.za

Another way in which you can understand your business better is to establish the ways in which it is likely to change as a result of either internal or external factors, such as legislation, customer-driven change or the availability of new technologies. It is important to understand how these changes are likely to impact upon the business. This will ensure that any investment you make now is capable of supporting your business and its operations in the longer term.

Richard Branson is often asked if he ever found a secret – or at least a consistent answer – to successfully building businesses. Here are his five “secrets”: • Enjoy what you are doing.

I agree, if you cannot enjoy what you are doing – what’s the point?

• Create something that stands out.

Whether you have a product, a service or a brand, it is not easy to start a company and to survive and thrive in the modern world. In fact, you’ve got to do something radically different to make a mark today. Look at the most successful businesses of the past 20 years. Microsoft, Google or Apple, for example, shook up a sector by doing something that hadn’t ever been done and by continually innovating.

• Create something that everybody who works for you is really proud of.

Businesses generally consist of a group of people, and they are your biggest assets. Again, by going ‘undercover’ you can discover these ‘assets’ in your business.

• Be a good leader.

As a leader you have to be a really good listener. You need to know your own mind but there is no point in imposing your views on others without some debate. No one has a monopoly on good ideas or good advice. Get out there, listen to people, draw people out and learn from them. As a leader you’ve also got to be extremely good at praising people. People flourish if they’re praised. Usually they don’t need to be told when they’ve done wrong because most of the time they know it. If somebody is not working out, don’t automatically throw him or her out of the company.

A company should genuinely be a family. So see if there’s another job within the company that suits them better. On most occasions you’ll find something for every single kind of personality.

• Be visible. A good leader does not get stuck behind a desk.

Again this is a favorite of mine, as so many managers are stuck with their noses on a flat screen looking for and compiling reports for another manager to look at, while on the shop floor the real ‘business’ is taking place!

Five secrets from a master leader, yet so easy to do! So again I ask the question: ‘Do you know your business – really?’

PAGE 39

AutoForum - November 2012

Deloitte highlights APDP benefits

A

ccording to a media release sent to Autoforum in early October, the new Automotive Production and Development Programme (APDP), due to be implemented in January, is not the bad news most SA companies are expecting it to be. Rather, according to Deloitte, it is set to bring considerable benefits to industry players – but only those who comply fully with the new legislation.

The release cites Peter Maxwell, Director: Taxation Services, Manufacturing and Automotive Industries for Deloitte, who says that unlike the previous MIDP programme, the new ‘productionfocused’ APDP, will benefit light motor vehicle and automotive component manufacturers for both local and export sales. In addition, the programme is expected to enable local automotive component suppliers, who are not necessarily targeting the export market, to qualify for APDP benefits. It notes, however, that these benefits are subject to compliance with certain specified requirements, and for component manufacturers that includes the provision that they also sell to a light motor vehicle manufacturer.

And it’s these light passenger and commercial vehicle manufacturers - as well as their component suppliers - who will be able to qualify for the benefits. Sadly, medium and heavy commercial vehicle manufacturers are, for now, left out in the cold.

PAGE 40

Deloitte quotes figures that show that the automotive sector contributes an estimated 6% to 7% of SA’s GDP - the largest single contributor by sector in the country. This includes the industry’s retail and wholesaling segments.

“In this way, the APDP programme is designed to reward automotive component manufacturers who are aligned to a South African motor vehicle manufacturer, or are part of an international vehicle manufacturing supply chain.”

The APDP will see two forms of incentive become available for vehicle manufacturers - a Production Incentive (PI), and a Volume Assembly Allowance (VAA). To qualify for the latter, OEMs must achieve a minimum factory production output of 50 000 vehicles a year.

PI is worked out based on the selling price of the vehicle or component, minus the value of certain ‘non-standard’ materials and components. Included in the ‘non-standard’ amount is the imported content of the materials and components. This difference results in the ‘value added’.

According to Maxwell, many OEMs have already planned for extra production volumes just so that they are able to take advantage of this new provision, and adds that “at government departmental level there is an apparent desire to see the entire automotive supply chain working more closely together, in order to benefit fully from the APDP programme”. He points to the fact that component manufacturers will be required to have at least 25% (or R10 million) of their automotive turnover coming from sales to OEMs to qualify for a PI.

For these non-standard materials, the incentive will be based on a percentage of their value. This will be tracked along the supply chain and through to the end claimant, using a Standard Material Declaration Form (SMD).

This, he believes, will encourage more component manufacturers to, over time, relocate their manufacturing bases closer to those of vehicle manufacturers, “in effect creating more automotive clusters”.

Maxwell continues: “To obtain the maximum benefit from these incentives, automotive industry manufacturers need to ensure that they understand the programme fully and apply it correctly.

As with any other incentive programme, whether in the form of customs duty rebates or refunds ... participants will be closely scrutinised by the authorities.”

He concludes: “Industry players need to be compliant with both the APDP programme and relevant provisions of the Customs and Excise Act, in order to benefit fully from the new APDP programme. These are complex areas and include key differences to the MIDP.”

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PAGE 41

AutoForum - November 2012

Emerging markets and mobility services are key

A

report released by KPMG, entitled ‘Global Automotive Finance and Leasing: The Role of Product Diversification and Emerging Markets in Future Growth’, states that emerging markets and new mobility services are key to future growth in the auto leasing and financing markets.

“Auto leasers and financiers will need to develop new concepts to align their services to technological improvements,” says KPMG’s Global Head of Automotive, and a partner at KPMG’s German firm, Mathieu Meyer name?. “The leasing of batteries, for example, may prove to be a sustainable and rewarding venture for auto leasers and financiers to expand into, particularly given the high cost of (purchasing) batteries. By separating the lease of the battery from the car itself, auto leasers and financiers can both reduce their risk and generate additional revenue simultaneously.”

At the same time, new services such as mobility-as-a-service programmes, green fleets, and additional banking products offer new ways to generate profit, not only over the long-term horizon in the emerging markets, but also in the more established, yet mostly saturated finance and lease markets of Western Europe and the US. The delivery of new services, such as credit cards and deposit banking, are also expected to help shore up revenues in the more mature markets of the US and Europe. At the same time, the report finds that the on-going credit crisis is pushing many organisations towards creating their own banking services in order to reduce their reliance on banks for refinancing.

In South Africa, automotive financing is either supplied by retail banks, which can service an existing client with or without a joint venture with an OEM, vehicle dealers that work in joint ventures with the major banks, captive finance companies, which are finance companies wholly-owned by OEMs,

PAGE 42

and lastly, private finance companies that offer car loans and rent-to-own options of used cars. KPMG believes that the automotive finance industry in South Africa has adapted well to the implementation of the National Credit Act and the global economic crisis, and is seeing an improvement in approval rates of applications for finance, partly impacted by the historically low interest rates.

Meanwhile, the report has also found that, while risk potential is higher in emerging markets, strong prospects exist through the offering of traditional finance services, as well as the further expansion of lease and additional business services. The report writers feel that the finance and lease businesses of automotive original equipment manufacturers (OEMs) would stand to benefit by adjusting their operating models to meet the changing global conditions.

Meyer adds that China, India and Russia have massive potential to offer to leasing and finance organisations. He points out that not only are these markets experiencing tremendous development and increasing affluence indicating high growth potential for auto sales overall, but customers in these markets are also starting to become much more accepting of leasing and financing arrangements. “Ultimately, we expect that the emerging markets will deliver tremendous growth to the leasing and finance business of the OEM captives.”

The report also finds that while the introduction of alternative propulsion systems (such as hybrids and pure electric cars) is a key growth agenda item for auto manufacturers, the vehicles create significant opportunities for their captives as well.

However, given that the value of an electric car is highly dependent on the

expected lifetime of the battery (which can vary widely) and the technology, leasers and financiers will find that their residual value formulas become increasingly complex. Moreover, the introduction of new technologies may well devalue the resale potential of a vehicle at the end of the lease.

According to the report, shifting customer preferences and the rise of hybrid and electric vehicles will force captive leasing and financing companies to develop and promote their own mobility services like car-sharing or multi-mode transportation models. According to Gavin Maile, KPMG’s Africa Automotive Leader: “The South African automotive sector is a few years away from having a thriving electric vehicle market due to greater distances travelled, a small but rapidly-growing number of available electric vehicles and a lack of the required infrastructure. The opportunities that exist in the developed countries for financing of batteries and availability of mobility services, for example, do not currently exist locally.”

When it comes to captive financing, Maile explains that, according to KPMG’s recent Global Automotive Executive Survey, 64% of respondents believe that a captive financial services arm can contribute significantly to an OEM’s future success.

New and used car inflation slows in Q3

A

ccording to the TransUnion third quarter Vehicle Pricing Index (VPI), new and used car inflation has slowed to its lowest level this year - touching 2.3% and 2.1% respectively.

“Both the new and used markets remain relatively strong with the used market having experienced positive growth of 4.1% for the quarter. According to the National Association of Automobile Manufacturers of South Africa (Naamsa), in August, new passenger sales increased by 12.5% year-onyear. “We expect this double-digit trend to continue for the remainder of this year,” says TransUnion Auto CEO Mike von Höne.

The lower growth in the used market has led to a further narrowing of the sales ratio between new and used cars.

Analysis of TransUnion’s vehicle financial registration data reveals that the ratio of new to used vehicles financed is now 1.63 used cars for every new car financed in August.

This is down from 1.88 in May. “Interestingly, around 80% of all new and used cars financed are priced at less than R200 000. When one considers that only 15.5% of all new cars fall within this price bracket and 66.5% cost more than R300 000, it’s clear that consumers remain extremely price sensitive,” he adds.

“This appears to be impacting on dealers. In a market that remains exceptionally competitive, dealers are buying and retailing further behind the TransUnion Auto Dealers’ Guide values.”

TransUnion dealer return information indicates that the premium and budget used sectors are experiencing the most pressure – the premium market because of the narrowing price gap between new and used cars, while the budget sector is being driven by high levels of competition between dealers, brands and marques.

PAGE 43

AutoForum - November 2012

INNOVATIONS

AutoForum - November 2012

The latest automotive technology

Innovation in fuel outlets: as green and mobile as they come...

- Robert Kaiser

I

t is at times amazing to witness how human ingenuity, once stimulated to focus on problem solution, can produce truly innovative and effective outcomes to address problematic situations.

In this era of environmental awareness and the quest for applying energy as efficiently and sparingly as possible, significant resource and attention has already been, and still is, focused on addressing essential and critical issues relating to protection of the environment and conserving energy. The retail fuel industry is no exception.

At the ginormous Automechanika Frankfurt Show, held in mid-September, a service station solution was on display that is the most innovative embodiment of the quest to achieve significant energy efficiency in operation and which could also be the most ideal solution for providing fueling solutions to remote rural areas I have yet come across. The solution is a mobile service station that can be erected in a matter of days. Developed by German company Krampitz Tanksystem GmbH, the design is based on container dimensions and can be

PAGE 44

supplied in various configurations according to the dispensing volumes required, with convenience store options included in the design.

What makes the Krampitz System environmentally friendly is that: • The storage of fuel is above ground, which negates the risk of fuel leaking out of underground storage tanks and • In remote areas where power supply may be a problem, the service station can be powered by solar panels that generate sufficient electricity to run the entire unit with sufficient battery capacity to run the service station off battery power only for extended periods when there may not be sufficient sunlight, such as during cloudy periods.

The amazing aspect of the system is that, according to Krampitz, one week of preparation is required for the construction of a foundation plate, after which the modular service station could be erected within one day. In areas where there is no power available, the installation of the solar power system may add a few days to finalisation. Should sales volumes

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The concept also makes it possible to move a station to a new location relatively easily, which is another plus of this amazing concept.

Truly an innovative and environmentally friendly concept, which could be a significant solution for bringing fuel distribution infrastructure to even the most remote areas, as the challenge of non-existent or poor power supply infrastructure is eliminated.

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This creates a pleasant airy and open driveway environment. Solar panel technology is incorporated in the design as a power option and special attention was given to using recyclable materials in the construction of the site. This new design will be used by Total worldwide in future and the innovative steps taken by the company to incorporate environmentally conscious principles in its design was justly lauded by the Minister. It is foreseen that in future environmentally friendly design principles will to an increasing extent be incorporated in modern service station developments by oil companies.

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But what is happening in South Africa?

On 21 September Dipuo Peters, the Minister of Energy, officially opened a service station in Fairland, Johannesburg, which is the first of its kind developed by Total SA, according to a new service station branding standard developed by the company. The new standards incorporate environmental and energy conservation objectives. The driveway canopy is constructed of a transparent material that lets sunlight through and minimises the need for artificial lighting on the driveway.

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PAGE 45

AutoForum - November 2012

INNOVATIONS

Water recycling system for car wash operations - Robert Kaiser

A

n innovative water recycling system for car wash operations was on show at September’s Automechanika Frankfurt Expo. The solution incorporates a completely biological filtration process which removes all oil, wax, detergent and other pollutants 100% and makes the water available for re-use, over and over again. I was shown a bottle of clear water that had been through a car wash operation no less than 700 times!

The only requirement is an augmentation of water to compensate for waste and evaporation, estimated at 25-30 litres of water per car washed. This, in car wash terms, is a very

small amount of water. Systems are custom designed for individual applications to ensure that filtration capacity is optimised.

The unique aspect of this system is not only the fact that it constitutes an incredible saving on water in a car wash operation (making it very desirable in arid areas where water is scarce), but also the fact that no chemicals are required to perform the filtration process as it is a totally biological process. Once a filtration system has been installed, it is a closed system and merely requires a maintenance check on the biological capacity every five years. See www.faritec.eu for more details.

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PAGE 46

PAGE 47

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PAGE 48

tomotive. e Pieters of MACS Au auto.co.za. acs courtesy of Charmain Information supplied it www.macsauto.co.za or marketing@m vis For more information

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PAGE 49

AutoForum - November 2012

Strikes & spikes

- Dave Scott

A fierce, electrically-charged thunderstorm raged around my home office and a deafening lightning-blast was a severe reminder that my precious computer C-drive should have been completely disconnected from the house mains. That night I read in the October 2012 issue of CAR magazine – FORUM letters – how a Mr Francois Rademeyer experienced a ‘near-miss’ lightning strike while on the road in a storm. This letter goes on to outline how the ‘near-miss’ wrecked the entire electronic computer management system in Mr Rademeyer’s Mitsubishi Outlander resulting in over five months of delay before a final decision to scrap the car – eishhh!

So what’s this got to do with trucks? And in any case isn’t a vehicle safe from a lightning strike because you’ve heard it’s a ‘Faraday Cage’? What can be done to protect the fleet?

But then what is the difference between a spike and a surge?

Surge versus spike ESKOM power off the national grid is a supposedly perfect AC sine wave and is usually quite close to this. Occasionally this is not the case when lightning strikes and other events impact on electrical power. Such events usually fall into two general categories, very high voltage spikes – 1000’s of volts, but usually only a few microseconds in length – or longerduration surges, but at much lower voltage.

PAGE 50

Here are definitions for spikes and surges.

• A spike is a transient electrical signal of very short duration and usually high amplitude.

Amplitude is the magnitude of change in a varying quantity from its zero value and usually measured in voltage, or decibels to denote volume.

• A surge is a sudden, prolonged and possibly damaging, increase in line voltage. Surges can harm electronics and corrupt or destroy data. The damage occurs when power is switched off without warning followed by current surges when power supplies resume.

Stand-by power has to be protected against power returning from the national grid otherwise the stand-by power generation unit will blow as well.

Continued on page 52

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 51

COMMERCIAL VEHICLES

AutoForum - November 2012

A lightning spike Named after Michael Faraday (17911867), English physicist and chemist, a ‘Faraday Cage’, also called ‘Faraday Shield’, is a metallic enclosure that prevents the entry or escape of an electromagnetic field. An ideal Faraday Cage consists of an unbroken, perfectly conducting shell. Since the conductor is an equi-potential, there are no potential differences inside the container. As aluminium is a good electricity conductor, an aircraft’s metal hull acts as a Faraday Cage protecting its occupants from lightning.

conducting shell. Failure analysis expert, Patrick Swan, comments: “A lightning strike will blow vehicle electronics through any exterior aerial that is connected into the vehicle’s wiring loom.”

Retractable aerials are no longer a feature of modern vehicle design. I can hardly visualise drivers stopping to unscrew the ‘bee-sting’ aerial fitted to a car roof prior to driving into a summer thunderstorm – the same applies to truck aerials where some trucks sport two aerials. To ask fleet drivers to detach and remount vehicle aerials (depending on weather conditions) is one activity that is just too far off a driver’s job description and checklist grid.

Unlike trucks, aircraft have to submit to extensive lightning tests. The secret to safe aircraft lightning hits is to allow the current to flow through the skin from the point of impact to some other point without interruption or diversion to the interior of the aircraft. Aircraft also employ a device known as a ‘static wick’ - a piece of metal connected electrically to the frame of the aircraft, with one or two needles on the end. A static wick is housed in a fiberglass rod to insulate it from the airplane. Because the needles concentrate the electric charge around them, and they are connected to the airframe on the trailing edges of the wings, they allow the airplane to dissipate any static electricity it may build up out into the air. In addition, shielding and surge suppressors ensure electrical transients do not threaten on-board avionics and miles of electrical wiring found in modern aircraft.

A welding spike

However Wingtips, the Boeing 737 Technical Site, makes the following comments on static dischargers (either wicks or rods) at the tips of the wings, stabiliser and fin: • They encourage the static build-up on the airframe to bleed off which would otherwise accumulate and cause radio interference, particularly of ADF & HF. Note that they are not for lightning protection.

Ask any fleet about the main factor causing on-road breakdowns and electrical/electronic problems will top the list. According to a WABCO‘s Enoch Silcock, without isolating ABS systems a trailer fleet undergoing welding maintenance blew every ABS module.

It’s this type of untrained, ignorant action that breaks down new technology’s usefulness and grows perceptions that electronics don’t work in Africa.

Trucks & cars cannot take a hit

Pro-active policies for fleet electronics

How then does lightning break a vehicle Faraday Cage and spike the electronics? It has to get inside the exterior

PAGE 52

But the fact remains that trucks parked in a yard with extended aerials is a lightning-rod invitation to attract the negative/positive build-up between the earth and sky that will discharge into the fleet. According to Sipho Angaaz, Diepkloof’s demon taxi-driver: ‘Electronics work with smoke, ’cause when smoke escapes they stop working’!

A modern truck, even a reefer trailer, fairly bristles with communication and signalling equipment. Two-way radios, GPS vehicle tracking and FM radio bands all require some form of getting the signal out there but are these devices isolated – can they be isolated – from the main wiring loom and vehicle electronic system?

Training and discipline are only enforceable through a fleet policy to protect

valuable vehicle electronics. Here are a few key steps to minimise downtime: • Train and re-train staff that protecting electronics ‘is just the way things happen around here.’ It must become a maintenance culture.

• Stop all jump-starting. Invest in standby batteries that stay fully. charged. Most light vehicle manufacturers forbid jump-starts.

• Don’t replace a 5 Amp fuse with a 30 Amp fuse – where the truck fries but the fuse is OK • Ensure that any welding repairs are conducted with electronics in isolation.

• Ensure that all electrical accessory installations have full OEM approval and that fitting is documented in detail.

• Secure, colour-code and mark batteries against theft and swap-jacks.

• Forbid drivers from conducting their own road-side electrical repairs. However well-meaning a driver may be, casual knowledge is dangerous stuff when it comes to vehicle electrics.

• Make it a dismissible offence for anyone who pulls batteries while the engine is running – it’s deliberate negligence.

• Tighten up on trailer electrics. Protect the truck tractor if there is no control over the trailers that will be hitched.

• See to it that lightning damage is included in insurance cover. Don’t park trucks where lightning is likely to be attracted.

It seems that the automotive sector has entered the digital age with a focus on managing clean exhausts while not watching static electricity threats to vehicle operating systems. And then it’s a matter of cost – attaining aircraft industry standards will whack the price up even further. But something has to be addressed here because being without my car for five months or having a truck off the road for an equal period is just not acceptable.

For further info please visit www.scientificamerican.com/article. cfm?id=what-happens-when-lightni http://www.physlink.com/education/askexperts/ae568.cfm, Wingtips The 737 Technical Site

PAGE 53

COMMERCIAL VEHICLES

AutoForum - November 2012

Simulation training – Training drivers for less - Kirsty Chadwick

I

SO has just published the ISO 39001, a management system standard for road traffic safety, putting fleet safety in the spotlight. A 2011 study by Abela Driver Safety found that 65% of all company vehicle drivers are involved in one accident a year. These accidents result in litigation, increased insurance premiums and driver downtime. There are a number of ways to decrease the incidence of fleet accidents but, according to experts, the most effective way to do so is to improve and increase driver training.

Abela Driver Safety’s research discovered that 95% of the road accidents they monitored could have been prevented if the drivers involved had the skills needed to react appropriately to potentially dangerous situations. Valid drivers’ licenses are just the first step in preparing drivers for road safety, they found.

ISO 39001:2012, Road traffic safety (RTS) management systems is widely held to be a major contribution to the 2011-2020 UN Decade of Action for Road Safety. Claes Tingvall, Chair of the ISO technical committee that developed the standard, quotes World Health Organisation figures, saying: “Road accidents account for some 1.3 million fatalities worldwide each year.”

“The number of people killed is on the increase, particularly in low- and middle-income countries. It is crucial that governments commit to implementing a series of specific and attainable actions, including the setting of ambitious road casualty reduction targets.

The sharing of know-how and experience is also needed.”

ISO 39001 is a tool for vehicle fleet operators worldwide who want to reduce serious injury due to road accidents.

It provides them with state-of-the-art safety requirements including vehicle condition, driver awareness and speed.

PAGE 54

Driving simulators are being increasingly used in training for all sorts of vehicles to recreate challenging conditions a driver may encounter on the road and to measure their responses, including reaction, awareness and speed. This makes them ideal for learner drivers to practise managing dangerous situations without any damage to the operator or to the equipment itself.

“Driver training in simulators,” says Kirsty Chadwick, MD of The Training Room Online, designers of presimulator computer based training (CBT), “don’t only reduce the danger to operators learning to operate new vehicles, but also potential damage to the costly vehicles. The training is highly customisable for each vehicle, making it very cost-effective and easy to implement change if needed, in the case of model upgrades, for example.”

In the case of highly complex machinery, learner operators are first trained on simulation software before being trained on an actual simulator, which usually includes a desktop PC, steering wheel, brake, display monitor and throttle pedals, as well as bespoke software.

allowing operators to learn wherever they are, which is vital for a workforce that’s often on the road and can’t be tied down to a computer or rely on a trainer for regular lessons.

“Simulation training,” says Chadwick, “makes sense as a training solution in the transport industry, where accidents are expensive and potentially fatal for operators. Proper training and preparation saves the sector millions of rands every year in reducing possible damage to vehicles alone.”

In-vehicle training, via a display mounted on the dashboard like a GPS system, has the added advantage of

Kirsty Chadwick is MD of e-learning design and development company The Training Room Online. www.thetrainingroomonline.com

AutoForum - November 2012

COMMERCIAL VEHICLES

Commercial vehicle insurer pool – Too many fish in the pond?

H

eavy Commercial Vehicle Underwriting Managers Managing Director, Chris Barry reports that, over the last decade, the commercial vehicle sector has seen some drastic changes in terms of operational growth. “The number of underwriters operating in this space has grown from nine to an estimated 26.”

He continues that a significant challenge facing the industry, however, is an inevitable and unsustainable “short term cash flow” underwriting, which appears to be a calculated strategy to gain short-term market share by premium discounting. He adds that, with this, commercial vehicle insurance is seen to be South Africa’s second “gold rush” and premium volumes that clearly appear to be too good to resist has resulted in a rush of new insurance providers.

The long-term effects of these market changes may result in insurers having to subsidise poor commercial vehicle underwriting from commercial and industrial accounts, for example.

Others may resort to more frequent repudiations of claims, while larger organisations may write off their commercial vehicle books as “loss leaders”.

Barry believes that this scenario tarnishes the reputation of underwriters who continue to make it their business mission to excel at industry best practices. To date, there have been some casualties amongst underwriters,

PAGE 56

but as long as the behaviour continues, it is unlikely that a real alignment and correction of premium rates will return to normality for some time.

Industry negligence Further, Barry believes that government has denied the unbelievable contribution that the road transport network makes to the functioning and economy of South Africa. He adds that the argument that continues to suggest that South Africa’s rail network compliments road, is just not realistic.

He also feels that too often operators guilty of gross criminal negligence escape with impunity, highlighting the case with the Knysna bus accident last year in which a bus carrying pupils from Rheenendaal Primary School plunged off a bridge and into a river in Knysna.

Barry believes that the real heroes in South African transport are those companies that consistently apply best practices, that have consciences and continue to strive to be exemplary SA citizens in every sense of the word.

Barry concludes that the challenge continues to get the authorities to level the playing fields for the good guys. The best operators should be rewarded and complimented for their efforts, while the bad guys need to have barriers preventing entry into this important industry.

PAGE 57

COMMERCIAL VEHICLES

AutoForum - November 2012

Truck competence proves popular This year’s Automechanika Frankfurt boasted a new theme, especially targeted at commercial vehicle managers and owners – entitled Truck Competence – which show organisers confirm proved to be a huge success. So much so that they are planning to expand it at the next show in Frankfurt in 2014.

A

The organisers explained that the rationale behind Truck Competence was the increasing number of service centres that cater for both passenger and commercial vehicles, following consolidation after the global economic downturn, as well as the large number of exclusive truck service operations, both OEM and independents. It was included as a theme at an Automechanika trade fair for the first time at the Middle East show, held in Dubai in June. At that event, 418 of the 1 324 exhibitors listed were suppliers to the commercial vehicle markets, and going forward it is expected to be rolled out at the other Automechanika trade fairs around

the world, including Automechanika Johannesburg, which takes place at Expo Centre, Nasrec, from May 8-11, 2013.

The commercial vehicle involvement was across a broad spectrum along the entire commercial vehicle value chain from service and repair parts via workshop equipment to accessories, collision repair and bodywork care.

We look forward to seeing it on our own turf soon.

Show Time Midas Group charity golf day

- Warwick Robinson

Midas held their annual charity golf day on the 25th of October.

As part of the group’s commitment to a number of socio economic development programs, the event has historically raised money for of specific schools and youth development centres, as well as hospice and other causes - and this year’s event was a record breaker. The total amount raised will only be finalised at the end of November, but so far a figure the golf day alone reached a total estimated to be over R380 000.

N

ot only did all participants donate to be part of the fun day, but a number of suppliers also donated items to the evening event’s auction. Gerhard Braun conducted the proceedings and managed to “fleece” the attendants in the name of goodwill. The biggest spender of the evening was Chris Brand of Safeline who bid a winning R43 000 for a painting of a Rhino in support of Rhino poaching awareness, an issue close to all of our hearts. Red Shuttleworth bid R10 000 for a weekend for 4 at Champagne Sports in the Drakensberg, and Len Terrelanche acquired a piece of golfing memorabilia for R4000.

In addition to the bids and participation funding, Rory Kirton of Triton express, who won Midas’ supplier of the year award

PAGE 58

for 2012, generously offered a donation based on 10% of Midas November account which substantially pushed the figure towards the record total.

The winning team on the day consisted of Graeme Stanley, William Louw, Theo Reinecke, Doug Schouten, but all teams were awarded prizes via a lucky draw. This included the team in very last place who all walked off with some of the best prizes, even though one member of the fourball had never played before!

SHOW TIME

PAGE 59

Advertorial AutoForum - November 2012

New ACS 9000 air conditioning service units fulfils all safety and environmental requirements

G

iven the new EU Chemicals Climate Protection Ordinance, which stipulates a limit value for Global Warming Potential of the operating materials used in automotive air conditioning units, Bosch found it necessary to replace its R134a refrigerant with a gentle but flammable R1234yf refrigerant. This means that air conditioning systems in passenger and commercial vehicles, weighing up to 3.5 tons, must be operated with the new refrigerant R1234yf.

Bosch reports that its new ACS 9000 air conditioning service unit fulfils all safety and environmental requirements, and enables the repair shop to handle the refrigerant safely and without risk.

Before each air conditioning service, all safety-relevant functions of the air conditioning service unit are tested.

This includes a leak test of the refrigerant circuit, where an analysis of the refrigerant is performed to ensure that refrigerant R1234yf is not polluted with other materials from the vehicle’s air conditioning unit, as this could lead to a reduction in cooling power.

The intuitive operation menu then guides the automotive mechanic through the automated test sequence for the air conditioning service. The ACS 9000 air conditioning service unit also has two separate clean oil circuits and is therefore suitable for servicing air conditioning units in both vehicles with conventional combustion engines as well as hybrid and electric vehicles.

Safe and easy handling with automated test sequence The innovative technology of the ACS 9000 ensures less refrigerant loss during used oil separation and the release of uncondensed gases. During filling, a very high level of gas purity is ensured.

The precise measuring technology of the ACS 9000 also ensures precise refrigerant filling. Thanks to the high recycling rate achieved by the new air conditioning service unit, very little refrigerant needs to be added during servicing. This saves the repair shop money because the new R1234yf refrigerant is more expensive than the refrigerant previously used.

PAGE 60

To enable the repair shop to perform an easy, fast and precise air conditioning service with the new R1234yf refrigerant, the Bosch developers have focused on easy operation of the ACS 9000, as well as safety. Intuitive menu navigation, target data for the different vehicle air conditioning units, gauges for high and low pressure, and a clearly visible LED status display all help to simplify operation. All filters, service hoses and the vacuum pump oil can also be easily changed.

The ACS 9000 series is available is South Africa, for any futher details kindly contact Dereck Knight from Robert South Africa on 082 415 0248.

No Jack Required (or a Mike, Piet or Thabo) TY R EW E L D TYREWELD is not a puncture prevention measure; it is a temporary, emergency get-you-home, repair sealant. Available in 340ml for passenger, and 500ml for 4x4 vehicles.

We all dread the nightmare scenario of a roadside puncture and it always seems to happen at night on a dangerous unlit stretch of road, when it's raining with no signal on your mobile phone.

In these circumstances you want to get off the road and on the way as rapidly as possible, and Tyreweld is, by far, the best answer. Holts Tyreweld coats the inside of the tyre, temporarily sealing the puncture and re-inflating the tyre in seconds.

Tyreweld's unique and safe controllable “tap� activator allows you to get off the road to safety within seconds of activating the sealant.

TYREWELD is an innovative water based latex sealant that has been extensively tested to ensure it does not degrade the rubber in the tube or tyre.

The product is washed out with warm water and any latex remnants easily removed with a buffing wheel.

Be prepared for a puncture at any time by carrying TYREWELD. No wheel change is necessary or tools required. Will not repair side-wall damage.

THE SPARE WHEEL IN A CAN For more info contact customer services on 011 613-6111 or sales@holts.co.za.

PAGE 61

Aftermarketplace AutoForum - November 2012

AutoForum - November 2012

Vredestein launches in South Africa Apollo Tyres South Africa reports that the exclusive Dutch-engineered Vredestein tyre brand has been launched into the South African market and is now exclusively available at Dunlop Zones.

Apollo Tyres South Africa CEO Dr Luis Ceneviz says the company is excited about the addition of this prestigious European brand to its product range.

The tyres are designed to complement top of the range performance cars and SUVs. “We are confident that Vredestein is going to gain positive review and a loyal customer base in this niche market,” he adds.

In Europe, Vredestein is viewed as one of the most elite performance tyre brands.

The company reports that Vredestein tyres are engineered to meet and surpass all safety criteria, including the stringent European safety standards; and have been awarded top marks in many leading international tyre tests.

Vredestein’s Sportrac 5 has been named as Auto Express magazine’s ‘Recommended Tyre of the Year 2012’.

i

Ultrac Vort

PAGE 62

Further, Apollo adds that the Premium Styling by Vredestein is a concept around which tyres are created to guarantee superior road-handling and performance with an extra elegant and stylish appearance. Offering a unique combination of lifestyle and technology, Premium Styling tyres are those tyres from the Vredestein range designed specifically to complement and enhance the most desirable and stylish top-end niche vehicles.

The following flagship Vredestein products are now available in South Africa: the Ultrac Vorti, Ultrac Sessanta, Ultrac Sessanta SUV, Ultrac Cento, Sportrac 3, Quatrac 3, Quatrac 3 SUV, Sportrac 5, Sprint Classic, Hi Trac 2 and Comtrac.

Since 1997 the Vredestein brand has been collaborating with the worldfamous Italian design consultancy, Giugiaro Design. Giogetto Giugiaro’s design achievements have ranged from the very first Volkswagen Golf and the BMW M1 to famous cars for Alfa Romeo, Ferrari, Maserati, Bugatti and Lamborghini. The global

Sportrac 5

automotive press named Giugiaro the ‘Designer of the Century’ in 1999.

In 2008, Vredestein celebrated its 100th anniversary. A century that has seen the company move from specialising in the production of a wide array of rubber products to a focus on manufacturing one of the premium tyre brands in Europe.

Today, as Apollo Vredestein, the company produces over six million tyres a year across a variety of applications, with a reputation for trusted, ultra high performance products that carry a stylish edge and are ideally suited to top-end vehicles.

For more information on the Vredestein product range, or to find a dealer in your area, call Apollo’s Share Call Line on: 0800 335 722, or visit www.vredesteintyres.co.za.

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Aftermarketplace AutoForum - November 2012

AutoForum - November 2012

BSE sold out of Clarke CP180 BSE Distributors reports that the company has sold out of its Clarke CP180 Professional Sander / Polisher, however, assures customers that new stock will be available in January 2013.

Powertech releases new IQ range The acceleration of technology has reached warp speed.

Most of the newer applications, such as renewable energy storage, power control, electric vehicles and hybrid electric vehicles, demand that battery technology produces higher energy and higher power, rapid capacity charging, longer life, and greater reliability.

To meet these increasing demands, Powertech Batteries has focused on exploring different battery technologies – all present in its new IQ range.

Through a long-term, symbiotic relationship with Nelson Mandela Metropolitan University, Powertech Batteries has been able to benefit from advanced materials testing and vital research on cutting edge technologies.

Powertech Batteries is also a member of the Advanced Lead-Acid Battery Consortium, allowing it the advantage of pooled resources of battery experts and access to ground breaking research from across the globe.

With all its additional features, the Willard Batteries IQ range is the high performance battery of choice for today’s car owner and thanks to an ethos of quality and know-how, Willard Batteries is still ‘The Intelligent Choice’.

PAGE 64

BSE Distributors Logistics Manager Adam Marcinko, says that although all the company’s stock is surprisingly sold out, spare parts and after sales service is a major priority and the company boasts a100% spares availability.

The Clarke CP 180 Professional Sander / Polisher proved to be very popular because of its value for money and quality.

There is also the full pack of accessories, which comes with the machine. “We believe we are the only supplier in South Africa to include a spare set of brushes with our Sander / Polisher as well as a full accessories pack to get you started,” says Marcinko.

He adds that the brushes are an excellent bonus and are available with all Clarke Power Tools.

A new introduction is the CPK180 accessory pack – another value for money item designed not only for the CP180 Clarke machine but suitable for all other makes of sander polisher of a similar type.

PAGE 65

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