Automobil July 2016 by Future Publishing

JULY 2016

VEHICLE EXPORTS Balancing the books

INAUGURAL SHOW NAACAM gears up for Durban exhibition

SA's AUTO FRANCHISING INDUSTRY

BLOWING HOT!

SAMBRA: Adding value to the world of motor body repair

RMI UPDATE: MERSETA JOINS FORCES ON ROI TOOL; SHARING AUTOMOBIL www.automobil.co.za WITH SOCIAL PARTNERS; FORECOURT CONVENIENCE; MIWAâ&#x20AC;&#x2122;S VOICE HEARD AT AAAS CONVENTION; MIWA GRADINGS FOR NORTHERN REGION

JULY 2016

22 -JULY NOVEMBER 2014 2016

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CONTENTS – JULY 2016 COLUMNS 5 7 9 58 66

Driver’s Seat: Jakkie Oliver, CEO of the RMI Editor’s Letter: Wynter Murdoch Hot Stuff: New product showcase Frequently Asked Questions: Answers from the experts Tailpiece: The state of Africa's auto industry UPDATES

10 News

Toyota’s R6,1-billion investment; Ferrari wins 2016 Engine of the Year Award; BMW 3-Series production shifts to Mexico; GMSA goes landfill-free

Editor: Wynter Murdoch wynter@thefuture.co.za Sub-editor: Peggy Lendrum peggy@thefuture.co.za Design and layout: Heinz Bawa heinz@thefuture.co.za Reporters: Ryan de Smidt ryan@thefuture.co.za

Adding value

RMI Update

P22

Reuben Van Niekerk reuben@thefuture.co.za

Advertising Sales Executives: Enver Lawangi, Greg Surgeon, enver@thefuture.co.za greg@thefuture.co.za Future Publishing (Pty) Ltd 1 Cecil Avenue, Melrose Estate, Johannesburg PO Box 3355, Rivonia, 2128 Tel: +27 (11) 268-6297

Franchising in South Africa

Though socio-economic factors and tough trading conditions have influenced South Africa’s auto franchising sector, opportunities exist for brands to grow

FEATURES

P36

P39

RMI Automobil’s Editorial Sub-Committee: Chairman: John Ellmore; Gary McCraw, Gideon de Klerk, Shamika Singh, Danelle Van Der Merwe, Marwaan Davids, Wynter Murdoch, Greg Surgeon, Jakkie Olivier, Jan Schoeman

Automobil is the official journal of the Retail Motor Industry Organisation (RMI) which hosts 14 constituent associations: ACRA (component remanufacturers); ERA (engine re-builders and automotive engineers); MDA (motorcycle, scooter, quad and jet-ski/outboard engine dealers); MIMA (Motor Industry Manufacturers’ Association); MIWA (the full spectrum of workshop operators); MPEA (wholesale and retail part dealers); NADA (new and used car and truck dealers); NAZA (number plate association); VTA (vehicle testing); SADFIA (diesel pumproom operators); SAPRA (Fuel resellers, convenience store and car wash operators); SAMBRA (collision repairers and automotive refinishers); SAVABA (vehicle body builders) and TDAFA (tyre dealers and fitment centres).

Moving into Africa

Choosing the right partner

Pioneering player

Car dealerships: distributorships or franchises?

Getting ahead

Deficits and surpluses

NAACAM show dates announced

Turbos on the charge

Rethink needed

Incapacity: Unsuitability and incompatibility

Work less, achieve more

What is ART?

Automobil is available to purchase from the publishers at R25 a copy. Automobil is published by Future Publishing (Pty) Ltd and produced for the Retail Motor Industry Organisation. Opinions expressed in Automobil are not necessarily those of the publishers or the Retail Motor Industry Organisation. Permission to republish any article or image or part thereof must be obtained in writing from the publisher. © Future Publishing (Pty) Ltd.

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merSETA joins forces on ROI tool; Forecourt convenience; Sharing Automobil with social partners; MIWA’s voice heard at AAAS convention; MIWA gradings for Northern Region

COVER STORY

Publisher: Richard Lendrum richard@thefuture.co.za Production: Mabel Ramafoko mabel@thefuture.co.za

SAMBRA is driven to add value and stay on top of its game in every aspect of its business and service delivery

Though franchising in Africa remains relatively small, it offers significant potential and opportunities Franchised workshop concepts are on the rise in South Africa Supa Quick started the country’s tyre franchising revolution Into which category do South Africa’s car vehicle dealerships fall?

Becoming a member of a recognised automotive franchise is a good move in terms of branding, marketing, buying power and support Whichever formula you use to determine whether South Africa’s trade in the automotive sector is profitable, the export of vehicles – which has increased by 91% in five years – is definitely to the countrys benefit NAACAM's inaugural show takes place next year in Durban

The trend towards downsized engines signals the end for naturally aspirated motors Recent amendments to South Africa’s Competition Act could undermine the chances of successfully prosecuting companies in cartel conduct

Two less common forms of poor work performance include unsuitability and incompatibility Top 10 tips for working less and achieving more Managing HIV/AIDS in the workplace

JULY 2016 -

BENEFITS OF BELONGING A short summary of the benefits of RMI membership

The RMI has represented the retail motor industry and its members for more than 100 years. With more than 7 500 member businesses, our unity is our strength. RMI representation at often volatile and disruptive centralised wage negotiations. Professional industrial relations advice by expert specialists, ensuring procedural and substantive fairness when disciplining staff. Industry labour relations seminars focused on the rules, agreements and industry-specific topics that affect retail motor industry businesses. Chairing of disciplinary hearings and AUTOMATIC entry and representation at the CCMA, DRC and Labour Court. Representation at various MIBCO and Industry-related Boards and committee structures.

Affiliation to reputable organisations recognised by Government, big business, consumers and relevant stakeholders like Business Unity SA (BUSA). Protection against one-sided legislative changes or new laws and regulations. Exceptional CPA support and member assistance during defence cases at the National Consumer Commission (NCC) and the Motor Industry Ombudsman of South Africa (MIOSA). Facilitation of a business-to-business complaint where both parties are RMI members, with a complaint resolution rate in excess of 95%. Quality and Standards function â&#x20AC;&#x201C; representing the retail industry at various South African Bureau of Standards (SABS) committees and working groups. Representation at the National Regulator for Compulsory Specifications (NRCS), defending our industry when compulsory specifications and standards are compromised.

The informative Automobil magazine and weekly web letters that facilitate two-way communication and create consumer and industry awareness. The RMI is regularly invited to comment on industry topics by both print and broadcast media, and participates in and hosts numerous conventions and shows. Associational accreditation ensures ongoing development and implementation of commercial value propositions specific to the association. Training needs and representation via merSETA and W&RSETA. We actively drive industry-wide training and apprenticeship issues through our position on the merSETA Board and our involvement with the Technica manuals. Representation at the Moto Health Care Fund, Industry Provident Funds and the Sick, Accident and Maternity Pay Fund. The RMI offers industry-specific products like RMI4BEE / RMI4LAW / RMI4OHS /RMI4SURE.

Need to get hold of the RMI? Turn to Page 8 of this issue for all the contact details

4 JULY 2016

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Speaking with one voice

DRIVER’S SEAT

Through the collective voice of its members, the RMI achieves success as a group that would otherwise be impossible as individual businesses, says CEO Jakkie Olivier, who reflects on the benefits of belonging

t the RMI, the month of June represents the end of the financial year and thus serves as an ideal time to reflect on the Organisation’s performance during the past 12 months. It is also the time of year when our loyal members should be reminded of the exceptional value proposition that the RMI provides without fail, and which gives credibility to our slogans: “Belonging is Better Business” for members and “Our voice is your peace of mind” for their customers. Reflecting on the past year, I am pleased to report yet another successful period. The RMI has continued to improve its financial status and reserve levels but, even more importantly, we have continued to grow our membership. This in itself is a vote of confidence for the Organisation to represent the retail motor industry with distinction. To be relevant, the RMI must continue to provide a superior value proposition to members at affordable subscription rates. For us, membership of the RMI is what ultimately distinguishes our members from their non-member competitors. Through the collective voice of RMI members, we can achieve successes as a group that would otherwise be impossible as individual businesses, for example to influence legislation or to skillfully negotiate with trade unions regarding wages and other conditions of employment.

Talking about wage negotiations, the strong representative position of the RMI membership against trade unions is one of the best reasons to make the RMI’s value proposition and benefits worth the subscription fee. We recently commenced 2016 negotiations and, judging by what we have to defend on behalf of our members, it’s a benefit worth thousands of rands. Not to mention the fact that the unions are demanding a nine-month agreement with an expiry date on June 30, 2017. As experienced in the past, multi-year wage agreements are an absolute must for a stable and peaceful industry, free from industrial action and disruptions in an already challenging economic environment. The negotiations, the economic challenges and the ongoing struggle for a return on investment make RMI membership essential and more important than ever before. RMI members would have received their membership renewal invoices during June and our plea is for yet another show of faith in the Organistion by renewing your membership for the 2016/2017 financial year.

• Influence against one-sided legislative changes or new laws and regulations affecting our industry; • Ongoing development and implementation of commercial value propositions – for members, by members; • Training and up-skilling of employees through various educational initiatives; • Exceptional CPA support in dealing with customer complaints; • Professional industrial relations advice and representation at the CCMA, MIBCO DRC and Labour Court; • Regular and ongoing information sharing through Automobil magazine, weekly web letters and newsletters, workshops, road shows and conventions; • Access to a competitive and superior industry medical aid, retirement funds and a unique sick, accident and maternity pay fund; • Voluntary participation in well-developed industry-specific products such as RMI4BEE, RMI4LAW, RMI4OHS and RMI4SURE; • A strong and reputable RMI brand, recognised by decision makers and the motoring public.

We are determined to continue with our collective efforts in building the RMI and Below is a short summary of the most its constituent associations into an even prominent organisational benefits that more dynamic and powerful organisation would be impossible without a strong – in order to successfully represent and membership base: protect the industry and to make a • Collective power when dealing with meaningful contribution towards the future government, big business, consumers, trade sustainability and profitability unions and other relevant stakeholders; of our members.

For information on the RMI and its workings, visit www.rmi.org.za or call 011 886 6300

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JULY 2016 -

CONSTITUENT ASSOCIATIONS Who do they represent and what are their objectives?

he RMI is a proactive, relevant, retail and associated motor industry organisation recognised as the leading voice in South Africa’s automotive aftermarket, serving the daily needs of its members and playing a key role in enabling motor traders to deliver top class service to motoring consumers. Here are the associations which fall under its umbrella… ACRA (Automotive Component Remanufacturers’ Association) ACRA represents component remanufacturers involved in the remanufacture of safety-critical components and radiators, an ever-growing industry in which keeping abreast of change is crucial for business owners. ERA (Engine Remanufacturers’ Association) ERA represents motor engineers who re-machine, rebuild and remanufacture engines in South Africa. ERA members promote the reuse of engines, parts and components in a manner that is green and sustainable. ERA members create employment and skills development opportunities, directly in their own machine shops and indirectly through suppliers to the industry and component manufacturers. MDA (Motorcycle Dealers’ Association) MDA represents members who are motorcycle dealers – these members benefit from an extensive array of value-add services and products such as commercial insurance, labour legal assistance and representation, consumer dispute resolution, and a strong relationship with the Association of Motorcycle Importers and Distributors. MIMA (Motor Industry Manufacturers’ Association) MIMA members are Parts, Equipment and Component Manufacturers and suppliers to Original Equipment Manufacturers and the automotive aftermarket that exports into Africa and other countries in the world. MIWA (Motor Industry Workshop Association) MIWA, the largest association within the RMI, strives to keep its members informed about the ever-changing auto repair industry, thereby ensuring that vehicles are repaired to acceptable standards designed to make them perform better and safely on South African roads.

NAZA (Number Plate Association of South Africa) NAZA supports the imposition of a national standard for number plates, as well as for legislation to govern their manufacture, embossing practice and protocol. NAZA members adhere to a strict code of ethics in ensuring their part in eradicating corruption within the sector. TA

Vehicle Testing Association

VTA (Vehicle Testing Association) The VTA represents private vehicle testing stations that are committed to operating within the law in accordance with the Road Traffic Act and the relevant SANS standards. In this highly regulated environment, the association represents the interests of its members at government working groups and is committed to enhancing the reputation of the industry in all the spheres. SADFIA (South African Diesel Fuel Injection Association) SADFIA members operate fully equipped pump rooms aimed at providing cost-effective service solutions for owners of diesel powered vehicles seeking fuel injection system testing, repair or replacement. SAMBRA (South African Motor Body Repairers’ Association) SAMBRA is an active leader in the motor body repair industry and consolidates, communicates and regulates repair standards in the motor body repair industry. SAMBRA ensures the provision of technical and business skills training that meets the demands of the industry and instils confidence in consumers and industry stakeholders. SAPRA (South African Petroleum Retailers’ Association) SAPRA represents and promotes the interests of petroleum retailers in South Africa and fosters strong relationships with the Department of Energy, oil companies, banks, financial institutions and other stakeholders that have an impact on the sustainability of the service station industry.

MPEA (Motor Parts and Equipment Association) MPEA represents South Africa’s auto part traders, including wholesalers, retailers and independent operators in the replacement motor parts industry. Genuine replacement parts are available at accredited MPEA spares outlets at affordable prices, backed by the manufacturer’s warranty.

SAVABA (South African Vehicle and Bodybuilders’ Association) SAVABA members are professional, certified and regulated vehicle body builders in South Africa who manufacture commercial vehicle body applications (tanker, coal, refrigerated trucks and trailers) and bus bodies (commuter and tourist type). Members manufacture using the latest equipment and highly trained staff to ensure strict compliance with SABS standards and other legal specifications.

NADA (National Automobile Dealers’ Association) NADA represents the interests of business people who own or operate new vehicle franchise dealerships and qualifying used vehicle outlets. NADA is committed to the image enhancement of the retail motor business, facilitating the interface between dealers and OEMs/ distributors, building relationships between dealers and customers and bringing relevant industry issues to the attention of government.

TDAFA (Tyre Dealers' and Fitment Association) The TDAFA is the only representative body for tyre dealers nationally. The association works on all issues relevant to tyres and the fitment industry. Strategically, the TDAFA is positioned as an intermediary between government, the tyre industry and consumers and is recognised by government and industry leaders as the legitimate voice representing tyre dealers.

6 - JULY 2016

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EDITOR’S LETTER

FRANCHISING in the spotlight

n spite of South Africa’s economic downturn, experts say franchising concepts remain resilient – and the good news is that local models developed by the automotive industry are spreading to other parts of Africa as brands seek to extend their influence on the continent.

In the words of Naas du Preez, chairman of the Franchise Association of South Africa: “There is no question that franchising is playing and can continue to play an even bigger role in growing South Africa’s economy, in nurturing entrepreneurship and small business and, above all, in creating jobs,”

That doesn’t mean to say that ideas that work well here will be equally successful elsewhere – the expert view is that venturing into Africa requires a lot of groundwork and research in terms of understanding markets and cultures.

Du Preez maintains that potential for growth in the franchise sector is significant, provided the right partnerships can be put in place and that the right spirit of entrepreneurship can be fostered.

Still, franchising provides tested recipes for sustainable business models – and profitable opportunities exist for those who are well prepared.

You can read about franchising’s current state of play in a special, 20-page section of this edition of Automobil, beginning on P18. I trust you will enjoy the read.

Wynter Murdoch Editor

ACCR No : 17-QA/0874/13

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JULY 2016

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NEWS

SPEAK TO US RMI EXECUTIVES

hief Executive Officer: C Jakkie Olivier jakkie.olivier@rmi.org.za

SAMBRA Edwin Martin edwin.martin@rmi.org.za SAPRA Vacant

Chief Operations Officer & Human Resources Director: Jan Schoeman jan.schoeman@rmi.org.za

TDAFA, ACRA Hedley Judd hedley.judd@rmi.org.za

Financial Director: Renee Coetsee renee.coetsee@rmi.org.za

TRAINING, TRANSFORMATION & ENTERPRISE DEVELOPMENT Marwaan Davids marwaan.davids@rmi.org.za

Company Secretary: Gary McCraw gary.mccraw@rmi.org.za

RMI BOARD MEMBERS

Jeánne Esterhuizen (President) Barry Canning (Vice-President) Ferose Oaten Jakkie Olivier Bruce Allen Lindsay Bouchier Pumza Gcanga Les McMaster George Nyabadza

RMI PARTNERS

SADFIA Louis van Huyssteen louis.vanhuyssteen@rmi.org.za ERA Pieter Niemand pieter.niemand@rmi.org.za

@AutomobilSA

www.rmi.org.za

NAZA Julian Pillay julian.pillay@rmi.org.za MPEA, MIMA Erwin Stroebel erwin.stroebel@rmi.org.za MDA Jeff Molefe jeffrey.molefe@rmi.org.za

RMI4Sure 0860-104-202 RMI4Law 0861-668-677 RMI4BEE 0861-764-233 RMI4OHS 012-998-7139

RMI HEAD RMI HEADOFFICE OFFICE Danelle van der Merwe Brand and Communication Manager danelle.vandermerwe@rmi.org.za

DIRECTORS

Q&S, SAVABA, FRICTION STANDARDS Vacant

Neo Bokaba Transformation Manager neo.bokaba@rmi.org.za

MIWA Vishal Premlall vishal.premlall@rmi.org.za

011-789-2542 | www.rmi.org.za

NAAASP EMPOWERMENT Marwaan Davids marwaan.davids@rmi.org.za

Surrey Square Office Park 330 Surrey Avenue Ferndale Randburg 2194

NADA Gary McCraw gary.mccraw@rmi.org.za

RMI REGIONAL OFFICES

VTA Joy Oldale joy.oldale@rmi.org.za

8 - MAY 2015

Facebook.com/AutomobilSA

Highveld: Jeff Molefe jeffrey.molefe@rmi.org.za Randburg: 011-886-6300

Vehicle Testing Association

Northern: Pieter Niemand pieter.niemand@rmi.org.za Pretoria: 012-348-9311 KwaZulu-Natal: Julian Pillay julian.pillay@rmi.org.za Durban: 031-266-7031 Eastern Cape/Border: Erwin Stroebel erwin.stroebel@rmi.org.za Port Elizabeth: 041-364-0070 Western Cape: Joy Oldale joy.oldale@rmi.org.za Cape Town: 021-939-9440 Free State/Northern Cape: Louis van Huyssteen louis.vanhuyssteen@rmi.org.za Bloemfontein: 051-430-3294

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HOT STUFF

NEW PRODUCTS

Monitoring the fleet iCAM Video Telematics has launched its iCAM 852, allowing fleet owners to stream live videos from multiple vehicles. The mobile CCTV system is manufactured locally. It has been designed to provide video solutions with combined vehicle tracking and fleet management capabilities.

With up to four cameras per vehicle including the option of infra-red, the iCAM 852 offers live video streaming and continuous video recording while the vehicle ignition is turned on and for up to four hours after it is turned off. GPS is embedded into all recorded video data with GPS + Map trip playbacks.

The company claims its installation helps to promote increased driver productivity, reduced fuel theft, increased load frequency and reduced turnaround times.

“Video recording on all trips, speeding and idling is tracked and one can easily have event triggers on behaviour like harsh braking, acceleration or accidents. Other triggers could include cabin doors, CANBus or trailer doors,” says Wels.

“It is a powerful video streaming and fleet management product, designed for safety and driving analysis through video technology. The iCAM 852 was designed from ground up, with scalability in mind in order to support any sized fleet,” says iCAM Video Telematics managing director Gary Wels.

Fleet owners can choose to receive immediate email alerts regarding triggers, while contact with the driver is direct via an auto answer mic and speaker system. For more information contact iCam at 08611 58527 or visit www.icamvideo.co.za.

Cutting edge

for long cuts. Ryan Hunt, sales director for Vermont Sales, describes the Nibbler as Tork Craft’s best kept secret.

Tork Craft’s Pro Series Nibbler is a double bit metal sheet cutter that attaches to an electric or cordless drill. It cuts most metals, including iron plate (1,8mm); stainless steel plate (1,2mm); copper, aluminium, plastic and plywood (2,0mm).

“There are not many metal cutting tools out there that will do the job as well the Nibbler – certainly not when cutting all types of metal plus shapes and angles. It’s an outright winner.”

Sheet cutting speed is said to be up to two metres a minute, with cooling oil recommended

The cutter is available nationwide at leading specialist stores. For more information contact Vermont Sales at 011 314 7711 or log on to www.vermontsales.co.za.

30 Years of experience Specialising in automatic transmissions with expertise on the premium brands

083 449 0747 011 609 4484 / 2752 mike@executivetransmissions.co.za www.executivetransmissions.co.za www.automobil.co.za Address - Unit 1, 9 Fountain Rd, Eastleigh, Edenvale, Gauteng

MAY 2016 -

NEWS

Unpacking Toyota’s

resident Jacob Zuma, accompanied by Trade and Industry Minister Rob Davies and the Minister of Economic Development, Ebrahim Patel, recently visited Toyota South Africa's manufacturing facility at Prospecton, Durban, to mark an announcement by the Japanese automaker that it had invested R6,1 billion in the assembly at the plant of latest generation Hilux and Fortuner models. In his opening address, Andrew Kirby, president and CEO of Toyota South Africa Motors (TMSA), said the investment underlined the company’s commitment to South Africa and would also help to fly the TMSA flag high on the international stage thanks to a robust export plan for the models.

Presidential acknowledgement for Toyota's R6,1-billion investment at its Prospecton Plant… Jacob Zuma with Johan van Zyl, chairman of Toyota South Africa Motors

More than that, he said, the occasion marked a celebration of the pivotal role that both Hilux and Fortuner had played in the overall development of the South African motor industry.

to change with the times and I am glad to say that as we have changed, we have become better and more focussed to the benefit of our customers.”

Company chairman Johan van Zyl echoed Kirby’s sentiments, adding: “TSAM today is a vastly different company to the one that operated only 10 years ago. This is all due to an ability

However, Van Zyl warned that stability on the production line was imperative to the success of the country’s motor industry. “Though we are justifiably proud of its achievements in growing

production – and especially exports – post-1994, we must remember that South Africa currently produces less than 1% of the 90-million vehicles made worldwide each year. “We have to remain globally competitive not only in terms of wages and productivity, but also regarding labour stability. I cannot stress enough the

Ferrari wins 2016 Engine of the Year Award

errari’s 3,9-litre twin-turbo engine took overall honours in this year’s International Engine of the Year Awards, also winning the Performance Engine and New Engine categories. The V8 unit powers the 488 GTB and 488 Spider – both derivatives having recently been released in South Africa – as well as the California T, though with a slightly smaller displacement. In another accolade, the brand’s naturally aspirated 6,3-litre V12 – used in the F12 berlinetta and F12tdf – won the award for the best engine in the Above Vittorio Dini, Head of Powertrain at Ferrari, collects the International Engine of the Year Award for the brand’s 3,9-litre bi-turbo V8

10 - JULY 2016

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R6,1-billion investment importance of engagement – engage, engage and engage again – and the need to employ dispute resolution as the first and ultimately only line of defence rather than resorting to strike action. “Nevertheless, I am confident that a fair and equitable labour agreement can be reached and rest assured, that no matter what, Toyota will do its utmost to continue to put its customers and South Africa first.” Unpacking the R6,1 billion investment – the biggest Toyota has made in South Africa – sees R1,9 billion allocated to supplier tooling, R1,4 billion to in-house tooling and the remaining amount to facilities and buildings to cater for new machinery and presses. Toyota’s component plants, situated across the road from the main plant, have also undergone changes with new equipment introduced to provide better accuracy, quality and process stability, while at the same time increasing automation levels. “It’s worth noting that the previous Hilux and Fortuner models were equipped with about 1 500 locally produced parts while the new models

have swelled the number to 2 700,” says a spokesman.

Red Cross and Red Crescent Societies (UNIRFC),” says Toyota’s spokesman.

Toyota’s suppliers have also made substantial investments in their facilities, attracting five new international suppliers and creating as many as 2 000 new jobs in the supply chain.

In addition to producing and supplying fully built-up light commercial and passenger vehicles (CBUs) to the globe, TSAM will also be exporting new components to Thailand for the use in that country’s Hilux, Fortuner and Innova production.

On the export front, the Hilux and Fortuner are vital to TSAM’s success, Prospecton being the second biggest manufacturer of the models behind Toyota Motors Thailand, and the only facility charged with building Hilux derivatives that meet Euro 6 regulatory demands. Exports this year are forecast to be slightly more than 50% of TSAM’s total Hilux and Fortuner production – about 55 000 units to 74 countries. “TSAM is also extremely proud that the new and enhanced, locallyproduced Hilux will continue to be supplied to 16 United Nation affiliated programmes, funds and agencies. “These include the World Health Organisation (WHO), the United Nations Children’s Fund (UNICHEF) and the International Federation of

4,0-litre category. In a statement number of wins in the competition to released after the results had been nine in five years while Tesla’s full electric announced at Engine Expo 2016 in powertrain – which drives Model S and Stuttgart, Ferrari attributed its success Model X derivatives – retained the Green to “a concentration of uncompromising Engine award for a third time. engineering solutions.” Faith Lelaka… Volkswagen’s first female unit head Audi’s 2,5-litre five-cylinder turbocharged BMW’s 1,5-litre, three-cylinder engine engine – used in RS3 and RS Q3 again took the honours in the 1,4-litre derivatives – took the 2,0-litre to 2,5-litre to 1,8-litre category, while PSA Peugeot title for the seventh consecutive year. Citroën retained the 1,0-litre to 1,4-litre category title for its 1,2-litre Also in a repeat of last year’s results three-cylinder, turbocharged unit. Ford Mercedes-AMG won the 1,8-litre to claimed the Sub 1,0-litre award for its 2,0-litre category award for the 2,0-litre EcoBoost unit, bringing the engine’s total turbocharged engine used in A45,

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“Naturally, this new business will add significant value to the local supply chain while acting as another important milestone in TSAM’s growth as an exports’ hub at the base of Africa,” the TSAM spokesman says. In his address, Kirby said TSAM’s business was not just about manufacturing vehicles. “It’s about making ever-better vehicles and the only way we can accomplish this is by investing in the people who build our vehicles,” he said. According to Kirby, TSAM was the largest employer among the OEMs in South Africa with 8 500 team members, the figure including an additional 557 people who were employed as part of the new Hilux and Fortuner project. “This equates to half the workforce dedicated to producing just these two core models,” he said.

CLA45 and GLA45 models. And Porsche did not leave empty handed, clinching the 2,5-litre to 3,0-litre class for its new 3,0-litre six-cylinder turbo engine which drives the 911 Carrera. Dean Slavnich, chairman of the International Engine of the Year Awards, said: “It’s been another sublime year for powertrain development, with each category seeing an array of exceptional engines shortlisted. Huge congratulations to all the winners, especially to Ferrari for its phenomenal wins!”

JULY 2016 -

NEWS

Mazda MX5 Icon to debut at Goodwood

he all-new Mazda MX-5 Icon special edition will make its public debut next month at the Goodwood Festival of Speed in the UK. The model represents the first special edition fourth-generation MX-5, powered by a 1,5-litre SKYACTIV-G engine. According to a Mazda spokesman, the derivative’s production run will be limited to 600

units. Visually the Icon makes a bold statement with its Soul Red Metallic wing mirrors, rear spoiler and front skirt. The unique look is further boosted by 16-inch Gunmetal alloy wheels, while an improved equipment tally includes black leather seats, rear parking sensors, dusk-sensing lights and rain-sensing wipers. The Icon will join a host of other

MX-5 activities at the Festival of Speed. These include the European debut of the all-new Mazda MX-5 RF, plus the first appearance outside of North America for the MX-5 Speedster and Spyder concept cars. To mark the popularity of the world’s best-selling two-seater sports car, the one-millionth production MX-5 will also be on display.

BMW’s 3-Series production shifts to Mexico

exico will build the BMW brand’s best-selling model, the 3-Series sedan, from 2019, according to a statement released last month by the company. South Africa, which currently manufactures the model at its plant at Rosslyn, near Pretoria, will instead build the brand’s X3 SAV. The announcement was made at a ground breaking ceremony to commemorate the start of work on a new, $1-billion plant which BMW is establishing at San Luis Potosí in Mexico. The facility will have an annual production capacity of up to 150 000 units and will

12 - JULY 2016

create about 1 500 new jobs, according to a statement released by the company.

most resource-efficient production location worldwide,” says the statement.

“The decision to locate 3-Series production in San Luis Potosí was based on criteria such as the broad supplier network and qualified local workforce, as well as technical and social infrastructure,” the statement says.

Use of renewable energy sources aims to ensure that the facility is supplied with 100% CO2-free electricity, with most of the supply coming from a solar system within the plant’s grounds. Also, BMW appears confident that the facility will achieve the lowest water consumption per vehicle during the build process

The plant will comprise a body shop, paint shop and an assembly line characterised by an innovative production system and comprehensive sustainability standards. “From the first full year of production, the plant will be the BMW Group’s

“This will be the BMW Group’s first paint shop to produce zero waste water. All the water needed for the painting process will be reconditioned and recycled,” says the statement.

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O&M CAPE TOWN 90228/E

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Aircon Compressor 8E0-260-805-BJ R 13581,49 Aircon Expansion Valve 8E0-820-177 R 338,61

Engine Mounting 8E0-199-379-BG (Left) 8E0-199-382-AH (Right) R 1302,84 Gearbox Mounting 8E0-399-105-HB R 1268,34

CV Boot Kit 8E0-498-203 (Front Outer) R 250,69 8E0-498-203-C (Front Outer) R 353,95 4B0-498-201 (Front Inner) R 393,30

Anti Roll Bar-Front 8E0-411-309-P R 1466,49

Mirror Cap(s) 8E0-857-507-B -GRU R 743,17 8E0-857-508-B -GRU R 840,11

Window Regulator(s) 8E0-837-461-C 8E0-837-462-C R 1334,98

Gas Filled Bonnet Strut 8E0-823-359-A R 572,01

Alternator Pulley 06B-903-119-D R 1707,20 Vacuum Pipe 06B-133-751-AT R 1103,36 Radiator Fan(s) 8E0-959-455-K R 2804,63 8E0-959-455-N R 2656,64 Cylinder Head Cover Seal 06B-103-483-H R 341.84

Aircon Condenser 8E0-260-403-T R 5406,48

Wheel Bearing Kit 8E0-498-625-B R 1728,30

Coupling Rod 8E0-411-317 (Left) 8E0-411-318 (Right) R 667,12

Wheel Bearing Housing(s) 8E0-407-253-E R 2750,78 8E0-407-254-E R 2715,05

Front Wishbone Link 8E0-407-151-R (Lower Front) R 2621,06

Rubber Bush 8D0-407-515-C R 370,09

Suspension Guide 8E0-407-505-P (Upper Front Left) R 1233,27 8E0-407-506-P (Upper Front Right) 8E0-407-509-P (Upper Rear Left) 8E0-407-510-P (Upper Rear Right) R 1171,89 Suspension Guide 8E0-407-693-AL (Left Front) 8E0-407-694-AL (Right Front) R 3470,41

The parts offer pertain to the Audi A4 (2001â&#x20AC;&#x201C;2009). Part applicability dependent on chassis number. Prices valid from 13 Juneâ&#x20AC;&#x201C;9 September 2016. Prices are recommended retail exclusive of VAT, subject to change without notification and not binding to any party.

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JULY 2016

NEWS

VWSA plant achieves top world ranking

olkswagen Group South Africa’s (VWSA) plant in Uitenhage has been recognised as the top manufacturing plant in the global Volkswagen production network in 2015. VWSA achieved the highest index score of 113,2% amongst the 13 Volkswagen plants around the world, marking the first time that the Uitenhage facility has been rated as the top manufacturing plant since Beetle production was introduced there in August, 1951. The 13 global Volkswagen production plants are measured on similar key performance indicators such as production volumes, production quality,

cost per unit, units produced per employee, health and safety incidents and the factory’s improvements in reducing its carbon footprint. Key to VWSA’s achievement was the production of 120 000 Polos and Polo Vivos at better than budgeted cost levels. Another key contributing factor was exceeding the Think Blue Factory targets which were set in 2010 to reduce energy consumption, water usage, waste and emissions by 25%. At the end of 2015, VWSA had exceeded the target by 17,2%, achieving 42,2%. Of the 120 000 cars produced in 2015, over 66 000 Polos were exported to predominantly right hand drive markets

in the United Kingdom, Australia, Japan and Ireland. In addition, 113 000 engines were produced of which 81 000 units were exported to markets such as India, China and Mexico. In South Africa, Volkswagen maintained its dominance of the passenger car market for the sixth consecutive year with Polo Vivo and Polo being the first and second best-selling passenger car models respectively. “This recognition could not have come at a better time for our company,” said Thomas Schaefer, Chairman and Managing Director of Volkswagen Group South Africa. He added: “This exciting news will bolster our shareholders’ confidence in our company as we have commenced with our R4,5-billion investment plans for new products announced last year. It will further enhance VWSA’s status and ability to deliver and exceed its targets at the required quality levels for both the domestic and important export markets.”

GMSA goes landfill-free declared landfill free. The 37 000 square metre warehouse is the company’s 43rd non-manufacturing site to become landfill free and is the first of GM’s global facilities to be recognised this year.

Members of GM’s Parts and Distribution Centre who helped the company to meet its global environmental goals…

eneral Motors South Africa's Parts Distribution Centre – situated in the Coega Industrial Development Zone near Port Elizabeth – has recently been

14 - JULY 2016

The warehouse accommodates about 144 000 part numbers and dispatches parts and accessories to 113 dealers and 21 parts wholesalers across Southern Africa as well as 34 dealers in Sub-Saharan Africa. According to Ncedisa Mzuzu, Environmental Group Manager, Africa, the waste generated at the PDC mainly consists of paper and plastic packaging, metals, non-toxic fluids, wood and cardboard. By the end of May, the warehouse had managed

to recycle 99,42% of the waste, with just over half percent sent to an energy recovery facility. “GMSA’s environmental management system is certified to the ISO 14001:2004 standard. The environment is one of the company’s key business imperatives. The aim is to have all four sites in Port Elizabeth landfill free by 2020,” said Mzuzu. The Vehicle Conversion and Distribution Centre in Markman Township, from where vehicles are distributed to dealers, is currently undergoing validation. Similar validation processes are set to be undertaken at the company’s manufacturing facilities at Struandale and Kempston Road facilities.

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* TM

Making historyâ&#x20AC;Ś Vivian Mohohlo, dealer principal at Lexus Centurion

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MAY 2016 -

NEWS

TOYOTA GENUINE MEANS 16 - MAY 2016

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FEBRUARY 2016 -

FRANCHISING

Franchising in South Africa State of play in the auto sector Though socio-economic factors and tough trading conditions have influenced South Africa’s auto franchising sector, opportunities exist for brands to grow and thrive. Lynley Main reports

olumes have been written about the impact the volatile economic climate has had on businesses operating in South Africa – and this is no less true for the automotive industry or franchises within the sector. Conditions remain harsh and look set to become more restrictive and difficult, but that is not to say that there are no opportunities for pioneering franchisors and franchisees to grow and thrive. “Franchising is, without a doubt, under pressure as a result of economic conditions and now, more than ever, you need a franchise with a tried and trusted recipe to sustain your business,” says Gerhard Braun, franchise and technical director of Africa Automotive Aftermarket Solutions (AAAS) – one of Southern Africa’s most successful automotive franchises. The experts say that what the economic climate has done is put pressure on the consumer: rising interest rates, fluctuating exchange rates and everrising fuel, electricity and maintenance costs mean less disposable income – which ultimately leads to reduced sales in the market place. Further, less money equates to tighter competition within the industry as consumers search for the best deals. As a result of stiffer budgets, says Ethel Nyembe, Head of Small Enterprise and Franchising South Africa at Standard

18 - JULY 2016

Bank, franchisees have to deal with consumers opting to buy down – resulting in lower profitability – which in turn impacts on the franchisee’s overall turnover. Also, rising interest rates result in franchisees struggling to service their debts, leading to cash flow constraints. “The decrease in consumer income is of utmost concern for a franchise and, coupled with new franchise brands entering the industry, it exerts more pressure on established entities to perform,” Nyembe says. “Increases in the costs of sourcing and supplying products, combined with a weak exchange rate, also have a negative impact on the overall financial health of the franchisor’s and franchisee’s businesses.” Combined with increases in staff and rental costs, labour uncertainty and imposed water restrictions in some areas of the country, franchise concepts desperately need to adapt and evolve to remain sustainable, says Mark Rose, Head of New Business Development at Nedbank.

prepared and sound businesses,” he says. Despite the outlook, the Franchising Association of South Africa’s (FASA) annual industry research shows that, in all business sectors, franchising remains resilient, with growth achieved in the automotive sector. According to the latest Franchise Directory, the automotive product and services sector makes up 9% of South Africa’s total franchise market. The number of employees in the automotive market is estimated to be 10% of the total number of employees in the country’s franchise industry. Whether it’s with the franchisor, the landlord or suppliers, franchising in the auto arena has illustrated that it lends itself to collaborations as a good formula for

Simply put, franchise groups that have not pre-empted and prepared for the challenges ahead could suffer the consequences. “Notably, the remainder of 2016 will present more challenges for franchise owners – but it is also likely to present opportunities for adequately

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success. This is likely to be because franchising boasts a proven recipe – through a franchisor’s rules and policies – which is aimed at helping franchisees to succeed. “Franchises offer a standard service platform and level of quality that is consistent across the business footprint,” Braun maintains. “Potential for growth in the franchising industry therefore remains strong.” Despite challenges relating to skill levels of staff and managing costs,

franchisees appear optimistic about the sustainability of their businesses. Results of the most recent FASA survey reveal that 80% of franchisees are satisfied with their franchisors, 73% are satisfied with suppliers and 72% are satisfied with their landlords. Additionally, 72% have expressed optimism about the future – indicating that franchising in South Africa is alive and well. “There is no question, based on these franchisee survey results, that franchising is playing and can continue to play an even bigger role in growing South Africa’s economy, in nurturing entrepreneurship and small business and, above all, in creating jobs,” says Naas du Preez, group director for Oasis Water and chairman of FASA for 2016. He believes the potential for growth in the franchise sector is significant, provided the right partnerships can be put in place and that a spirit of entrepreneurship can be fostered. Du Preez adds that, in spite of security offered by a franchise brand, the success of the business relies on the franchisee’s thirst and ability to innovate – particularly in trying times. Keys to unlock potential include improved efficiencies and better customer service offerings. “By its very nature, franchising is entrepreneurial and forward-thinking.

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While socio-economic factors and tough trading conditions affect businesses, there are always those who do well in tough times and those who, by default, thrive on the back of challenging conditions. “Whether it’s automotive services that benefit from motorists repairing rather than replacing cars; the building, office and home service franchises that offer DIY options; or the business-to-business sector that takes care of outsourcing, franchising has the flexibility to adapt to changing times or re-invent itself to take advantage of new opportunities,” he maintains. Nyembe says that because motorists still need to service their vehicles, keep them running and replace tyres, whatever the state of the economy there are always numerous opportunities for automotive franchise brands to entice consumers to make use of their services – and even expand their operations. She says established franchisors, for instance, could look to acquire the services of existing independent automotive operators that provide similar offerings. Through incorporation, the franchise brand would be able to expand its presence at a minimal cost. “Smaller concept franchise models, providing express offerings, should also be considered. These smaller concepts result in a lower initial set-up cost for

JULY 2016

prospective franchisees and reduced operating costs,” she asserts. Nyembe cautions, however, that the continued challenging economic landscape means that, in order to weather financial storms, new franchisees will need to be extremely careful when selecting brands to represent, while existing franchisees will need to improve efficiencies and manage fixed costs – such as leases and staff costs – to remain profitable. According to Rose, noticeable trends emerging in the auto franchising sector include: • Brands moving towards smaller and less expensive express-store formats, eliminating previously wasted trading space; • Mainstream brands opting for multistore ownership; • A rise in the number of new brands entering the market, increasing the competitive nature of the industry. Further, he says the continued entry of international franchise brands to South Africa will inevitably change the local franchising landscape. “Consumers will be spoilt for choice in terms of variety and offerings as a result of these new entrants,” he says. In terms of Rose’s reckoning, the broader landscape will result in increased competition among established brands and will essentially create job opportunities as new entrants compete for a share of the consumer pie.

20 JULY 2016

Ultimately, however, both franchisors and franchisees will need to be innovative in the way they market and package their goods and services. Digital relevance and the use of the medium by franchises, coupled with a unique product offering, Nyembe says, will play a vital role in communicating the message. As such, she says opportunities are rife for franchise brands to become more aligned with the digital world. “Consumers are more tech savvy than ever and are constantly engaging with service providers which offer convenient and seamless service.” Rose concurs: “Technology in the franchise industry will become more important as a way of limiting costs, benefitting from economies of scale and driving efficiencies,” he says. “This is evidenced by the trends and lessons learnt from progressive economies such as those in the United States and Europe.” Du Preez adds that an essential ingredient in ensuring that a franchise thrives in a challenging market is teamwork. In line with this, he recommends that franchisors concentrate on fostering relationships with franchisees, focusing on the sustainability of the business and achieving the lowest possible fixed costs. “Team work remains the cornerstone of the franchise business – whether

it’s between the franchisor and the franchisee or between the franchisee and his or her team,” he says. Tips he offers include: • Don’t stagnate – innovate with new products that can add to the bottom line; • Simplify – get rid of clutter; • Leave no stone unturned in trying to improve operations; • Constantly examine procedures to find flaws or opportunities to improve; • Maintain strict stock control. According to Du Preez, brain storming with franchisees on ways to improve operations and cut costs can result in great idea-sharing and, in some cases, some brilliant solutions. “One of the biggest advantages of franchising is that you are in business for yourself but also not by yourself – whether you are the franchisee who looks to his franchisor for support or a franchisor that relies on his stakeholders to make sound decisions.” Consequently, he sees survival in tough times as a collective effort between all stakeholders. He advises franchisors and franchisees to meet more frequently with suppliers to close the loop, share constructive feedback on what is happening on the ground and share information between stakeholders – from suppliers to banks – to help to identify risk and opportunity.

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MAY 2016

FRANCHISING

Moving into Africa Though franchising in Africa remains relatively small, it offers significant potential and opportunities for businesses that are willing to understand the market nuances and cultures of countries in which they are considering investing

lobally, franchise brands are looking to expand their operations in emerging markets – and local franchisors, too, will continue to multiply in Africa, says Prithivan Pillay, National Manager of New Business Development at Nedbank. However, he warns franchises which are looking to invest in Africa to take into account the challenges of doing business away from home. “They need to remember that each country on the continent has a different culture and set of business ethics. No two markets are exactly the same which means that business strategies in one country may not work in another. “Research into the size of the market, its predicted growth, available skills and how to adapt promotional plans to appeal to different target markets is critical.” According to Pillay, companies need to aim for government buy-in and offer relevant products and services which meet the country’s needs and the region’s development goals. Key to the success of crossborder ventures are local partners who understand the nuances of conducting business in that country. However, perhaps most important of all is the need to invest in the country itself, rather than merely in the business, says Rosalind Kainyah, founder of Kina Advisory, speaking in a CNBC interview. She says the mistake many companies make is being singlemindedly focused on their own goals without factoring in domestic goals and aspirations, since it is this that informs buying behaviours and culture. For some years now the continent has been a key focus for retail and food industries due to the pace of development of many African countries. Pillay says that prior to entering a new market, franchise concepts need to invest heavily in research to ensure a high probability of success.

22 - JULY 2016

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“It’s important for franchisors to maintain control over new markets to ensure that their brands are not diluted due to poor performance, failure to secure local suppliers or disregard for franchise standards,” he says. Earlier this year Continental Tyre launched a new presence in Ghana as part of its growth strategy in Africa. The division, Continental Tire West Africa, is focusing on developing the local market and maximising its brand exposure across the region. According to Ian Langlands, head of marketing and sales for Sub Saharan Africa, Ghana was chosen as the hub since, in its favour from a South African perspective, is the fact that it is predominantly English speaking. “Ghana is rated as the easiest country to do business with in West Africa,” he says. “Not only does the country have great growth potential but it also acts as a central hub to neighbouring countries in West Africa.” Doing business in Ghana is nothing new to the group: Continental Tyre has an existing presence in the country through a longterm partnership with Rainbow Motors which has a warehouse and ContiPartner dealer in Accra, as well as a network of independent dealers across the country. The launch of the new entity was driven by the group’s African Dawn initiative, which recognises the growing economic importance of Africa on a global scale, says Shaun Uys, managing director of Continental Tyre Sub-Saharan Africa. As one of the world’s top four tyre manufacturers, he believes Continental has an important role to play in terms of developing the industry across the continent by expanding its footprint, increasing its range of products and delivering improved customer service and support. A dedicated team in Ghana is focusing on expanding the group’s distribution channels, number of retail outlets, and targeting new business opportunities in the fleet, rental, government, ports and mining sectors, he says.

Continental Tire West Africa, adds Johann COVER STORY Liebenberg, general sales manager for replacement passenger and light truck tyres, will enable the company to involve existing and new partners to grow their reach across the region, thus accessing a far broader market with top-quality products and fitment services. Setting up operations in Ghana has not all been smooth sailing, however. “The current economic situation in West Africa is very difficult due to the oil price collapse over the last two years,” admits Langlands. “The result is that building any new business in this region in this economic climate is tough.” Doing business in Africa, he says, requires a shift in mind set, patience and planning with a long term view of success. “Fast economic growth may not necessarily mean quick returns. It will take time, effort and plenty of resources to succeed in Sub Saharan countries outside of South Africa.” Franchises aiming to establish operations beyond South Africa’s borders face similar challenges as they would locally, says Kevin Slabbert, head of franchise for ContiTrade, which has established the successful BestDrive store concept in South Africa. “You need products that work, a franchise solution that offers value to the franchisor and the consumer, and most importantly, a franchisee that is motivated and willing to the support the franchise in its efforts to create appeal to the end consumer.” In most cases, he says, the franchisor has a responsibility to get the consumer to the franchisee, but after that, it is the responsibility of the franchisee to ensure that the customer enjoys a level of service that encourages return business as well as recommendations to friends and family. Be aware that there are challenges unique to cross border franchising, says Slabbert. “The franchise clothing may be heavily taxed in certain countries. Advertising campaigns that work well in South Africa may be impossible to implement in other countries.” However, he insists all of these unique challenges are relatively easy to overcome if a proper study has been done.

Map: Eric Gaba

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JULY 2016 -

FRANCHISING

Choosing the right partner Franchised workshop concepts are on the rise in South Africa, with more and more independent outlets looking for partners. Ewald Faulstich, director of the Automotive Aftermarket Division at Robert Bosch South Africa, explains why it’s important to choose the right associate

ewer industries are developing and changing as rapidly as the automotive aftermarket, according to Ewald Faulstich, director of the Automotive Aftermarket Division at Robert Bosch South Africa. Faulstich is certainly in a position to comment: in a career spanning over 20 years with the company, he has been based in Germany, Asia and South Africa. Bosch was established 123 years ago in Germany by Robert Bosch and, in that time, has produced some impressive statistics. If you do the maths, the company currently invests the equivalent of about R195-million a day on research and development in automotive division projects. There is no question that Bosch is a major player in the auto industry. Involved in the manufacture of automotive parts from spark plugs to diesel injection systems, the company also is the franchisor of a network of 14 000 Bosch Service workshops, making it the largest workshop network concept in the world, with 160 Bosch workshops operating in South Africa. The brand is associated with exceptional product quality – a concept introduced by Robert Bosch himself. Today Bosch Service workshops are aligned with highest technical competence and customer care management and efficiency at very competitive prices for all makes and models. All Bosch Service partners are given extensive support in terms of parts,

24 - JULY 2016

technology, training and expertise, as well as a standardised corporate image – all of which go towards maintaining the company’s reputation. Faulstich maintains that franchised aftermarket workshops like Bosch play in a highly competitive environment. “Original equipment manufacturers (OEMs) such as BMW and Toyota, amongst others, are seeing a drop in new vehicle sales, hence an increased focus on the workshop aspect of the business,” he explains. In addition, independent aftermarket workshops that are not franchised to any brand also offer competition. “We generally find that two thirds of vehicles on the road do not return to OEMs for their vehicle maintenance once the warranty or service plan has run its course, mainly due to cost,” Faulstich says. The trend provides a gap for franchised workshop concepts like Bosch Services to provide cost effective and technically proficient services. The franchised workshop concept is on the rise in South Africa, with more and more independent workshops looking for franchise partners. Faulstich holds that deciding on which franchise partner to choose should be based on input – involving factors such as payment and obligations to the franchisor – as well as output, which is really about rights, benefits, value added packages and the brand to choose and why. “Bosch and Bosch Service is a name that is known by most consumers and recognised as a credible partner,” he says.

The Bosch Service offering is available to three sectors of the vehicle market. Bosch Car Service offers bumper to bumper services for petrol and diesel passenger vehicles, as well as light and medium commercial vehicles. Bosch Car Service and Bosch Diesel Centres are able to provide highly specialised unit repair facilities for all diesel systems. Bosch’s Diesel Service is targeted at vehicle operators and commercial vehicles, providing a diesel workshop for diagnosis and repair of diesel systems, as well as specialised unit repair facilities. The market in South Africa is similar to that of Central Europe, with a time lag of five to six years, Faulstich maintains. “Because South African vehicles are not yet subject to emissions control and technical inspections, one generally sees vehicles of a greater age still on the road,” he says. This scenario is set to change in the not too distant future, with the effects of Government’s White Paper on emissions expected within the next three years. New legislation on emissions will see some of the country’s vehicles removed from the roads, which Faulstich believes to be a positive result in terms of safety. In Europe, vehicles are expected to undergo regular roadworthy and emissions testing, particularly if they are of a certain age. “South Africa’s workshops offer consumers high standards when it comes to technical competency, however we are lacking when it comes to customer service,” reports Faulstich. However, Bosch ensures that

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Secure the future of your workshop! Bosch - your optimal workshop concept partner

global standards are maintained and that consumers have a positive experience of the brand. This has been done via the implementation of a Genetic Code for the brand, to which all franchises are expected to adhere. The code consists of 14 components and covers areas such as technical competencies, diagnostics, customer service and corporate design. “This ensures that all workshops worldwide operate according to the same standards and philosophy, from the look and feel of the workshops to the correct way of handling the customers,” says Faulstich, who adds that the company provides support to its franchises to ensure that all elements are implemented to the highest level. Brand performance at Bosch is measured in terms of three areas. The corporate design of the workshop, the corporate competence – which relates to the standards of daily work – as well as products, quality and service; key areas when it comes to keeping up with the OEMs. The final area is corporate behaviour: “It means nothing to have top level mechanics when they do not know to treat customers,” Faulstich says. Bosch takes its genetic code seriously and, to this end, franchises are subjected to technical assessments such as quality audits and mystery shoppers. The outlet’s performance is measured from the

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Membership Fee discount for first 10 successful applications* Drive your business forward with Bosch through the automotive evolution and stay ahead of the pack. Bosch offers various workshop concept solutions meeting your individual needs. As a Bosch workshop concept partner you can offer your customer first class quality and you can profit from distinct advantages when partnering with Bosch: Internationally recognised brand Distinctive corporate identity Effective marketing and advertising program Customer retention programs Comprehensive technical support portfolio, including ESI[tronic], Bosch diagnostics, technical training, hotline and field support Quality automotive parts at competitive prices National Deal Partner support program Join the success of a strong brand in the workshop market, for more information, visit www.boschservice.co.za, or call Customer Careline 0861 267 247 *Terms and conditions apply

original point of contact, through to the handover of the vehicle, the service and the payment procedure. To date, Bosch Services franchises in South Africa have been rated as the best performer of the non-European countries and have taken second place worldwide. “There are four scores which franchises can achieve,” explains Faulstich. “Those who achieve the lowest ratings are expected to put processes for improvement in place immediately and, on the rare occasion that the situation cannot be resolved, we may part ways,” he adds. Bosch franchises are expected to uphold the high standards set by the brand. However, they are provided with a wide base of support with which to do so, from regional managers who provide education on how to implement the genetic code, to partnerships which promote business and advertising support.

The brand has established partnerships aimed at bringing in vehicles from businesses which own vehicle fleets. Loyalty programmes have been launched with organisations such as the AA, offering value-added propositions, and Bosch is currently putting together a package whereby consumers who currently utilise Bosch workshops can purchase a maintenance plan, thereby keeping the vehicles within the workshop base. In conclusion, Faulstich maintains that technical competence, quality, customer service and the brand are keys to the ongoing success of franchised aftermarket workshops. “These workshops provide fantastic business opportunities, however more should be done to assist independent workshop owners to make the right choice when it comes to a franchise partner. “After all, the biggest mistake one can make in this business is selecting the wrong partner,” he says.

JULY 2015 -

FRANCHISING

SA's pioneering player Supa Quick claims to have started the country’s tyre brand franchising revolution

ranchising changed the face of retail business in the late 20th century. Instead of business people having to build their operations from scratch, they could buy into an existing brand and enjoy all the benefits and reputation of that brand from day one. The owners of the brand could expand their footprint more easily by sharing costs with the franchisee, and the consumer could be assured of receiving consistent service and quality, no matter which store they went to. But despite this, franchising hadn't caught on in the motor industry, and in 1986, it was Supa Quick that changed the face of the tyre trade. “Firestone's then-CEO, Bill Taylor, was looking for a way to protect smaller tyre dealers from large, manufacturer-

26 JULY 2016

owned conglomerates that dominated the market,” says Bridgestone South Africa's Head of Sales and Marketing, Shaun Wustmann.

sold after 1989, giving new franchisees the opportunity to tap into the rapid growth of the South African auto industry in the 1990s.

“He conceived the idea of licensing some small dealerships to sell Firestone tyres, even though the stores weren't owned outright by Firestone.”

Now, as Supa Quick celebrates its 30th birthday year in 2016, Bill Taylor's original vision has been proven in practice – these days, most tyres in South Africa are sold through franchised outlets.

The Supa Quick concept was quick to take off, and with the success of the licensing programme, the chain was migrated to a fully-fledged franchising concept by 1989. Now, an entrepreneur who had never before owned a tyre outlet could buy into the business and benefit from the expertise of the group. Some of the stores were initially owned by Supa Quick itself, but these were

And, having pioneered the concept, Supa Quick remains the market leader, with over 240 stores across the country, the number expected to grow beyond 300 by 2020. “The success of the idea is shown by the commitment of our franchisees,” Wustmann says. “More than 80% of the original store owners from 1986 are still involved in Supa Quick.”

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JULY 2016

www.aaas.co.za

“The preferred Distributor, value-add provider and Franchisor to the Automotive Aftermarket” Aftermarket Solutions, in operation since 1954, trades in the replacement automotive parts industry, marketing and distributing quality automotive parts or components, DIY, DIFM (do-it-for-me) and leisure travel products. It distributes all leading OE (Original Equipment) brands as genuine replacement parts and also offers the customer (franchise owner) the option of guaranteed, quality brands. Aftermarket Solutions is 100% owned by Imperial Holdings Ltd. In the financial year ending 2014, the group generated turnover in excess of R 4 billion and employed more than 1 100 members of staff. The Aftermarket Solutions group has a number of sustainability initiatives underway, to not only drive awareness around, but also reduce the impact of its activities on the environment. Additionally, the organisation is committed to a number of socio-economic development programmes across South Africa.

“There’s more to Midas” Midas is a retail store designed around the needs of any vehicle owner focusing on various product ranges from parts and accessories through to lifestyle equipment. There are over 300 franchise outlets in Southern Africa. All our products carry a national warranty against manufacturer’s defects.

AUTO-ELECTRICAL SPECIALISTS

DIESEL FUEL INJECTION SPECIALISTS

www.adco.co.za

CLUTCH & BRAKE SPECIALISTS

28 - JULY 2016

“Put the spark back in your drive” Motolek is a unique workshop franchise for auto electrical specialists. There are 50 franchises countrywide, offering a network of professional technicians specialising in auto-electrical and related services ensuring guaranteed workmanship nationwide. The Motolek franchise of auto-electrical specialists continues to commit to the training and investment necessary to service the wide range of electronic fuel injection and engine management systems in the market.

“Trust our Diesel Specialists with your Vehicle” ADCO is a unique workshop franchise for diesel fuel injection specialists. The national footprint over 38 franchisees, offers a network of professional technicians specialising in diesel fuel injection and related services, ensuring guaranteed workmanship nationwide. ADCO outlets specialise in diesel pump sales and service, turbocharger sales, injector sales and service and diagnostics applicable to relative pump repair.

“Heavy Duty: Sales, Service & Fitment” CBS has been servicing the clutch and brake industry for more than 50 years. With experience in both the heavy and light vehicle market there is nobody better positioned to take care of your brake and clutch needs. There are over 20 stores in key locations country-wide ready to offer you professional service expected from a highly specialised workshop like CBS.

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UTO ARE &

IAGNOSTICS

www.acdworkshop.co.za

“The battery Change Experts” The Independent Battery outlets control 50% of the ‘Do it for me” battery market. The Battery Hub franchise is a specialist battery outlet that is equipped to take advantage of this opportunity in the DIFM battery market. The battery Hub franchise offer’s batteries’ in the passenger vehicle, heavy duty, marine, motorcycle and utility areas.

BATTERY EXPERTS

www.silvertonradiators.co.za

“A New Generation of Service” Auto Care & Diagnostics (ACD) is a national network of independently owned workshops specialising in vehicle service, maintenance and repairs plus providing the latest in automotive diagnostic solutions, thereby catering for the changing needs of vehicle owners. ACD facilities are conveniently located and differentiate from competitors by providing first class customer care. The franchise has a nationwide network of over 70 franchises and the ACD workshop group is contracted to major fleet and aftermarket warranty companies, as a preferred service provider in the field of vehicle maintenance.

“No matter what you drive, keep it cool” Service excellence – providing our customers with peace of mind since 1949. Silverton Radiators has been in the engine cooling business for more than 60 years and if there is anybody who understands engine cooling then it’s us. For fast, friendly and efficient service let the professionals help you. There are more than 100 Silverton Radiators dealers spread across Southern Africa so where-ever you are there is a Silverton Radiators dealer near you.

“The Competent partner within the Automotive Air-conditioning Industry” Behr Hella Service is a world renowned company supplying automotive air conditioning components and replacement parts as well as solutions to the aftermarket. Behr Hella Service has currently a national network of (approximately 40 Service Partners and expanding monthly) of automotive air conditioning service and repair centres with highly qualified trained technical staff conforming to industry standards. Distribution takes place through 9 warehouses located in the major centres which service a network throughout South Africa and its neighbours. As part of this organization Behr Hella Service is in a unique position to service the local aftermarket with the widest range of air conditioning related products which fully comply with international Original Equipment standards set by vehicle manufacturers.

CONTACT US: Franchise Head office 011 879 6000 No 2 Gordon Avenue, Meadowview Business Estate, Linbro Park 2090 www.automobil.co.za

JULY 2016 -

FRANCHISING

Car dealerships: distributorships or franchises? What’s the difference between a franchise agreement and a distributorship? And into which category do South Africa’s car vehicle dealerships fall?

he debate surrounding whether car dealerships are distributorships or franchises is a complex one, with a number of factors to take into account – not least of which was the confusion created by the new definition of franchise as introduced by the Consumer Protection Act in 2008. So, what are the major differences between distributorships and dealership franchises – and into which category do car dealerships in South Africa fall? Essentially, reports Business Magazine Inc, a distributor is an independent selling agent who has a contract to sell the products of a manufacturer. The distributor cannot represent him or herself as the manufacturer, but is able to display the producer’s trade name in signage and in the sales situation. Distributors pay wholesale prices for the product and then distribute to dealers who pay dealer price. Distributors and dealers are then basically participants in a supply channel, with distributors typically wholesalers selling to dealers and dealers then selling on directly to the public. Dealers and distributors are most commonly spoken of in terms of the sale of mechanical goods such as cars, trucks and construction vehicles, among others. Distributors ultimately maintain parts inventories, while

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dealers provide service functions to consumers. Franchising, on the other hand, is more of a long-term co-operative relationship between two entities: the franchisor and franchisee. The relationship is based on the agreement through which the franchisor provides the franchisee with a licence to do business in the name of the franchise. A franchisee runs his or her location of the business and is in charge of the strategic running of the business, but is bound by the franchise agreement in terms of the name and corporate identity of the business. Differentiating between distributorships and franchises Distributor and dealer relationships with manufacturers bear many similarities and have many features in common with franchises – with laws governing franchises (such as the Consumer Protection Act, for instance) even sometimes containing clauses that concern distributors and dealers. However, the franchise model is fundamentally different from the distributorship model in that traditional distributors do not pay an upfront licence fee to the manufacturer in order to be able to sell their goods. Perhaps the most notable difference between distributorships and franchise dealerships is that distributorships

tend to cover a larger territory than a dealership and may even extend to more than one location. A dealership tends to be local and is known to require less start-up capital – although the outlay is by no means small. A dealer can also focus his or her efforts on the management and success of one

www.automobil.co.za

Julian Pillay, reginal manager of the RMI in KwaZulu-Natal

(Original Equipment Manufacturers) and dealers for the sale of new motor vehicles and other allied services – even though the franchise agreements are highly restrictive in favour of the OEM – one sided.” Consumer Protection Act drives debate over definition While it was therefore widely recognised that motor vehicle sales through dealerships were considered franchises, the introduction of the Consumer Protection Act in 2008 threw the contention into question as the legislation created a new definition of franchise. The definition subsequently raised debate in the auto industry around whether the agreement between dealer and OEM was, in fact, a franchise agreement. In terms of the Act, McCraw explains, a franchise is seen to exist if consideration is paid for the right to carry on a business or if a franchisor exercises control over the other business in the form of look and feel, symbols and logo, among others, and if there is an agreement governing this relationship.

location. The dealer works closely with a distributor so it pays him or her to nurture that relationship as well. So what exactly then does all of this mean for car dealers in the South African context? “The South African National Automobile Dealers Association

www.automobil.co.za

(NADA) is of the view that the sale of new motor vehicles via dealerships is the oldest form of franchise in the world,” confirms Gary McCraw, Director of NADA and Company Secretary of the Retail Motor Industry Organisation. “This has effectively regulated the business relationship between OEMs

What caused debate was the fact that the drafting of the section in the Act was badly constructed with the result that even legal professionals could not agree as to whether the definition should be read conjunctively or disjunctively. In legal terminology, ‘and’ typically illustrates the conjunctive and ‘or’ indicates the disjunctive – the

JULY 2016 -

FRANCHISING

definition in the Act contains both so is open to interpretation. “One of our NADA retail groups obtained senior counsel opinion on the matter and it was confirmed that the requirements are disjunctive – at least in the opinion of their advocate,” says McCraw. “Based on this, the advocate was of the view that a new car dealership bearing the marks of the OEM, the vehicles of the OEM and under the control of the OEM in terms of look and feel, and corporate identity, categorically meant that a new car dealer was a franchisee no matter what the agreement calls itself.” The ruling, as such, led NADA to conclude that distributorships in the retail context no longer exist in South Africa: a distribution agreement, according to McCraw, may in fact sit at a level higher than a dealer but no longer at dealer level unless the OEM exerts no control over the dealer. There is certain to be dissent over the organisation’s interpretation, but he admits that resolution can only truly be reached by a competent court’s ruling on the structure of the definition. Running dealer networks as efficient models For Volkswagen South Africa though, points out dealer network planning manager Gregg Hiscock, the network is viewed neither as a franchise or

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a distributorship. “The Volkswagen Dealer Network consists of 106 dealers who are governed in terms of a Dealer Agreement between Volkswagen of South Africa and independent entities,” he says. “Our network does not comprise of franchises or distributorships, but rather independent entities entitled to sell and service our contractual products and services in terms of the Dealer Agreement.” Toyota South Africa, too, is guided by a dealer agreement that outlines the rights and responsibilities of the seller and dealers entitled to re-sell Toyota products and services. However, Toyota South Africa’s network is recognised as being run along franchise lines as the relationships between the brand and dealers are guided by the corporate identity of the broader Toyota brand. “At Toyota, we operate as one team with our dealers,” Calvyn Hamman, Senior Vice President Sales and Marketing at Toyota South Africa Motors, said in a release when Toyota won first place at the 2015 NADA Dealer Satisfaction Index Awards. “Our dealers form an integral part of the organisation and are considered important brand ambassadors with first hand contact to our customers.

We acknowledge that if they have our 100% support, they will be more equipped to support our customers.” Popular global auto brands such as BMW, Mercedes-Benz and Nissan are also run in the same manner, with car dealers guided overall by the quality that consumers have come to trust and expect from products and services that bear the stamp of that particular brand. Franchises have proven to be a successful model as a result of the standardised service and value offering across the footprint, as well as the strict rules and policies in place that make franchises more likely to succeed. However, warns McCraw, there are areas for dealers to look out for when considering entering a dealer network or becoming a franchisee. “When a prospective dealer wishes to enter into a franchise agreement, one of the key areas he or she needs to cover is security of tenure, given the huge investment that is required in terms of facilities, equipment and trading stock,” he advises. “NADA has for many years, via the various dealer council structures, attempted to get OEMs to review their agreements to ensure that they are fair and evenly balanced from both parties’ point of view. It is critical there is mutual trust and respect between franchisors and franchisees and that should be reflected in the business relationship and agreements,” McCraw concludes.

www.automobil.co.za

Secure the future of your workshop! Bosch - your optimal workshop concept partner

Drive your business forward with Bosch through the automotive evolution and stay ahead of the pack. Bosch offers various workshop concept solutions meeting your individual needs. As a Bosch workshop concept partner you can offer your customer first-class quality and you can profit from distinct advantages when partnering with Bosch:         

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Share the success of a strong brand in the workshop market, for more information, visit www.boschservice.co.za, or call Customer Careline 0861-267-247 *Terms and conditions apply

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MAY 2016 -

FRANCHISING

Getting ahead Becoming a member of a recognised automotive franchise is a good move in terms of branding, marketing, buying power and support, says television and radio personality Adam Ford, owner of an e-Car franchise. Samantha du Chenne reports

sk Adam Ford how and why he got into the motor industry and the answer is simple – “boys like cars,” he laughs. Ford’s passion for cars, which began in boyhood, has culminated in a 30-year career in the industry. Not only does he own an e-Car franchise – Gauteng based A&K Motors – he has also become a wellknown television and radio personality, broadcasting motoring shows on both mediums. Ford’ s radio career began when one of his customers, who happened to host a radio show, asked if he would be prepared to take questions on-air about dealing with motor vehicle problems – how to repair them and where to take cars for the best repairs. “That was 15 years ago,” Ford recalls, adding that the insert proved exceptionally popular with listeners, who repeatedly phoned in wanting to ask him questions once the first show had aired, and so they brought him back. This was the story of how Ford’s popular show, A Word on Cars on Talk 702 with fellow presenter, Leigh Benny, was launched. The show subsequently aired for the next 10 years. Following that success, Ford was asked to present the same type of show for a television audience on SABC – the motoring magazine show, Car Quest. Ford currently presents Motoring in the Mix for Mix 93.8FM, as well as

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Buyers Guide on Ignition TV with Sagie Moodley. “Essentially, Buyers Guide is a show around providing financial advice to viewers on the best vehicles they can buy to fit their budgets,” Ford explains.

repairing the problem will become costly. We encourage customers to take the correct route from the start.”

He reveals that he really enjoys working in talk radio. “The radio show gives me an opportunity to advise people not only on how to resolve the problems they’re having with their vehicles, but also to educate them about the industry and help them to understand the way it works.

For Ford, being a member of the e-Car franchise has a number of advantages. He points out that being part of a larger group of service centres means greater buying power and better prices on components, savings which he is ultimately able to pass onto his customers. All components come with a warranty and, as e-Car is a national brand, customers enjoy the benefit of back up and support no matter where they are in South Africa.

“It’s a way that I can give back by protecting people and preventing them from being enticed by cheap repairs that later become costly mistakes – especially in the current economic climate,” he explains.

“As any independent workshop owner will tell you, there’s all too often neither the time nor the budget to take on the necessary marketing activities that will advertise your business to the right market,” says Ford.

As the operator of his own workshop, Ford admits that 2016 has seen consumers battling with constrained budgets. “We try to provide our customers with a value option – a proper repair at a reasonable price. For example, we will source generic parts and components – which incidentally are often manufactured in the same factories as their branded counterparts – that are more affordable.

However, he says that as part of a larger franchise network, marketing and advertising are handled for you. The same is true of training. E-Car’s training programmes are linked to Bosch and employees are sent for training around all aspects of the business. Customers reap the benefits of loyalty programmes such as the e-Car club, which allows them to become members of the AA free of charge.

“The key is to avoid seeking out a cheaper service that will ultimately create problems in the long run, when parts are not under warrantee and

Ford is realistic about the challenges South Africa’s motor industry is facing. He believes the greatest challenge is around finding technically competent

www.automobil.co.za

staff and, once employing them, keeping them abreast of the rapid changes that technology brings to the industry. He adds that while training is a must, mechanics cannot spend all of their time out of the workshop attending classes. But the pace of change happens so quickly in the industry that it’s hard to keep up and, as cars become more technologically advanced in terms of their design and inner workings, it’s a challenge for workshops performing multi-brand services to get to grips with technology that is often designed and developed in another country. “In these cases, it’s as though we are the general practitioners of the motor industry and we have to refer to the vehicle to a specialist,” Ford explains. Customers, he says, need to be better educated about vehicle maintenance and the importance of looking after their vehicles properly. “It’s up to the workshop to communicate why the vehicle is going to be costly to fix and what the problems are. “Members of workshop staff are in an awkward position: car maintenance is seen a grudge purchase and there’s a perception that mechanics are out there to take your money and run.

Contact Wilfried Langenbach for more info Ford’s advice to aspiring workshop owners looking to partner with a franchise? “Becoming a member of a recognised franchise in the industry is a good move in terms of branding, marketing, buying power and support.

086 000 3227 Customers have little understanding of the complexities and costs of staff and components – a perception which we need to work hard to amend.”

www.e-car.co.za www.automobil.co.za

“That said, you cannot expect the work to pour in simply because you have joined a franchise. This is an industry in which hard work and looking after your customers is the only way you’ll get ahead,” he insists.

2016 - 35 Accredited JULY Workshops

INSIDE LINE

Of deficits and surpluses

Whichever formula you use to determine whether South Africa’s trade in the automotive sector is profitable, the export of vehicles – which has increased by 91% in five years – is definitely to the country’s benefit. David Furlonger reports

hat do Kyrgyzstan, Mayotte, Yemen, New Caledonia, Vietnam, St Helena, French Guiana, Guadeloupe and Djibouti have in common? Their motorists drive South African made vehicles. The countries are among a group of 140 identified by the Automotive Industry Export Council (AIEC) as destinations for South Africa’s cars, bakkies and components. Also included are the United States, Britain, China, Germany, France and Australia. Actually, the full list of destinations numbers more than the 140 cited. Ford Southern Africa alone claims no fewer than 148 export destinations for its Ranger bakkie, but the 2016 edition of the AIEC-produced SA Automotive Export Manual – from which the information is drawn – names only those countries which

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receive at least R1-million worth of South Africa’s goods. As this year’s miserable monthly new-vehicle sales figures from the National Association of Automobile Manufacturers of SA (NAAMSA) have shown, the local motor industry needs all the exports it can get.

result, local vehicle production is also expected to reach an all-time high, rising above last year’s total of 615 658 units.

With local sales forecast to drop by 12% or more for 2016 as a whole – the third successive year of decline – exports are almost the only ray of hope for the country’s motor industry.

The Export Manual makes encouraging reading at a time of otherwise depressing economic news. In 2015, the value of vehicle and components exports breached R150-billion for the first time, hitting R151,5-billion. Remarkably, this is a 91% increase within a five-year period – up from R79,3-billion in 2010.

By the end of May, vehicle exports were fractionally down on the same period in 2015 but with Toyota getting back to full production after the introduction of its new Hilux, NAAMSA remains confident industry vehicle export volumes will set a new record in 2016, beating last year’s total of 333 802 units. As a

So dramatic has been the improvement that the AIEC has been tempted to suggest that, for the first time in history, the motor industry’s trade balance is in surplus. A table in the Export Manual shows that imports last year totalled R146,2-billion. Set against the R151,5-billion of exports, that’s a R5,3-billion surplus.

www.automobil.co.za

INSIDE LINE

The picture is less rosy elsewhere. In 2015, the country was the junior partner with the European Union by R11,8-billion, following exports worth R67,1-billion against imports totaling R78,9-billion. With Europe a major supplier of spare parts, the “adjusted” trade imbalance is likely to be considerably more. South Africa’s biggest single trade partner in 2015 was Germany – home to BMW, Volkswagen, Audi, MercedesBenz and Opel. Total automotive trade between the two countries notched an impressive R100,2-billion but, of that amount, R65,2-billion – almost two thirds of the total – accounted for imports.

But it’s a misleading figure, applying only to trade conducted by motor companies under the 20132020 Automotive Production and Development Programme (APDP).

The challenge, as always, is to ship more components. In 2015, depending on which table you prefer, the components trade deficit was either R85,5-billion or R34-billion.

It excludes R50,5-billion of aftermarket spare parts brought into the country by imported car brands and local producers.

South Africa’s trade relationship with regional international trade zones is not entirely clear because figures contained in the annual are APDP-specific and exclude aftermarket imports.

Since many people argue that aftermarket parts are a legitimate part of automotive trade, the annual also publishes a second table including them. In this, the R5,3-billion surplus turns into a R45,2-billion deficit. Whichever formula you use, trade in vehicles is definitely in South Africa’s favour. Last year the country exported R101,9-billion of cars and commercial vehicles, and imported R61,6-billion, for a R40,3-billion surplus.

www.automobil.co.za

Predictably, however, they show a big advantage for the country in terms of trade with the rest of Africa: R34,1-billion worth of exports, R500-million worth of imports and a R33,6-billion surplus. South Africa is also in credit with the United States. Last year it exported R22,8-billion worth of automotive goods and imported R7,7-billion for a R15,1-billion surplus.

Our relationship with other automotive trading partners in the Top 10 is equally imbalanced. In R29,9-billion worth of trade with Japan, we contributed goods to the value of R7,8-billion and, with Thailand, R1,6-billion out of R15,4-billion. Similarly, with China we managed R208-million out of R12,8billion; with South Korea R566-million out of R7,7-billion and, with India, R1,4-billion out of R12,2-billion. We fared a little better in our trade with the UK, contributing R7,4-billion out of R15,4-billion, while, on the bright side, we sent R13,1-billion worth of goods to Belgium in a total trade partnership valued at R14,1-billion. For all of South Africa’s strides forward as an exporter of automotive goods, the country still has a long way to go.

David Furlonger is the industrial editor of Business Day and Financial Mail

JULY 2016 -

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www.automobil.co.za

NAACAM

show dates announced

NAACAM President Dave Coffey

he National Association of Automotive Components and Allied Manufacturers of South Africa (NAACAM) is pleased to announce that the inaugural NAACAM Show will take place at the ICC Durban from April 5-7 2017. The show will be hosted every two years as a platform from which to grow the automotive component and related manufacturing sectors in South Africa, and will run concurrently and in partnership with the Durban Automotive Cluster’s National Localisation Indaba, NAACAM President Dave Coffey said. Coffey said a unified effort was required from all South Africa's automotive stakeholders, including government, to respond to the

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challenges facing South Africa's manufacturers. These include increased market access, higher local content and export readiness, which must be underpinned by appropriate enabling legislation and the supply chain's efforts at continuous improvement and maintaining international certified standards, he said. "In the context of weak local new vehicle sales, an increase in the range and volumes of local manufactured components is essential to the survival and growth of component manufacturing companies in South Africa and the NAACAM Show has a big vision in driving this objective," Coffey said.

The overall objectives of the NAACAM Show are to deliver a premier event that: • Showcases the capability of the South African automotive industry and in particular the component sector; • Incorporates a conference and panel discussions with world class speakers; • Is fully endorsed by the dti and aligned with the support that the DTI affords the automotive industry; • Is hosted every two years and receives the full support of all stakeholders in and related to the automotive industry and its supply chain; • Promotes further localisation of components through the stream at both the OEM and Tier 1, 2 and 3 suppliers;

JULY 2016

• Links potential Tier 2/3 to Tier 1 suppliers; • Provides networking opportunities for suppliers of capital equipment, logistics and other services to network with component manufacturers • Attracts multinational component suppliers to participate; • Facilitates the transfer of technology to local suppliers; • Has a focus on linking and developing B-BBEE suppliers in the automotive supply chain, and • Attracts Global OEM Purchasing Managers to attend and participate. Coffey confirmed that following an open tender process Inkanyezi Events would, under the guidance of NAACAM's Steering Committee, manage the NAACAM Show, which would include an exhibition, workshops and networking functions. "We are confident in the experience of Inkanyezi to deliver NAACAM's vision

40 -- MAY JULY 2016 2016

of the NAACAM Show as a powerful platform for trade, investment and meaningful engagement between suppliers and buyers," Coffey said. Coffey said the NAACAM Show would be closely aligned with the objectives of the Automotive Supply Chain Competitiveness Initiative (ASCCI) and the Department of Trade and Industry to grow local value added, exports, employment and GDP.

The NAACAM Show was open to all stakeholders in the automotive value chain, including non-NAACAM members. He added that the local vehicle manufacturers, through NAAMSA, had endorsed their support for this important event. For enquiries around partnership opportunities please contact Inkanyezi at: 0861 101475, or email andrew@inkanyezi.co.za

www.automobil.co.za

O&M CAPE TOWN 90221/E

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Lock Carrier 5K0-805-588-E R 4 522.50

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Nobody knows Volkswagen like Volkswagen. Golf 6 drivers expect the kind of smooth and powerful ride that can only be achieved when every part works flawlessly with every other part in their car. Volkswagen Genuine Parts are each created alongside vehicle development according to stringent quality standards for optimum performance and impeccable safety. This means that all Golf 6 parts are made in parallel to the manufacture of your Customer’s Golf 6 to enable shorter repair times and prevent premature wear and tear. Offer Volkswagen Genuine Parts when your Customer’s Golf 6 needs replacements.

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*Prices are recommended retail exclusive of VAT, subject to change without notification and not binding to any party. The Parts on offer pertain to the Golf 6 GTI (2009–2013). JULY 2016 Part applicability to model is dependent on chassis/VIN number. For further information, please consult your nearest participating Dealership. Prices valid from 13 June–9 September 2016. While stocks last.

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JULY 2016

SAMBRA adds value Whether for its members, consumers or the motor body repair industry, SAMBRA is driven to add value and stay on top of its game in every aspect of its business and service delivery

t has been a busy year for SAMBRA’s National Director Eddie Martin and his team. From industry negotiations to member management to landmark OEM SAMBRA’s National programmes – Director Eddie Martin and everything in between – South Africa’s largest motor body repair association continues to go from strength to strength.

Martin. “That’s why we measure ourselves and our actions on a daily basis against our three pillars of excellence – consumer, business and performance.

“I believe the greatest threat to any business – especially one that has been around for as long as SAMBRA – is complacency,” says

He points out that in a world in which instant gratification is perceived to be advantageous SAMBRA adopts a more

“While there is significant competition in the industry, instead of being threatened by it SAMBRA views it as an exciting challenge to always stay at the top of the game.” Martin and his team place great value in maintaining an open and transparent relationship with all of SAMBRA’s members and stakeholders. He says: “We firmly believe that good relationships are the keys to sustainability.”

prudent approach to business. The association interacts with the industry on a number of levels, and plays a major role in securing a trading environment to secure financial viability for members, and fair trading conditions for strategic business partners. “We don’t believe in quick fixes. Building relationships take time, as do negotiations and rolling out effective projects. Anyone can achieve quick success. But sustainable success… that requires long hours, nurtured relationships and teamwork,” Martin maintains. STABLE, GROWING MEMBER BASE SAMBRA’s membership has stabilised and shows continued and steady growth. Motor body repairers who would like to enquire about SAMBRA membership and the benefits that go with it, may visit http://sambra.biz/become-member/. GET SOCIAL Follow SAMBRA on its three major social media platforms for updated consumer and industry news. Facebook: www.facebook.com/officialsambra Twitter: www.twitter.com/SAMBRAnews LinkedIn: www.linkedin.com/company/sambra

Having tea with the Queen

ot many of us get the chance to rub shoulders with a celebrity, and the chance of meeting royalty is even slimmer. But SAMBRA member Charles Canning did just that when he represented South Africa as part of the Cape Town Highlanders Drums and Pipes which performed at HMQ90 (Her Majesty the Queen’s 90th Birthday Pageant).

44 JULY 2016

The pageant took place in the grounds of Windsor Castle and, in addition to meeting the Queen not once, but TWICE – including having tea with her – Charles also performed in front of nearly 10 000 people, as a solo piper, right outside the castle’s main entrance. He performed alongside Kylie Minogue, Shirley Bassey, James Blunt and Jess Glynne.

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RMI ASSOCIATION

Annual Insurer Survey extended to OEMs and suppliers

Heidi Dias, Head of Claims at Mutual & Federal, with RMI President Jeánne Esterhuizen at last year's National Insurer Survey awards

hile SAMBRA aims to constantly create value for its members, it also places great emphasis on developing a sustainable industry for all role players. The SAMBRA National Insurer Survey, conducted by Lightstone Consumer,

has become a respected measure of the country’s insurers and their relationship with the MBR industry, with the ultimate Insurer of the Year award being a hotly contested affair. The objectives of the annual study are to measure and track: • Service satisfaction; • Service delivery; • Key strengths and weaknesses with respect to service delivery; • Key service performance over time.

feedback concerning interactions with OEMs and suppliers. “The value derived from the survey with insurers prompted us to expand it to OEMs and suppliers in the hopes of achieving similar results.

“In our experience, the results of the survey are embraced by insurers and constructively applied,” adds Martin.

The 2016 survey has closed, and the results are currently being analysed and calculated by Lightstone Consumer Insurers, OEMs and suppliers will be recognised and awarded at a gala breakfast next month.

This year SAMBRA has expanded the project to include MBR industry

“This speaks to our strategic objective to unify all stakeholders in the MBR Industry to the ultimate benefit of the motoring consumer.”

B-BBEE: the buzz word in the industry

-BBEE is a serious buzz word in the industry, more so than ever before. As all of the elements of South Africa’s development policy come together, there is increasing pressure to ensure full understanding, interpretation and strategy modifications to accommodate changes in legislation. In order to ensure that interpretation and the intent of new B-BBEE Codes are understood – and that the RMI is in the best possible position to guide its members on the way forward – the Organisation is engaging the Department of Trade and Industry (DTI) on behalf of members regarding formulations within certain elements of the Codes that are problematic and where interpretation issues exist. SAMBRA recognises the important role that they play in facilitating the communication of B-BBEE transformation

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credentials to their members, and aim to play an active role in the national agenda for development and growth. Since there are different interpretations of how to apply the B-BBEE Revised Codes of Good Practice, SAMBRA has engaged experts in the field of Enterprise & Supplier Development in order to ensure that we interpret the new Codes correctly, advise our members accordingly and safeguard compliance over the long-term. During the course of the process, SAMBRA has looked to achieve multiple objectives, including: • Enhanced industry compliance and a transformation strategy for the association; • Building the capacity of each member to manage his or her own HR and Transformation related performance as a function of BEE compliance; • A commercial model that facilitates

transformation in a way that adds to the profitability and operational excellence of SAMBRA members. • The opportunity to improve the value proposition of SAMBRA to its members by facilitating industry programmes including, but not limited to: o Enterprise and Supplier Development; o Increased Local Content; o Socio-Economic Development; o Waste and Energy Management to reduce the risk of reliance on the grid; o Capacity building programmes to provide certainty in the access to skills for the industry and the positive impact of job creation. SAMBRA is currently in the process of appointing a service provider that will help us develop a transformation plan to benefit our members. This will be a multiphase process, and more details around this will be communicated to members in due course.

JULY 2016

RMI ASSOCIATION

Appointments and initiatives New regional representative for the Western Cape SAMBRA boasts an extended team of extremely capable and experienced regional representatives. The association’s newest employee, Randall Langenhoven (above) has been appointed the new SAMBRA Western Cape regional representative. He brings with him a wealth of industry experience and is already known to many Western Cape members. Randall boasts over 37 years’ industry experience and training proficiency in insurance, negotiation and more, and is sure to be an asset to SAMBRA and its members. Training SAMBRA believes that long-term success can be achieved only through

SAMBRA has been involved in developing a curriculum for paintless dent removal

constant learning. To this end, members across the country have access to information sessions and training sessions to educate them on the latest business requirements and developments, including: Occupational Health & Safety (OHS); Rand Mutual Assurance (RMA); the merSETA; Audatex (Abuntex); BASF workflow seminars and MIBCO. The association has also recently embarked on a

survey to establish members’ unique training requirements. This project is currently underway. Paintless Dent Removal Curriculum SAMBRA has been involved in developing a curriculum for paintless dent removal. The qualification was put together in record time and the necessary documentation and forms have been completed and submitted for approval.

The importance of participating in the VDQ survey

he Vehicle Damage Quantifier Occupational Qualification (Accident Claims Officer, OFO Code 331505) was approved QCTO and recommended to SAQA for public comment. This has been published in the Government Gazette and is now undergoing a public comment process.

SAQA that will regulate the Vehicle Damage Quantifier qualifications. If you want to function in the future as an assessor, estimator and/or function in a position with a direct influence on the repair estimate of a motor vehicle, you need to be a professional member of the VDQGBSA.

Meanwhile, SAMBRA members – assessors and estimators, as well as owners and staff who prepare quotes – are once again reminded to register and participate in the Vehicle Damage Quantifier Governance Body South Africa (VDQGBSA) survey.

The qualification had been registered with QCTO and will consist out of a combination of theoretical learning, practical training and workplace experience. This will cover “assessor light and commercial vehicle”, “estimating light and commercial vehicle” and any other relevant positions.

The VDQGBSA is a non-profit company, registered as a professional body with

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All assessors, estimators and people in

positions that have a direct influence on the repair estimate of a vehicle need to log their details at http://goo.gl/a7YZHa and register with VDQGBSA as soon as they receive notification from the professional body. If you have no experience you can do the qualification through a training institute. If you are currently an assessor, estimator or in a position with direct influence on the repair estimate of a vehicle you can, under certain conditions, participate in the Recognition of Prior Learning (RPL) programme. Exemption criteria will form part of the RPL policy for all assessors or estimators who are currently practising.

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Raising consumer awareness repair consumers – both in the traditional and digital media conversation space. These efforts have been cemented by the distribution of 10 000 SAMBRA-branded license disk stickers to licencing centres and testing stations across South Africa, with another print run currently in production.

AMBRA has worked hard to become a trusted content resource to existing and potential members, as well as to motor body

Distribution coincided with the launch of www.AccidentSOS. co.za, a comprehensive accident guide that places advice, emergency numbers and more at a consumer’s fingertips.

Industry News Curator Content curation in the MBR space is an important part of ensuring that

SAMBRA members remain at the forefront of local and international trends, opinions and forecasts, while also playing a vital part in members’ personal and business growth. Value-added content is vital, not only from a consumer perspective but also to boost a website’s search engine positioning. SAMBRA’s website, www.sambra. biz, has grown from strength to strength in this regard, showing 77% user growth and an 83% increase in page views over the past 12 months. Further, the site enjoys consistent search engine ranking improvements. Supporting this, members, consumers and industry partners also receive a weekly newsletter with news snippets specifically tailored to their needs.

SAMBRA grading catches the OEM eye

AMBRA’s Grading Criteria for motor body repairers has been the basis upon which an industry standard has been developed and accepted by insurers and the MBR fraternity as a whole. In a landmark agreement with Mazda SA, SAMBRA accredited members received the unique opportunity to apply to become Mazda Recommended Repairers. This

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industry-changing approach will afford more members access to the programme, while giving consumers the opportunity to use a recommended repairer of their choice. Since the programme was launched, 180 members have received Mazda Recommended Repairer status, and more members continue to apply. The industry-changing approach will afford

more members access to the programme, while giving consumers the opportunity to use a recommended repairer of their choosing. This represents a significant leap forward for the association, and further cements its reputation as a MBR industry influencer while it continues to raise the bar for quality workmanship.

JULY 2016

RMI UPDATE

merSETA joins forces on ROI tool an apprentice can return an employer’s investment within 12 to 18 months and triple it in paid work by the end of a three-year apprenticeship. Tens of thousands of South African business are expected to benefit from the initiative. The development of the tool locally is being run by the merSETA, the Retail Motor Industry Organisation (RMI) and the UK-based Institute of the Motor Industry (IMI).

Dr Raymond Patel, CEO of merSETA: “The calculator we are building with the IMI and RMI will help us to unlock the door of opportunity for automotive businesses and workers…”

he Manufacturing and Engineering Seta (merSETA) has joined forces with two major players in South Africa’s automotive industry to drive the uptake of apprenticeships among smaller companies. The initiative is exploring a South African-version of a British online tool, The Apprentice Return on Investment Calculator. The calculator shows British businesses, at the click of a button, how

Africa. “The skilled labour market is tight. Work ready skills are scarce and expensive, and the only sustainable way for a business to grow is to develop skills in-house. Upskilling staff and recruiting and training apprentices is the best way to do this,” says Dr Paul Spear of the IMI. He adds: “Most employers understand the need for training but they all want to know how much it will cost and how long till they make a profit. This tool will supply the answers.”

“We want the IMI to work its magic for South African businesses. IMI will develop a similar online tool to the one in the UK for any automotive company engaged in after sales service and repair in South Africa,” says the CEO of merSETA, Dr Raymond Patel. The RMI will partner with the IMI in facilitating the groundwork and roll out the tool when it is complete. RMI member companies will take part in the development of the project. It will begin with companies engaged in motor mechanics and later be extended to spray painters and body repairers. The Government has identified skill shortages as the main obstacle in the drive for economic growth in South

Shopping at the forecourt Convenience store and fuel retailing industry leaders from around the world recently met in South Africa to explore the market and discuss industry challenges and opportunities at the National Association of Convenience Stores (NACS) Global Forum. Nat Keller, the organisation’s director of marketing, reports

outh Africa is one of the most diverse and vibrant countries in the world and, as attendees of the 2016 NACS Global Forum quickly discovered, that diversity and vibrancy also aptly describes the country’s convenience and fuel retailing industry as well. Convenience store and fuel retailers from around the world along with NACS

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Global Supplier Council members met recently in Johannesburg and Cape Town at the association’s Global Forum. Featuring local store tours, interactive discussions, inspiring presentations and plenty of networking, attendees had an action-packed agenda to engage, learn and explore a new and emerging convenience market. The programme began with an assortment of store tours in Johannesburg, South Africa’s biggest city, which included visits to FreshStop, Engen, Food Lovers Market, Woolworths and Checkers. Consistency and fresh food were themes throughout. Attendees also enjoyed an inspiring presentation from Bonang Mohale, chairman of Shell South Africa, who provided insight into global societal and political issues. He noted the resiliency of South Africa’s people, announcing: “This, too, shall pass,” in reference to current economic and political struggles in the country. Dave Hogg, director at FreshStop, shared a case study of his rapidly growing company. With 220 stores spanning South Africa, FreshStop has fostered strong partnerships and is focused on consistency, fresh food and customer service. The company plans to continue its growth trajectory by expanding deeper into Africa in coming years. In Cape Town, the Global Forum programme continued with JP Landman, a political and trend analyst delivering a lively overview of the South African political, societal and economic market. “The South African market is unique, yet the challenges faced by retailers are typical of those in every market around the world,” he observed. With a focus on foodservice, Darren Tristano, president of Technomic Inc, cited examples of leading convenience retailers and encouraged attendees to “tell your food story” and “create

an emotional connection with your customer through food service.” Tristano noted there had been increased consumer demand for better quality foods, specialised foods and healthier foods—all areas in which retailers can capitalise. Adam Brumberg, deputy director of the Cornell Food and Brands Lab at Cornell University, discussed how retailers can better position themselves by understanding the psychology behind consumer food purchasing decisions and using innovative, low-cost techniques. “If folks walk into your store and don’t see healthy items, they won’t buy them,” Brumberg stated as he encouraged retailers to make healthy items noticeably available. “Your job is to change people’s perception of what a convenience store is,” Brumberg said, “and you can change that perception of what is available through your display.”

exploring new and different retail options. • Andreas Nagel, global convenience retail business and alliance development with Shell International Petroleum Company Limited, shared how Shell chooses partner brands based on shopper missions. Attendees also heard about alternative franchise models with several themes emanating throughout the discussion: The importance of finding the right franchisee; creating incentives for franchisees and lowering the franchise cost of entry. While in Cape Town, attendees visited local stores: a BP, Pick ’n Pay, Engen/Woolworths, Spar and Food Lover’s Market. The program wrapped up with a lengthy discussion on regulations and their influence on the convenience and fuel industry worldwide.

The Global Forum programme continued with in-depth case studies from several companies: • Patricia Mahlangu, retail convenience manager with Engen Petroleum Limited, discussed the continuous journey of Attendees at the NACS Global Forum get a taste of a forecourt her company, and how it convenience store as part of their South African experience partners with leading brands that can provide services that Engen may not have. • Mohamed Carrim, general manager, retail and property for Sasol South Africa, showed how a large energy company can be entrepreneurial by Discussion time… South African representatives at the NACS Global Forum

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JULY 2016 -

RMI UPDATE TECH TALK

Sharing Automobil with social partners

he RMI has delivered copies of Automobil to social partners who requested them for a variety of projects. The magazine – which contains relevant motoring, economic and general business articles – is popular among many learning institutions as a resource for students. With each copy valued at R25, the RMI prepared a Socio-Economic Development (SED) agreement – at no cost to the organisations – as part of its B-BBEE contribution. In return, the RMI required the agreement to be acknowledged by

The RMI’s training director, Marwaan Davids, signs an SED agreement with Sci-Bono’s Henry M Ndifon, career education project officer, following delivery of copies of Automobil for use by students as an educational resource

the head of the benefitting institution, who was also required to provide a certified copy of his or her identification document and the institution’s B-BBEE certificate or any document verifying that

the institute was exempt from B-BBEE. Among the partners who made use of the service were the Quality Council of Trade and Occupations (QCTO), Triple E Training Holdings and Sci-Bono.

Gradings for Northern Region MIWA’s voice heard at AAAS convention

ishal Premlall, director of MIWA, was invited to present at the recent Africa Automotive Aftermarket Solutions (AAAS) Dealer Convention. He gave the 100-plus delegates an overview of the RMI and its various value offerings, and also focused specifically on this year’s wage negotiations. At the request of delegates, Premlall elaborated on MIWA’s progress regarding the Right to Repair (R2R) campaign in South Africa.

recent MIWA Northern Region meeting was hosted in the form of a cocktail evening with workshop owners invited to bring along their spouses.

In his overview of the RMI’s new strategic direction – The Agility Concept – Premlall indicated that the organisation was mobilising its specialist staff to have a wider footprint and a more focussed approach to business and its needs.

Les McMaster, the association’s Northern Region chairman and Vishal Premlall, MIWA’s director, conducted presentations and updates on MIWA’s activities and the new strategic direction – The Agility Concept – adopted by the RMI.

He was then requested to provide an aftermarket-workshop focussed presentation to the ACD Group in their breakaway session. This he did with specific attention to the direct benefits that MIWA delivers. These, amongst others, included discussion on the audit and grading process, warranty company investigations, the RT46 contract and more on the R2R campaign.

The well attended event created a platform for business networking and socialising. Workshop owners who received graded certificates included Willie van Heerden, of Britsweg (4 Star), Nico Grobler of Kgabotse Field Repair (4 Star) and Cassies Motors (5 Star).

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RFAUTDDO2015

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JULY 2016

TECH TALK

Turbos on the charge The trend towards downsized engines signals the end for naturally aspirated motors, says Jake Venter

WHICH BLOWER? A supercharger is driven by the engine via gears or a chain at not more than about twice engine speed.

ar brands that no longer sell naturally aspirated engines in South Africa include Abarth, Alfa Romeo, Bentley, BMW, Isuzu, Jaguar, Land Rover, Mahindra, Mercedes-Benz and Volvo. While at least six other brands still have a few naturally aspirated engines on sale, most motors in their ranges are force fed. The trend is as a result of downsizing – the reduction by manufacturers of an engine’s cubic capacity or the number of cylinders it contains – in order to improve fuel economy and reduce exhaust emissions. While most manufacturers have opted for the turbocharged route, others – including Audi, Jaguar, Land Rover, Porsche, Volkswagen and Volvo – also employ superchargers on some of their units. Most of today’s radical change is a reaction to EU regulation number 443/2009 which demanded that carmakers reduce their average CO2 figures to 130g/km between 2012 and 2015. By 2020 each company’s fleet average should not exceed 95g/km.

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It is usually a positive displacement device -- rotate it by hand and it will deliver low pressure air. It is configured to deliver boost from low rotational speeds and is therefore a good choice for a car that puts a great deal of emphasis on acceleration and performance. A turbo is driven by the engine’s exhaust gas – from which it absorbs energy – but it has to rotate at speeds above 160 000 revs/min to deliver any worthwhile boost. Its main advantage is the fact that it is driven by energy that would otherwise be wasted. BLOWER THEORY An engine is a very inefficient air pump. Air flows through it only because of a small pressure difference between atmospheric pressure and the pressure above a downwards-moving piston. A blower is far more efficient; it has to pump more air per second than the engine – otherwise it could not generate boost. Its real purpose is to

increase the density of the air so that a greater mass of air can be inhaled during every intake stroke. Density is the mass of substance in a given volume but air density changes considerably when its pressure or temperature changes. Heating it will decrease density because the gas expands – cooling it has the opposite effect – while a pressure increase will usually increase density because a greater mass of air can be compressed in a smaller space. In practice, both compression and heating occurs at the same time in a blower so that the final result could well be an increase or a decrease in density or even no change at all! These considerations have prompted at least one famous engine designer to say that a blower is a device that generates mainly heat but can occasionally be persuaded to increase an engine’s power output. Blowers improve the efficiency of an engine by increasing volumetric efficiency to well over 100%. This allows the engine to burn more fuel and generate more power. The high positive pressure also reduces the drag effect caused by manifold surface roughness or tight corners.

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TECH TALK

SUPERCHARGER OPERATION Most modern superchargers are based on the Roots type, designed in 1860 by the Roots brothers to supply air to a blast furnace. It pumps air with two, three or four meshing and rotating lobes that look like very wide gears. These are mounted in a housing and the air is trapped in the pockets surrounding the lobes. These blowers can achieve thermodynamic efficiencies of over 70% at low boost levels but at one bar boost the efficiency drops to about 55%. TURBOCHARGER OPERATION A turbo consists of a turbine wheel mounted inside the exhaust system just behind the exhaust manifold, plus a compressor wheel whose outlet is connected to the intake manifold. The wheels are mounted on a common shaft supported by a wide central bearing. The shaft transmits the rotational speed of the turbine to the compressor. The turbine’s blades are shaped so that exhaust gas entering the unit is forced to move inwards towards the exit at the centre of the wheel. This movement causes the gas velocity to drop while the gas particles that impinge on the turbine blades impart some of their kinetic energy so that pressure also drops. The transferred energy causes the connecting shaft to speed up. The compressor wheel is in some way just the opposite of the turbine. Fresh air directed from the air cleaner enters the housing at the centre and the compressor blades fling the particles outwards. The compressor outlet consists of a circular collector around the wheel periphery that is shaped like a diffuser to increase volume. The air particles speed up as they move towards the periphery but slow down dramatically when they enter the diffuser because the air is able to expand. The radial outward movement causes air pressure to rise and, as soon as the air enters the diffuser, the expansion into a larger space causes the velocity to fall so

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that the pressure rises even more. Turbo efficiency depends on the boost level but is normally between 60% and 80%.

Since the vanes are electronically controlled the boost pressure can be altered without changing engine speed.

CONTROLLING THE BOOST Boost cannot be controlled by a simple spring-loaded valve. Air will start to leak out before a set pressure level. An electronically operated solenoid or a stepper motor is employed to control the boost pressure.

COMBINED TURBO AND SUPERCHARGER OPERATION The high boost at low engine speed characteristic of superchargers combines well with the opposite characteristics of turbos, and several manufacturers – Volkswagen, Audi and Volvo among them – employ the combination to get good boost throughout the engine speed range.

Boost is the amount of pressure inside the intake manifold that is over and above the ruling atmospheric pressure – if the atmospheric pressure is one bar then a boost of one bar is equivalent to an absolute pressure of two bar. A fixed geometry turbocharger (FGT) has the disadvantage that airflow characteristics cannot be altered – they are determined by the shape and configuration of the vanes on the turbo and the compressor wheel. Variable geometry turbos employ several adjustable vanes around a central turbine. As the angle of the vane changes so does the angle of the air-flow onto the turbine blades. The area between the vanes work as nozzles and, by opening them at high engine speed and closing them at low speed, the turbo can produce boost from a low speed without restricting flow at higher speed.

A small supercharger is used to provide boost when the larger turbo is turning slowly. When the latter comes onstream the supercharger is bypassed and decoupled to reduce energy loss. This gives very good response and a flat torque curve throughout the engine’s speed range. Volkswagen claims that its dual-boosted 1,4-litre engine is equal in output to a naturally aspirated 2,3-litre engine, with fuel economy improved by 20%.

Jake Venter has worked as a mechanic, as an engineer in an engine assembly plant and as a lecturer, but now prefers journalism.

JULY 2016

LEGAL

Rethink needed! Recent amendments to South Africaâ&#x20AC;&#x2122;s Competition Act could undermine the chances of successfully prosecuting companies involved in cartel conduct, says Douw Breed, a director at Barnard Inc Attorneys

n May this year, an amendment to the Competition Act regarding cartels came into effect. The consequence of the amendment is that a director or manager of a company involved in cartel activities may now be liable to a fine of up to R500 000 or a jail sentence of up to 10 years. Cartel activities are discussed in Section 4(1)(b) of the Act and include the direct or indirect fixing of a purchase or selling price or any other trading condition; dividing markets by allocating customers, suppliers, territories, or specific types of goods or services; or by collusive tendering. While the amendment to the Act is perceived as a welcome development since it individualises criminal sanctions for cartel activities, it appears to be a replication of enforcement mechanisms already available in law. I believe the existing Prevention and Combating of Corrupt Activities Act provides better remedies against cartel

activities as it imposes harsher sanctions and penalties.

The evidence is used to prosecute the other companies involved in the cartel.

The Prevention and Combating of Corrupt Activities Act seems to treat collusive tendering as corruption and provides for sentences ranging from five years to life imprisonment. These penalties are much harsher than those prescribed in the Competition Act.

The CLP has had much success in the past and has been instrumental in helping to uncover numerous cartels. Following prosecution, billions of rands in fines have been paid. Unfortunately, the effect of the amendment of the Competition Act may undermine the success of the CLP in that the possibility of criminal liability for directors and managers may have a negative effect on the number of companies coming forward with information.

There is also a concern that the amendment could ruin the efficiency of the Corporate Leniency Policy, (CLP) which is the foundation of competition policy and assists the Competition Commission to uncover cartel conduct that would otherwise have gone unnoticed. The CLP encourages companies involved in cartel activities to come clean about such conduct and expose other companies involved. A company is given immunity from prosecution in exchange for supplying information or evidence of the cartel to the Competition Commission.

While the law states that competition authorities may recommend to the National Prosecuting Authority (NPA) that a person deserves leniency from criminal chargesâ&#x20AC;&#x161; the NPA may still choose to prosecute since it acts independently in criminal proceedings. Parliament might consider removing the amendment from the Competition Act in future as its effect may prove detrimental to the economy as a whole.

Members of RMI4LAW enjoy the benefit of the 24/7 legal advice line to obtain assistance from attorneys. To join RMI4LAW, Phone 0861-668-677

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MAY 2016 -

LABOUR

OU T!

INCAPACITY:

Unsuitability and incompatibility Poor work performance can be attributed to a number of factors. Incapacity was dealt with in a previous article. Two less common forms include unsuitability and incompatibility. Douw Breed, a director at Barnard Inc Attorneys, reports

nsuitability can be defined as an employeeâ&#x20AC;&#x2122;s inherent qualities, or temperament, that renders him or her unsuitable for a position. Incompatibility is found in circumstances where an employee plainly does not fit in with the working environment and relates inadequately to colleagues. Both of these forms of incapacity are extremely difficult to prove and, as a result, careful consideration should be given when determining whether particular circumstances apply.

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LABOUR

Incompatibility can give rise to very serious complications in the workplace. Issues can range from threats of industrial action to demands from a third party calling for the dismissal of a specific employee, as illustrated in the matter of Lebowa Platinum Mines Ltd v Hill (1998) 19 ILJ 1112 (LAC).

(1)

To summarise: The respondent, Hill, make a derogatory reference to one of his co-workers and subsequently faced disciplinary charges for his offensive language. He received a verbal warning.

(4)

(2)

(3)

(5)

The union in the workplace voiced its dissatisfaction at the sparing form of discipline and threatened industrial action if Hill was not dismissed. Following the threat and the demand for dismissal, the company had several meetings involving the aggrieved and affected parties. (6) Various alternatives, including transfers, were discussed with Hill. None of the alternatives were acceptable to him and he was dismissed as a result. (7) He took the matter to the Industrial Court which found that the fact that a third party had demanded the dismissal of the employee rendered the dismissal unfair. It further held that the employer did not consider all the alternatives available before dismissing the employee. The Court awarded compensation to Hill exceeding R1-million. The employer took the matter to the Labour Appeal Court which set aside the award and finding. The Appeal Court indicated that each case should be dealt with on its merits when determining whether the dismissal of an employee on behalf of a third party could be considered fair. In its judgement it established the following guidelines:

(8)

(9)

The mere fact that a third party demands the dismissal will not render such dismissal fair. The demand for the employeeâ&#x20AC;&#x2122;s dismissal must usually enjoy a good and sufficient foundation. The threat by the third party to impose a sanction must be a real one. The employer must assess the probable effect of the sanction threatened by the third party. The mere fact that dismissal of the employee ensures continued smooth commercial operation is not sufficient to justify termination of employment. Something more is required, and that something is the objectively sound conclusion that dismissal is the only option that is fair to both the employer and the employee. The employer must make reasonable endeavours to dissuade the party which is making the demands for dismissal from persisting. The employer should properly investigate and consider all alternatives to the dismissal with a view to determining whether one or more of them constitute a reasonable alternative to dismissal. In the process of reaching a determination as to whether or not there is a reasonable alternative to dismissal, the employer must consult fully and properly with the employee and afford him or her proper opportunity for input, and properly take the representations into account before arriving at a decision. It is incumbent on the employer to ensure that the employee is aware that non-acceptance of an

identified reasonable alternative or alternatives would, or could, result in dismissal. (10) In all its deliberations the employer must properly consider the extent of the injustice to the employee that would be occasioned by dismissal. (11) Relevant to the consideration of injustice to the employee is the question whether any objectively blameworthy conduct on his or her part gave rise to the demand for the dismissal. After having applied the above test, the Labour Appeal Court held that the dismissal of the employee was both substantively and procedurally fair. The threat of industrial action made by the union was a real and the appeal was granted and costs were awarded. It is advisable when considering action against an unsuitable or incompatible employee and demands are made for dismissal that these guidelines be thoroughly considered. In conclusion, it is imperative to seek professional advice in similar circumstances as the Code of Good Practice: Dismissal does not deal with this form of poor work performance distinctly.

Douw Breed (BCom (NWU) LLB (NWU)) is a director at Barnard Incorporated Attorneys www.automobil.co.za

JULY 2016 -

FAQs

RMI UPDATE Answers by experts to questions recently received by the RMI Q. Can you tell me what the situation is regarding the employment of a foreign national as a qualified technician in South Africa? A. If an employer is planning to employ a foreign national as a qualified technician, the employer must submit the prospective employee’s original trade qualification certificate to the South African Qualifications Authority (SAQA) for evaluation.

within the business until such time as the validation process is finalised.

The certificate will then be forwarded to MIBCO for adoption. The employee may not practice as a qualified technician until such time as the validation process is complete. This situation arises because MIBCO has received many fraudulent certificates through the years.

Q. What does MIBCO do? A. The Motor Industry Bargaining Council (MIBCO) is responsible for maintaining industrial peace and stability in the automotive sector, providing services to about 21 000 employers and about 300 000 employees throughout South Africa. It facilitates collective bargaining of employment conditions such as wages, salaries and hours of work, as well as the settlement of labour disputes through the Dispute Resolution Centre (DRC).

However, if legally permitted to work in South Africa, the prospect can be employed as a repair shop assistant under supervision of a qualified technician

To lodge an application to employ a foreign national as a qualified technician, log on to http://www.saqa.org.za. Check under SERVICE: Evaluation of Foreign Qualifications – Online Application. You can also telephone the Evaluation of Foreign Qualifications Call Centre (012) 431 5070.

Q. Can you explain what the Labour Relations Act governs? A. The Labour Relations Act (LRA) governs how employers and employees interact with each other in the workplace and sets out the rights and obligations of trade unions and employer organisations. It is not concerned with terms and conditions of employment but rather the rights of individuals in the workplace, with the emphasis on fairness, bargaining and dispute resolution. Q. Why do we have an Occupational Health & Safety Act? A. The OHS Act aims to protect the health and safety of people in the workplace, taking into account the type of work they do or the job-related activities in which they are involved. In the interests of maintaining a healthy workforce, is mandatory for employers to comply with all aspects of the Act.

Software for Auto Repair Shop: • Service Quotes & Invoices • Vehicle Service History • Parts Inventory Management • Service Job Cards • Full Accounting & payroll • Customer Contacts Management (CRM) • One Time Buy (No Monthly Fee)

Contact details: 011 614 0003 011 042 6761 FAX: 088011 614 0003 Cell: 083 968 9176

Website: www.autoeasy.co.za info@autoeasy.co.za

58 - MAY 2016

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BUSINESS MANAGEMENT

Work less, achieve more Business coach Fergus Ferguson offers his Top 10 tips for working less and achieving more

onrad Hilton once said that success was connected with action. “Successful people keep moving. They make mistakes – but they don't quit,” he was quoted as saying. In that spirit, here are my Top 10 tips to running a successful business in which you’ll work less and achieve more… 1. Priorities versus lists and plans Knowing what’s important to succeed will help you to focus your energy and use your time on your business’s most critical elements. 2. Fire bad customers Eliminate time wasted by customers who tie up your energy and team with inconsequential interactions. You need to either get rid of them or transform them into customers who proactively feed the bottom line. 3. Double your conversion rate Concentrate only on products and services that produce the most profit and invest in acquiring the loyalty of the perfect customer. 4. Pay for resources to buy time Hand over any non-core areas of your business to a service provider who can do it quicker and more effectively than your team. Then you can use the time

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saved to work on key business elements that will make more money than you’re spending. 5. Tap into team Everyone in your organisation has certain skills, so identify and use them. Not only don’t you need to do everything yourself, but you might not be the best at it, and there is someone in your team who can do it efficiently and effectively, saving your time. 6. Check your systems Where are the gaps? What can be streamlined, automated or handed over? There is an upfront time cost in getting systems in place, but the long-term savings are immense. 7. Measure what you do Spend two weeks measuring what you do by the hour. You need to know what you spend time on before you can start finding more time. You may be surprised by where your time is actually going.

8. Set aside ‘me’ time Focusing on time helps you stay as productive as possible while you’re completing certain tasks. An open door policy is great, but set aside clearly demarcated times when your staff can walk into your office, and defined times when they cannot. 9. Spend time planning and evaluating Even 15 minutes spent planning and evaluating each day can be hugely beneficial. When evaluating, assess which activities drove money to the bank and then use these insights to create your plans for the next day, week and month. 10. Manage e-mails Unsubscribe from the e-mails that don’t add value and don’t read e-mails first thing in the morning. Set up an auto-reply that says you’ll read mails and respond to voicemails at certain times.

Fergus Ferguson is a Franchisee of the global business coaching company – ActionCOACH. He is an accredited Business Coach who assists business owners to significantly grow their profits and develop their entrepreneurial skills. To find out more about Business Coaching or to receive a complimentary consult and a business health check, call 083 256 3175 or visit actioncoach.com/fergusferguson

JULY 2016

RMI UPDATE

What is ART? Managing HIV/AIDS in the workplace

ntiretroviral treatment (ART) means using antiretroviral drugs (or ARVs) to treat HIV infection and, in some instances, to prevent HIV infection – for example, Post Exposure Prophylaxis (PEP) and Pre Exposure Prophylaxis (PrEP), as discussed in a previous article. ARVs try to prevent HIV infecting new cells and a combination of drugs provides a powerful attack on HIV. ARVs aim to reduce the rate at which the virus replicates and reduce the amount of HIV in the blood – the viral load – which slows progression of the virus and helps HIV positive people live longer. In short, HIV treatment helps a person to stay well by reducing the amount of HIV in the body.

•

antiretroviral drugs is best; ARVs usually have to be taken life-long.

How effective is ART? Medical research suggests that a combination of at least two, but preferably three, different types of ARVs should be used for ART to be effective. It is possible to stabilise or reverse the damage that the virus has already caused to the immune system if ART is taken exactly as prescribed. ART should not be stopped after someone has started using it, even if the viral load decreases to undetectable levels, a person must continue with the medication.

Important facts about ARVs and ART:

The viral load will start to increase again if the medication is stopped. Interrupted use of ART will also increase the possibility of the virus becoming resistant to the medication.

• •

Positive living

•

ART is a treatment, not a cure; A person using ARVs is still infectious and can still transfer the virus to other people; ARVs must be taken exactly as prescribed for them to work properly; When side effects occur, it’s important that a doctor be consulted; Used alone, none of the drugs will work for long – a combination of

60 - JULY 2016

• • • •

In addition to taking ARVs there are other things that people can do to help them cope effectively with HIV. Positive living means an infected person taking control of the following aspects of their lives: • Nutrition: Eating a good diet whenever possible; • Exercise: Staying as active as possible;

Rest: Getting sufficient rest and sleep; Stress Management: Reducing stress as much as possible; Support System: Meeting and talking to friends and family; Treatment for chronic conditions: Seeking medical attention for any health problems. Contact Redpeg for accredited HIV/AIDS workplace training, consulting and research. tim@redpeg.co.za | 0861 REDPEG or (011) 794 5173 | www.redpeg.co.za)

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JULY 2016

62 JULY 2016

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JULY 2016

MEMBERUPDATE

The RMI welcomes these new businesses into membership Member Trading Name

City / Town

Member Trading Name

City / Town

Member Trading Name

City / Town

Protec Auto Benoni Bosch

Benoni

@ Tyres Dunlop Zone

Taung

Jimmy’s Panelbeat

Bronkhorstspruit

3M Car Service & Repair

Pretoria

JMD Maintenance & Repairs

Richards Bay

4 Stroke Auto Clinic

Roodepoort

A1 Tommies Services & Repairs

Kimberley

Accessories Spares Centre

Durban

Kanu Commercial Body Construction

Port Elizabeth

Advance Motors

Bela-Bela

Koketso Kamogelo Trading

Mokopane

Rightway Developments

Midrand

Africa Bodies

Johannesburg

KT Auto

Randburg

Ronna Holdings

Rustenburg

Auto Hausen

Lydenburg

Kumho Tyres

Ladysmith

Aweta Worcester

Kuruman Ford

Kuruman

Ben’s Auto Clinic

Midrand

Q Qwa-Qwa Tyre & Fitment Centre

Phuthaditjhaba

S Sky Cars Auto Repairs

Pinetown

Smart Customs Auto Body

Pretoria

L & F Motors

Johannesburg

Supamac 173

Bellville

Lutchy’s Autobody

Pretoria

Supamac 53

Bellville

Superior Auto Repairs

Welkom

C Car Service City - Brakpan

Brakpan

Car Service City - Linden

Johannesburg

MAG Auto Care Centre - The Glen

Johannesburg

Car Service City - Modderfontein

Modderfontein

Manguni Auto Diesel Services

Witbank

The Diesel Room

Benoni

Consolidated Garage Equipment

Benoni

Map Auto Parts

Newcastle

Trueway Panelbeaters

Alberton

Meadowridge Convenience Centre

Cape Town

Turbo Petrol & Diesel

Pretoria

Mmuso Wahao Engineering & Maintenance

Polokwane

D DA & K McDonald Engineering

Johannesburg

Mob BM Tune Tech

Vereeniging

Daly Mazda

Klerksdorp

Mohoroha Construction & Projects

Lephalale

Union Motors Lowveld - Nelspruit

Nelspruit

Driving Range Panelbeaters

Cape Town

Moto Lube Fourways

Randburg

Union Motors - South Coast

Shelly Beach

Mototech Autobody

Midrand V

E Eurocar Kokstad G Grease Monkey Motor Garage

Venter Motors GM

Westonarea

N2 Motorserve 24/7

Strand

Vineyard Convenience Centre

Cape Town

Nice Deal General Trading

Phalaborwa

Vredendal Toyota

Vredendal

Vredendal VW

Vredendal

Centurion P Pantera Tyres

Ermelo

Herbs Panelbeaters & Spray Painting

Butterworth

Peugeot Citroen Tygervalley

Bellville

Westonarea Toyota

Westonarea

Heritage Auto Excellence

Stellenbosch

Phalaborwa Ford

Phalaborwa

Wheelquip JHB

Boksburg

Hyundai Westonarea

Westonarea

PK Motorsport

Cape Town

Wondafix Panel & Spares, Sales & Services

Stanger

Potties Auto Electrical

Mokopane

Promec Auto

Verulam

Z Zeb’s Auto

Krugersdorp

ADVERTISERS AUTOMOBIL - JULY 2016 EDITION

BENEFITS OF BELONGING With a membership of 7 500, the RMI provides a very effective collective voice that gives members considerable clout in negotiating better trading conditions. As the lead voice in the motor industry, the RMI is a member-driven organisation that constantly seeks solutions to concerns raised by members in the day-

CLIENT

CONTACT

Aer O Cure Africa Automotive Aftermarket Solutions Alert Engine parts Audi Parts Dialogic Management Services (Pty) Ltd Executive Transmissions GUD Filters Just In Time computers (Autoeasy) MiWay Moto Health care Robert bosch Rose foundation Sammitr Silver falcon Trading Snap On Africa Tenneco Automotive Toyota South Africa motors (Pty) ltd Volkswagen Parts Willard Batteries

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WEBSITE PAGE www.aerocure.co.za OBC www.aaas.co.za 28 & 29,65 www.alertengineparts.co.za 38 www.audi.co.za 13 www.dialogic-ms.co.za 27 www.executivetransmissions.co.za 9 www.gud.co.za 61 www.jitc.co.za 58 www.miway.co.za IBC www.motohealthcare.co.za 42 & 43 www.bosch.co.za 21 & 33 www.rosefoundation.co.za 51 www.sammitr.co.za 40 www.hurricaneauto.co.za 62 & 63 www.snapon.co.za IFC www.MONROE100.com 55 www.toyota.co.za 16 & 17 www.vw.co.za 41 www.willard.co.za 15

to-day running of their businesses.

- JULY 2016

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Contact your nearest PIA branch today Bloemfontein

Durban

George

Nelspruit

Cape Town

East London

Johannesburg

Port Elizabeth

Tel: (051) 506-0700 Fax: (051) 447-8336 Tel: (021) 590-7500 Fax: (021) 591-5033

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

Tel: (044) 874-4175 Fax: (044) 874-3706 Tel: (011) 879-6000 Fax: (011) 454-0200

Tel: (013) 752-4821 Fax: (013) 752-4869 Tel: (041) 390-3000 Fax: (041) 373-0090

Pretoria

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

JULY 2016

TALKING POINT

Frost & Sullivan recently released its latest review of Africa’s auto industry. Here’s a summary of the findings

Trends in Africa’s auto industry

frican economic growth is slowing in 2016, with countries like Nigeria and South Africa showing significantly lower GDP growth rates. Though the continent’s auto market remains relatively underdeveloped in comparison to those in Europe, Asia and North America, industrial prospects are shifting with growing local manufacturing and better infrastructure making opportunities for the industry in Africa increasingly attractive. A key trend is manufacturing investment. The report says though the sector currently faces capital, labour and infrastructure challenges, impediments are likely to become less burdensome thanks to improved government policies, private sector investment and the creation of better business environments. The review indicates that automotive manufacturers are moving closer to African markets to produce vehicles – a practice adopted due to local content promotion policies instituted by countries such as Nigeria and Kenya – which have resulted in restrictions on imports of second-hand vehicles as well tariffs on new vehicles. In South Africa, key automakers such as BMW, Toyota, Volkswagen and Ford have increased their investments to expand operational and automotive manufacturing capacity – moves perceived as positive indications of each company’s commitment to the country as well as to the continent as a whole.

66 JULY 2016

Also, Indian motor company Mahindra & Mahindra has given strong indications that it plans to manufacture vehicles in South Africa, possibly with an investment in the East London industrial development zone. Generally, automakers are using South Africa as a base for foreign markets such as Europe, with exports of locallymade vehicles on the increase. Domestic demand has tapered off due to sluggish economic growth. In spite of significant challenges relating to financial constraints and long construction times in Kenya and Nigeria, the countries have been forging ahead with key road transport projects. The downturn in oil prices could further hamper Nigeria’s financial contributions to its infrastructure budget, leading to less wealth creation in the short term. This will negatively impact vehicle demand in the country. On the positive side, the report says expanding transport corridor projects in East Africa are expected to reveal greater logistics opportunities and increase demand for commercial vehicles over the next five years.

Frost & Sullivan note that the concept of car ownership is changing globally with a significant shift to car-pooling and ride sharing concepts in congested European cities. The report says that while the trend is not expected to be adopted in sub-Saharan Africa, in South Africa there is a shift to multi modal transport solutions, but it is taking place at a slow rate due to significant challenges faced in implementing large-scale, and integrated, public-transport solutions at a city level. According to the report, the decreased rate of wealth creation in many African economies in 2016 and 2017 will only slightly negatively impact the automotive sector. Local content policy will continue to assist to promote local assembly of vehicles in Nigeria and Kenya. In 2017, Frost & Sullivan anticipates more automakers will approach these markets, especially in the luxury, hatch and pick-up segments. However, South Africa will remain the automotive powerhouse of the continent with manufacturers shifting their production lines to cater for exports in the face of subdued local demand over the next five years.

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JULY 2016

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