Automobil March 2017 by Future Publishing

MARCH 2017

DAIMLER GOES DIGITAL Investment in smart phone app

MANAGING BAD DEBT

Tips to remain solvent

A raw deal for non-OEM suppliers?

ERA: MOVING THE GOALPOSTS RMI UPDATE: CELEBRATING 70 YEARS OF SUCCESS; WHAT SELLS PETROL?; MIWA WELCOMES COMPETITION

www.automobil.co.za COMMISSIONâ&#x20AC;&#x2122;S PROBE; A WILL TO SUCCEED; WORLDSKILLS HOPEFULS SHOW THEIR METTLE; PARTINFORM KICKS OFF THE YEAR IN BENONI; AUTOLIV SA SCOOPS EXCELLENCE AWARD; BOOSTING ECONOMIC CONFIDENCE

MARCH 2017

22 -MARCH NOVEMBER 2014 2017

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CONTENTS – MARCH 2017 COLUMNS 5 Driver’s Seat: Jakkie Oliver, CEO of the RMI 7 Editor’s Letter: Wynter Murdoch 9 Hot Stuff: New product showcase 60 Frequently Asked Questions: Answers from experts 66 Tailpiece UPDATES 12 News

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

P28

Reuben Van Niekerk reuben@thefuture.co.za

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

Future Publishing (Pty) Ltd 247 Jan Smuts Avenue, Dunkeld West, Johannesburg PO Box 3355, Rivonia, 2128 Tel: +27 (11) 327-6107

Moving the goalposts

The Engine Remanufacturer’s Association (ERA), comprises the cream of South Africa’s automotive engineers who are dedicated to providing customers with the best advice, finest components and highest quality workmanship

RMI review

Celebrating 70 years of success; What sells petrol?; A will to succeed; WorldSkills hopefuls show their mettle; Partinform kicks off the year in Benoni; Assessing the African market; Autoliv SA scoops excellence award; Boosting economic confidence

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Advertising Sales Executives: Enver Lawangi, Greg Surgeon, enver@thefuture.co.za greg@thefuture.co.za

New payment method for fuel; UK and SA to strengthen trade ties; Ford introduces Omnicraft; Peugeot in talks to buy out Opel; NADA looks to the future; Lamborghini recalls the Aventador; Scania seeks growth partners; Demand for collision avoidance systems rises; Volkswagen rejects former chairman’s claim; Ford invests $1-billion in artificial intelligence; GM honours top dealers; SA components world class

COVER STORY 22

Small non-OEM suppliers and exporters question an apparent lack of incentives offered by Government’s Automotive Production and Development Programme

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RMI Automobil’s Editorial Sub-Committee: Chairman: John Ellmore; Gary McCraw, Gideon de Klerk, Denice Grobler, Shamika Singh, Danelle Van Der Merwe, 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).

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.

APDP: A raw deal?

FEATURES 28

46 52

Daimler Financial invests in smartphone app Daimler Financial Services has confirmed their commitment to digital financing and mobility services by announcing an investment in AutoGravity

Motoring Mishaps

It takes only a few seconds for an incidental mishap to put a car out of commission. Jake Venter examines the causes of common catastrophes

Resignation and accrued leave

The issue of accrued leave is complex – especially when employees resign or their employment contracts are terminated for other reasons. Douw Breed explains why

Buying Property? Beware of outstanding rates and taxes

Nihann van Rooyen, a Senior Associate at Barnard Incorporated Attorneys, analyses the impact of section 118(3) of the Municipal Systems Act on prospective sellers and buyers of property

Dealing with bad debt

If you allow flexibility on your payment terms there will always be customers who take you for a ride, says business coach Fergus Ferguson

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MARCH 2017 -

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 MARCH 2017

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DRIVER’S SEAT

Investing in training Training is not only a worthy investment in your business but also contributes towards the much needed economic growth that South Africa desperately needs, says Jakkie Olivier, CEO of the RMI

hat does the RMI do for you? The short answer: a lot. Our stakeholders merely have to look at the RMI’s latest annual report and the various news articles to gain insight into the range of activities that the RMI and its associations are involved in. All of these activities are aimed at protecting the interests of members and ease the burden on employers running a business. One of the primary objectives that the RMI will keep on doing in 2017 is to focus on progressive training initiatives. Training of capable artisans in a technologically fast-changing environment has presented major challenges in the past, one of which we found to be the lack of enthusiasm from employers. The RMI understands the frustration employers encounter when dealing with bureaucratic processes in the training arena of SETAs and government departments. This is a concept which has no doubt inhibited employer collaboration and enthusiasm to train. The RMI is relentlessly moving forward to assist employers and believes that

through ongoing relationship-building efforts and active participation in training forums, our members are starting to see the long-term benefits of skills development for their businesses and the automotive industry as a whole. For example, two activities that the RMI are actively involved in are our ROI Project with the IMI UK and WorldSkills SA. The tripartite ROI Project of merSETA, RMI and IMI UK has progressed very well with promising results, and I will give more extensive feedback in the next issue of Automobil. WorldSkills International is the global hub for skills development and excellence that actively promotes the benefits of and need for skills, mainly through skills competitions and knowledge exchange. The concept basically shows how important skills development and education is for the youth. During recent years, the RMI supported WorldSkills and 2017 is no different. WorldSkills SA, one of 72 official members of WorldSkills International, is located within the Department of Higher Education (DHET). To achieve its goals, bi-annual national skills competitions are driven and hosted by various stakeholders. As a supporter and important stakeholder of WorldSkills SA, the RMI participated

in the 2017 National Skills Competition which was held in Durban from 12-17 February. Three automotive skills, Automotive Technology, Car Painting and Auto Body Repair, were amongst the 22 skills categories that showcased in Durban with the winners already selected and ready to be announced. The competition winners will represent South Africa later this year at the international event that will be hosted in Abu Dhabi by the international body. Through the RMI’s support and participation, we hope to raise the profile of automotive skills and demonstrate how important skills are and how critical it has become to the automotive industry’s future workforce. Without trained people to work on our growing car park with its high technological advancement and demands, the industry would continue to face huge challenges in serving the motoring public effectively. Motor industry employers who are interested in training and skills development assistance should contact any of our RMI offices – because training is not only a worthy investment in your business but would also contribute towards the much needed economic growth that South Africa desperately needs.

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

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MARCH 2017 -

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 - MARCH 2017

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EDITOR’S LETTER

ith uncertainty over trade agreements looming large in the UK, it’s heartening to note that South Africa’s Minister of Trade and Industry, Rob Davies, appears to be trying hard to keep the country’s economic flag flying high. In the week before British MPs voted overwhelmingly in favour of the UK leaving the European Union’s single market, Davies jetted into London for a high-level meeting with Liam Fox, Britain’s Secretary of State for International Trade. The visit followed an earlier meeting held in South Africa with Britain’s Chancellor of the Exchequer, Philip Hammond. At the latest engagement, Davies and Fox committed themselves to strengthening trade ties and to working together to identify investment opportunities that would benefit not only the UK and South Africa, but also wider southern Africa and Africa regions. The UK’s motor industry, which is perceived to be under threat following the Brexit decision, will reportedly need all the help it can get from trade partners if it is to survive the severing of ties with the

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European Union. Already, GM’s decision to sell Opel in Germany – and with it, sister brand Vauxhall in the UK – is being laid in some quarters at the door of the Brexiteers. Bilateral trade in goods and services between Britain and South Africa stood at £7,6-billion (about R126,64-billion) in 2015, with UK exports of goods and services increasing by 25% in the last decade. South Africa’s exports to the UK – which includes motor vehicles, parts and accessories – have increased by over 5% on an annual basis for the last decade, and the country is now ranked as Britain’s third biggest trading partner within the Commonwealth. “The meeting was an opportunity for the ministers to discuss existing links as well as opportunities to further develop these,” said a statement issued in the UK following the discussions. It quoted Fox as saying: “South Africa is a key trading partner to the UK – a long-standing, strong and strategic ally

for the United Kingdom in Africa and internationally. It is our largest export market in Africa; the largest economy in the southern Africa region and a fellow G20 member. “As we become an even more outward looking country, we will continue building on our relationship with South Africa and today’s meeting was an opportunity to discuss how we progress that.” It’s good to know that, at least in terms of trade relations, some progress is being made. Wynter Murdoch Editor

MARCH 2017

NEWS

SPEAK TO US RMI EXECUTIVES

hief Executive Officer: C Jakkie Olivier jakkie.olivier@rmi.org.za Chief Operations Officer & Human Resources Director: Jan Schoeman jan.schoeman@rmi.org.za Financial Director: Renee Coetsee renee.coetsee@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

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

Facebook.com/AutomobilSA

TRAINING, TRANSFORMATION & ENTERPRISE DEVELOPMENT Vacant SADFIA Louis van Huyssteen louis.vanhuyssteen@rmi.org.za

@AutomobilSA

ERA Pieter Niemand pieter.niemand@rmi.org.za NAZA Julian Pillay julian.pillay@rmi.org.za

www.rmi.org.za

MPEA, MIMA Erwin Stroebel erwin.stroebel@rmi.org.za MDA Jeff Molefe jeffrey.molefe@rmi.org.za

RMI PARTNERS 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 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 Surrey Square Office Park 330 Surrey Avenue Ferndale Randburg 2194

NADA Gary McCraw gary.mccraw@rmi.org.za VTA Joy Oldale joy.oldale@rmi.org.za

RMI REGIONAL OFFICES

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

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

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

SAPRA Viv Corinaldi viv.corinaldi@sapra.co.za

8 - MAY 2015

Vehicle Testing Association

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HOT STUFF

NEW PRODUCTS

See the stars K&N has led the way with highperformance, serviceable cotton gauze filters since 1969 and a lot has changed since then. As innovators, the brand has kept abreast of developments in the marketplace, but on a design level remain committed to increasing power and protection. The latest product to come outâ&#x20AC;¨of their California HQ is the Orion universal air intake system. Sized to fit into the densely-packed modern engine bay, the Orion comes with â&#x20AC;¨a range of fitting hardware, and accommodates vents and sensors. Like all K&N filters, the Orion is easy to service and requires minimal maintenance.

Bridgestone grows truck, bus footprint Bridgestone South Africa has announced a new addition to its Firestone FS404 range of heavy duty vehicle tyres. Initially available only in 315/80 R22.5 sizing, the FS404 is now also available in a 12 R22.5 option. The FS404 is optimised for duty on steer, drive and trailer axles, and is able to deliver exceptional mileage and durability, in original life and also further retreading life. Some of the main contributors to the FS404's wear resistance are equaliser ribs in the tread pattern which reduce the effects of irregular wear, and stone ejectors which give greater resistance against stone trapping, reducing damage to the tread surface and steel belt package. The sophisticated tread design provides better steering response and aquaplaning resistance. The growth of the FS404 range will solidify the Bridgestone Group's position in the truck and bus radial (TBR) market. Bridgestone is currently the only tyre maker to manufacture TBRs in South Africa, the company performs ongoing research to optimise the manufacture of tyres which perform better in South Africa's demanding operating conditions with their wide temperature ranges and challenging road surfaces. Bridgestone's TBRs are distributed through Bridgestone South Africa Commercial which provides numerous services including tyre management and monitoring systems. A tyre like the FS404 will spend its initial service life on the steering or drive axles and then be moved to a trailer or kept on a drive axle once it is re-treaded. Ongoing monitoring is essential to prevent shortened service life due to factors like under-inflation or lack of adequate maintenance.

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MARCH 2017 -

YOU DO LIFE.

WE CARE FOR IT.

10 - SEPTEMBER 2016

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Meet Paul.

He is preparing for his management meeting. And nowâ&#x20AC;Śhalf his staff are running very late due to a traffic jam! So while you plan the health of your company and family, we take care of the health of you and your employees. For all your healthcare needs, call

0861 000 300 to arrange a face-to-face consultation at your workplace or visit www.motohealthcare.org.za.

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SEPTEMBER 2016 -

NEWS

New payment method for fuel

rivers of Jaguar cars in South Africa will soon be able to use their vehicle’s touchscreen to pay for fuel thanks to a new cashless payment app. The Shell app is one of several new enhancements to Jaguar’s F-PACE, XE and XF models. Instead of using a card or cash to pay the bill, owners who install the app can simply drive up to any pump at a Shell service station and use the vehicle’s touchscreen to select how much fuel they require and pay using PayPal or Apple Pay. Android Pay will be added later in 2017. An electronic receipt will be displayed on the touchscreen, so customers can leave the forecourt confident of having paid the bill. A receipt will also be sent directly from the pump to the driver’s email

address so it can be added to accounting or expenses software. “In a world where cash is no longer king, customers are increasingly using electronic payments and contactless cards,” says Peter Virk, Jaguar Land Rover's Director of Connected Car and Future Technology. “Making a payment directly from a car’s touchscreen will make refuelling quicker and easier. With this new system you can choose any pump on the forecourt and pay for the fuel even if you’ve forgotten your wallet or can’t find your credit or debit card.” “Keeping track of expenses and tax claims will also be made much simpler, with no receipts to lose as these will all be sent electronically.”

UK and SA to strengthen trade ties The meeting took place little over a week before British MPs voted overwhelmingly in favour of the UK leaving the European Union’s single market – and followed a visit to South Africa in December by the Chancellor of the Exchequer, Philip Hammond.

Dr Rob Davies and Dr Liam Fox meeting to discuss trade

ith implementation of Brexit looming, Rob Davies, South Africa’s Minister for Trade and Industry, recently held talks in London with Liam Fox, the UK’s Secretary of State for International Trade, as part of ongoing high-level engagement regarding economic relations between the two countries.

12 - MARCH 2017

According to a statement issued by Britain’s Department of International Trade, the ministers committed to strengthening ties and to working together to identify trade and investment opportunities that would benefit not only the UK and South Africa, but the wider southern Africa and Africa regions. The statement said bilateral trade in goods and services between Britain and South Africa stood at £7,6-billion

(about R126,64-billion) in 2015, with UK exports of goods and services increasing by 25% in the last decade. South Africa’s exports to the UK – which includes motor vehicles, parts and accessories – have increased by over 5% on an annual basis for the last decade, and the country is now ranked as Britain’s third biggest trading partner within the Commonwealth. “The meeting was an opportunity for the ministers to discuss existing links as well as opportunities to further develop these,” the statement said. It quoted Fox as saying: “South Africa is a key trading partner to the UK – a long-standing, strong and strategic ally for the United Kingdom in Africa and

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NEWS Unlike current phone-based payment methods, Shell and Jaguar Land Rover have created a simple but secure customer experience that uses geolocation technology and a cloud based pre-payment check with the PayPal or Apple Pay wallet. “As the world’s number one global fuels retailer, this e-commerce collaboration with Jaguar Land Rover is part of Shell’s commitment to continuously improve the digital experience for our customers at the forecourt,” said David Bunch, Global Vice-President of Shell Retail Marketing. “With around 30 million customers every day, we have a mission to continuously find ways to make their journeys better.” The Shell app with in-car cashless payments was made available for download in the UK last month, and will be rolled out to additional markets globally, including South Africa, during 2017 and 2018.

“We are working with leaders in e-commerce such as Shell to enable our customers to enjoy cashless motoring via their car’s touchscreen. Whether it’s paying for fuel, parking, tolls, or even at a drive-through restaurant, the aim of cashless motoring is to make life easier for our customers,” said Virk. “Our technology allows users to put their phone away out of sight and use it via the touchscreen in the car, because as the car becomes more connected to the Internet of Things, we will always be guided by what is appropriate and safe to do while driving. “So in-car payments will only be enabled when it is safe to do so, preventing unnecessary driver distractions.” The new in-car cashless payment app will be available across the enhanced Jaguar F-Pace SUV, F-Type and XF and XE model ranges, as well as the latest Land Rover models.

internationally. It is our largest export market in Africa; the largest economy in the southern Africa region and a fellow G20 member. “South Africa is also the largest recipient of UK foreign direct investment in Africa, accounting for 30% of total UK foreign direct investment (FDI) in 2014, a value of £13,1-billion. “As we become an even more outward looking country, we will continue building on our relationship with South Africa and today’s meeting was an opportunity to discuss how we progress that.” In his response, Davies said: “The UK is an historical and strategic trade and investment partner for South Africa and remains a key market especially for agriculture exports accounting for

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over 20% of SA’s exports of wine and 30% of fruit exports globally. “The UK is the biggest destination in the EU for South African investment, accounting for 30% of SA investments into Europe. Furthermore, 46% of SA’s global investment originates from the UK.

“We must ensure that we have a predictable trade and investment environment for mutual benefit for both parties. As we work to achieve this, South Africa looks forward to discussing how our trade post-Brexit could build on the recently concluded Economic Partnership Agreement with the EU.”

MARCH 2017

NEWS

Peugeot in talks to buy out Opel

he French PSA Group, owners of the Peugeot and Citroën brands, and General Motors have confirmed that they are in talks regarding the future of the US company’s Opel and Vauxhall nameplates in Europe.

Ford introduces Omnicraft parts

ord Motor Company is expanding its customer service division with a new Omnicraft brand of aftermarket parts to cover a range of vehicle makes. According to a statement issued by the company, the parts will be distributed globally. They will be made by Ford’s suppliers and sold at competitive prices through Ford dealerships, the aim being to generate more business for Ford’s aftersales divisions. The move represents the first time in 50 years that the company has added a new brand to its parts line-up. Spokesmen say the addition will allow Ford dealers to service between 85% and 90% of competitive makes. Frederiek Toney, president of Ford’s Global Customer Service Division, said he expected the market for automotive parts, currently worth an estimated $500-million, to grow in the next decade. “We will be pleased if Omnipart is able to capture a 10% to 15% share,” he said. “The brand will be of significant benefit to any vehicle owner who needs parts.” From the Ford perspective, Toney said owners of non-Ford vehicles would have access to quality parts at competitive

14 - MARCH 2017

prices, backed by the company and installed by certified technicians. “Having parts for non-Ford vehicles will allow our dealers to increase their repair and service business, as well as offer an opportunity to convince owners of other vehicle brands to look over new Ford products while they are at the dealership.” He said there were 3 200 Ford dealerships in the United States and 10 500 globally. “Omnicraft will be active in Ford’s major markets around the world,” he maintained. The first wave of parts would include those most commonly requested, such as oil filters, brake pads, rotors, starters and alternators. “Today, 1 500 parts numbers are available with plans to eventually reach approximately 30 parts categories and 10 000 parts. We targeted the most requested parts first to provide our dealers with a solid foundation of inventory.” The new brand – which has already been launched in the US with other markets set to follow throughout 2017 – joins Ford’s established Motorcraft label under which parts for Ford vehicles are sold.

In separate statements issued by the companies – each an exact copy of the other – PSA and GM said that, in 2012, they had formed an alliance involving three projects in Europe which had generated substantial synergies. “Within this framework, General Motors and the PSA Group regularly examine additional expansion and cooperation possibilities. We confirm that we are exploring numerous strategic initiatives aimed at improving profitability and operational efficiency, including the potential acquisition by the PSA Group of Opel/Vauxhall.” The statement added that the companies could give no assurance that an agreement would be reached. In 2009, GM pulled out of a deal to sell its money-losing European division – under which Opel and Vauxhall fall – after predicting that its prospects in the region would improve. Subsequently, it is reported to have lost about $8-billion in keeping the nameplates afloat. Last month the company warned that more losses were expected this year, and observers believe the forecast prompted GM’s CEO, Mary Barra, to seek a solution – just as she did recently in Russia and Australia, when she divested GM of loss-making operations.

Mary Barra, CEO of General Motors, appears committed to ridding the company of loss-making operations

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South Africaâ&#x20AC;&#x2122;s leading international trade fair for the automotive service industry targeting trade visitors from the Sub-Saharan Region

27 â&#x20AC;&#x201C; 30. 9. 2017

Co-located:

3-in-1 Co-located events

27 - 30 September 2017

Contact Us: Show Manager: Robert Kaiser Tel: +27 10 599 6165 e-mail: robert.kaiser@southafrica.messefrankfurt.com Enquiries: Tracy Gounden Tel: +27 79 545 4103 e-mail: tracy.gounden@southafrica.messefrankfurt.com

www.automechanikasa.co.za www.automobil.co.za

NOVEMBER 2016 -

NEWS

NADA looks to the future

ver 200 dealer principals and motor industry representatives last month attended the 2017 Sewells-MSXI/NADA Business of the Year Conference at Kyalami. WesBank CEO Chris de Kock… “the role of motor dealers is changing” The tone of the think-tank was set by WesBank’s managing director, Chris de Kock, who, in an opening address, emphasised the changing role of the motor dealer in the digital age. He said the traditional linear process of buying a car – whose inefficiencies translated into additional costs – was being superseded by internet resources, including social media channels, which diminished the influence dealers had on consumers. “Customer behaviour has changed – there is less reliance on dealerships for detail,” he said. De Kock added that methods of obtaining information on finance packages, too, were changing. “In the UK about 74% of buyers research finance on line before deciding on a model – not after, as was traditionally the case. “What happens in the UK lands in South Africa. We all need to stay relevant – if we don’t adapt to the changes, we could become extraneous,” he warned, giving examples of how integrated, digital approaches to vehicle sales could benefit dealers, banks and customers. In a keynote address, renowned futurist Dr Graeme Codrington warned that a time of deep disruption was approaching. “2016 offered a foretaste of a tough year, with the effects of

16 MARCH 2017

Sewell’s CEO Warren Olsen (left) and NADA director Gary McCraw (right) with futurist Graeme Codrington at the Sewells-MSXI/NADA Business of the Year Conference at Kyalami exponential change beginning to be felt in all industries. Everyone needs to know what’s coming our way – and at what speed,” he said. Codrington added it was imperative for everyone within the motor industry to switch on their radars and engage with disruptive influencers. “Quality control and an understanding of systems affected by change will be vital to survival,” he said. “Driverless cars are coming. They will be legal. They will be more efficient. And they will be safe. In the end, they will

become compulsory. The change will be huge in all aspects of the motor business.” Other leading speakers at the conference included Wayne de Nobrega, CEO of Tracker, Scott Gibson, Group Executive at Digital Practice, part of the Dimension Data Group and Candy Perry, General Manager of Seriti Business Solutions. According to Warren Olsen, CEO of Sewells-MSXI, each of the speakers’ presentations would be made available for download from www.boty.co.za.

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Lamborghini recalls the Aventador

talian supercar maker Lamborghini – owned by the Volkswagen Group – has recalled 5 873 Aventadors and other models worldwide following a directive from America’s National Highway Traffic Safety Administration that, under certain driving conditions, fuel vapour could come into contact with hot exhaust gasses. Among the models affected is the ultra-rare Veneno, which Lamborghini described at launch as a street-legal racing car. Only 12 of the models have been built – three in coupé format and nine as roadsters. In a statement, Lamborghini said the recall was the result of a fire risk which emanated from the evaporative emissions control system fitted to the vehicles, which could cause fuel vapour to ignite if it came into contact with exhaust gasses during particular

NEWS

manoeuvres such as “engine overrevving at idle,” especially if the car was fitted with “a non-approved aftermarket exhaust system” and the fuel tank was full.

In South Africa, Motor Industry Ombudsman Johan van Vreden reports that there is confusion among motorists regarding the submission of complaints related to Ford’s Kuga 1,6-litre derivative, which has been recalled because of an under-bonnet fire risk.

The statement said Lamborghini was unaware of any driver or passenger injuries being reported as a result of the fault. “In order to guarantee customer satisfaction, owners of the vehicles affected are being notified and requested to contact an authorised Lamborghini dealer in order to have the fuel evaporative system upgraded to the latest version,” the statement said.

“Only complaints relating to underbonnet fires experienced by Kuga owners should be addressed to the National Consumer Commission,” Van Vreden says. “All other complaints regarding Kuga models or any Ford product may be lodged with the Office of the Motor Industry Ombudsman at www.miosa.co.za.”

The recall affects Aventadors – and variants like the Veneno – built from May 22, 2011 to December 5, 2016. The new Aventador S and recently-announced Aventador SV are unaffected.

If in doubt about where to lodge a complaint, contact the Ombudsman’s office at 086 116 4672. Van Vreden points out that the ombudsman’s services are available to vehicle owners free of charge.

Scania seeks growth partners Scania is looking to invest in promising, innovative and entrepreneurial companies which can offer the company insight and early access to business models, technology and ideas. Launching Scania Growth Capital in Sweden, the trucking brand’s CEO, Henrik Henriksson, said the aim was to strengthen Scania’s development in the environment in which it operated. “Through Scania Growth Capital, Scania is looking to invest in promising, innovative and entrepreneurial companies. Gaining insight and early access to business models, technology and ideas that can change the environment in which we are active will further strengthen us.” Scania Growth Capital will be exclusively operated and advised by an external

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investment team with extensive experience from venture and growth capital business as well as from the automotive industry. Scania is already active in several partnerships that drive the shift towards sustainable transport systems, both with customers, academia and other tech-companies. The new initiative is intended to reach a segment of complementing companies, giving Scania an opportunity to tap into early development and innovation that is industry-relevant, but outside its own core operations. “It also provides a platform where Scania can contribute with a large ecosystem, as well as broad and deep industry knowledge, which will add great value to the portfolio companies,” says Henriksson.

Venture capital veteran Lars-Olof Gustavsson has been appointed chairman of Scania Growth Capital and also acts as chairman of the external investment company. “In the ongoing technology shifts, it will be essential to select and collaborate with the companies and initiatives with the greatest potential to support Scania’s continued development and growth," he says. “I am looking forward to attracting the most strategic and promising companies to partner with us.” Scania Growth Capital will evaluate investment proposals broadly. They may include companies with products, solutions or services in digitalisation, autonomous vehicles, connectivity, hybridisation, renewable fuels and smart factory. For more information on investment criteria, log on to www.scania.com/group/en/ investment-criteria.

MARCH 2017

NEWS

Demand for collision avoidance systems rises

he world market for vehicle collision avoidance systems was on the rise and was expected to reach $18,97-billion (about R254,60billion) by 2025, according to a study conducted by respected US research house Grand View Incorporated. Releasing its findings, the company said in a statement that increased awareness among consumers and legislators regarding the need for vehicle safety systems – coupled with the incorporation of anti-collision systems in mass produced models – was expected to fuel market growth over the next six years. “Recent developments in sensor technology have enabled automotive OEMs to integrate additional intelligence to achieve the goal of producing an autonomous car,” the statement added. “This fact is also forecast to drive the collision avoidance systems market.”

Other key findings from the report included: • Radar-based collision avoidance systems had accounted for over 41% of the global market in 2015; • The segment was expected to gain market share over the forecast period because the reducing price of radar-based systems had led to increased adoption of the technology by a variety of OEMs; • Adaptive cruise control – which relied on long-, medium- and shortrange radar to automatically adjust a car’s speed to that of a vehicle

•

in front – had accounted for the major share of the collision avoidance market in 2015; The popularity of camera-based collision avoidance systems was expected to experience high growth since governments in many countries had mandated their incorporation into vehicles.

The report said key industry participants in the collision avoidance systems market included Bosch, Continental, Delphi, Denso, Autoliv and TRW.

Volkswagen rejects former chairman’s claim

he Supervisory Board of Volkswagen AG has issued a strong statement repudiating a claim by former chairman Ferdinand Piëch that top management knew that emissions cheating devices had been installed in vehicles manufactured by the company at least six months before the scandal became public. Piëch made the claim in an interview published in a German newspaper. He said that in March, 2015, following a tip-off from an Israeli security company, he had informed Volkswagen’s then CEO, Martin Winterkorn, and members of the supervisory board’s steering

18 MARCH 2017

committee, that he had been told the devices had been installed. The emissions scandal became public knowledge only in September that year, with board members continuing to deny that they had prior knowledge of the cheat software. Following publication of Piëch’s claim, Volkswagen issued the following statement: “The Supervisory Board of Volkswagen AG emphatically repudiates the assertions made by Ferdinand Piëch as reported recently in the media. “A similar account was given by Mr Piëch in spring 2016 in the context of

internal, independent investigations. This account was subsequently examined in close detail by law firm Jones Day. No evidence was forthcoming indicating the accuracy of the allegations, which were classified as implausible overall. “In addition, all affected members of the Executive Committee of the Supervisory Board, acting independently of each other, have unequivocally and emphatically rejected as untrue all assertions made by Mr Piëch. The Board of Management will carefully weigh the possibility of measures and claims against him.”

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NEWS

Leaders from Ford and Argo meet to discuss AI. Peter Randall, Mark Fields, Brian Salesky and Raj Nair

Ford invests $1-billion in artificial intelligence

ord has announced that it will invest $1-billion over the next five years in Argo AI, an artificial intelligence company, to develop a virtual driver system for an autonomous vehicle that it will introduce in 2021. Founded by former Google and Uber leaders Brian Salesky and Peter Randall, Argo AI employs some of the world’s most experienced roboticists and engineers. Making the announcement, Ford’s President and CEO, Mark Fields, said the next decade would be defined by the automation of the automobile. “Autonomous vehicles will have as significant an impact on society as Ford’s moving assembly line did 100 years ago,” he said. According to Fields, technology developed for the project could be licensed to other automotive

20 - MARCH 2017

manufacturers and sectors looking for autonomous capability. The current team which is developing Ford’s virtual driver system – the machinelearning software that acts as the brain of autonomous vehicles – will be combined with the robotics talent and expertise of Argo AI. “This innovative partnership will work to deliver the virtual driver system for Ford’s SAE Level 4 selfdriving vehicles,” Fields said, adding that introduction date of the models was 2021. He said the joining of forces would be aimed at strengthening the commercialisation of self-driving vehicles, since Argo AI’s agility and Ford’s scale combined the benefits of a technology startup with the experience and discipline of the automaker’s autonomous vehicle Carl Icahn programme. development

Salesky said Argo was energized by Ford’s commitment and vision for the future of mobility. “We are at an inflection point in using artificial intelligence in a wide range of applications, and the successful deployment of self-driving cars will fundamentally change how people and goods move,” he said. “We believe this partnership will enable self-driving cars to be commercialised and deployed at scale to extend affordable mobility to all.” The relationship would be complimented by Ford’s Smart Mobility off-shoot, which would plan strategy for self-driving vehicles – including options such as ride sharing, ride hailing or parcel delivery. Ford would have the majority stake in Argo AI and would spread its investment in the company over five years.

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NEWS

op performing dealerships in the General Motors South Africa (GMSA) network have been honoured for the service they provided to Chevrolet, Opel and Isuzu customers in 2016. In his address at the presentation ceremony, Ian Nicholls, President and Managing Director of GM Sub-Saharan Africa, said the awards afforded the company an opportunity to applaud dealers “who go the extra mile to ensure customers are well cared for and remain loyal to our brands.” Top honours for Dealer of the Year 2016 went to: Williams Hunt, Port Elizabeth (major category); Jacksons,

GM’s Dealers of the Year, from left: Trevor Villet, Williams Hunt Port Elizabeth; Kenneth Cupido, CP Nel Motors; Ian Nicholls, President of GM Sub-Saharan Africa; Glynn Crookes, Key Durban; Mark Wilson, Jacksons; Pieter Kruger, Sydfred Motors Queenstown (medium category); CP Nel Motors, Mossel Bay (small category); Sydfred Motors, Matatiele (rural category) and Key Durban (Motor Dealer Association category). Nicholls said that in GM’s network of 131 dealers it was important to

recognise those who consistently exceeded the high standards expected from every department. “They continuously raise the bar for the entire GM network to make our customers’ experience an all-round pleasure,” he said.

‘SA components world class’

esearch, which shows significant performance improvements amongst South Africa’s automotive component manufacturers over the past decade, Dave Coffey, president is enhancing of NAACAM the country’s reputation as a competitive global automotive producer. Dave Coffey, president of the National Association of Automotive Component and Allied Manufacturers of South Africa (NAACAM) says figures released by the South African Automotive Benchmarking Club (SAABC) report are noteworthy. “We need to acknowledge what has been achieved but most importantly the report suggests that difficult targets, previously considered unattainable, can and must be reached,” he said.

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“Many local component manufacturing firms are truly world class, but we have the dual challenge of keeping up with rapidly progressing global best practice while also developing the tail of firms yet to fully adopt fundamental lean practices, which are essential to localisation contracts.” According to the SAABC report, South Africa’s component manufacturers have made strong improvements over the past decade. Such an example is quality improvements. In 2006, customer return rates were 1,208 parts per million, in 2015 this was down to 84 ppm, a gain of 93,1%. “The statistic is telling,” says NAACAM Executive Director Renai Moothilal. “At a time when automotive quality and reliability issues have come to the fore, evidence is being brought to bear that South African component producers are making huge strides in supplying products that adhere to the highest quality standards.”

Other noteworthy gains include a 45% improvement in the time to do machine/ tool changeovers whilst the supply chains’ reliability, measured relative to customer delivery expectations rose by 70%. Referring to the upcoming NAACAM Show, Coffey said the Automotive Industry Conference would include a session purely reflecting on World Class Manufacturing and Best Practices. This would be led by international experts with a global view of manufacturing best practice and foresight of emerging trends. In addition to international experts, leading government and other automotive stakeholders including OEM CEOs and tier one executives would address participants on a range of topical issues. The NAACAM Show is being held in conjunction with the National Localisation Indaba from April 5 to 7 in Durban, and aims to showcase the capabilities of South Africa’s diverse automotive components sector.

MARCH 2017

COVER STORY

he Automotive Production and Development Programme (APDP) – introduced in January 2013 by the Department of Trade and Industry (dti) – gives small aftermarket suppliers and exporters a raw deal, doing nothing to incentivise the businesses. That’s the view of Gerrit Myburgh, Managing Director of CA Components, an aftermarket supplier and exporter of engines and engine components.

Small, non-OEM suppliers and exporters question an apparent lack of incentives offered by Government’s Automotive Production and Development Programme. Ferdi de Vos reports

Situated in Atlantis, near Cape Town, the company – in partnership with the SP Motor Engineers (SPME) group of companies – serves the trucking industry in Southern Africa as a component supplier, manufacturer and distributor of complete new and refurbished diesel engines. CA Components also exports partially or fully assembled new and rebuilt engines to international markets and manufactures and supplies a range of new aftermarket replacement parts as well. These include short blocks, crankcases, cylinder heads, crankshafts, con-rods and flywheels suitable for use in a range of diesel engines manufactured by Mercedes-

22 MARCH 2017

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Development Programme (MIDP), input from businesses such as his were ignored. “This is really upsetting for someone trying to work within the framework of the whole industry and in the spirit of what these incentives primarily were supposed to deliver,” he said. “We are a manufacturer which exports 80% of our products to countries within Africa, Europe and the Middle East region. We employ only local people, but still, in terms of APDP requirements, my company does not qualify for this programme.”

Benz, MAN, Volvo, Scania, Renault and Iveco. Engine assemblies are produced from parts procured locally and internationally and, through SPME, the company also has access to assembly and testing facilities. Myburgh initially responded to a report in the November 2016 edition of Automobil, which examine issues surrounding the APDP from an OEM perspective. During an interview at his company’s premises in the Atlantis Business Park, Myburgh said that as “an aftermarket parts supplier we found the article extremely upsetting”. “While I cannot fault the article from an OEM’s point of view, it doesn’t highlight the fact that the APDP does nothing to assist specialist aftermarket suppliers and exporters. For them this programme is a raw deal.” He said during initial negotiations to establish the structure for a new incentive programme to follow the superseded Motor Industry

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In his view the APDP is flawed as it benefits only suppliers of components and parts to foreign OEMs. “This problem has not been addressed or highlighted in the media, also not by NAACAM and other institutions – not even the RMI.” He said he was disillusioned with regard to the real aims of the APDP. “Initially, I believed the focus of the programme was to grow all aspects of the local automotive industry,” he said. “However, it is clear it was essentially and purposely devised to only protect the OEMs and their suppliers’ interests. “The APDP’s prerequisites should be revised to also assist smaller engine component manufacturers. Admittedly, OEMs form the biggest and important part of the automotive sector – but our company is seemingly quite unique in terms of what we do, and this should be taken into account in the programme.” CA Components manufactures, assembles, refurbishes, services and repairs engines and engine components – not accessories, he pointed out – with a work force of 35 highly skilled local people.

“Locally we have become a leader in the production of medium to large sized gas powered engines, and to date we have exported more than 600 engines. Yet, since we don’t deliver to the OEMs directly, we are disqualified from receiving any APDP benefits…” While the APDP had been well received by the automotive industry in general, Myburgh questioned whether the programme could reach its full potential when specialist SMMEs such as CA Components were excluded, deriving no benefits from it. He pointed out that while the Department of Trade and Industry promoted the advantages offered to the industry under the APDP, CA Components had actually lost benefits that were available to it under the preceding scheme. In his view the APDP should act to extend and diversify the country’s vehicle components supply chain, but this aspect did not appear to be a priority, especially with regard to aftermarket suppliers and exporters. In response, Renai Moothilal, executive director of the National Association of Automotive Component and Allied Manufacturers (NAACAM), explained that the elements driving the APDP initiative were fourfold. Of the four pillars, two – import duties and a vehicle assembly allowance – took the form of rebates while the remaining two – a production incentive and the Automotive Investment Scheme – addressed customs tariffs and cash investments respectively. “These elements are linked to local vehicle assemblers, and therefore not really applicable to aftermarket suppliers,” he said. “For example, the Vehicle Assembly Allowance (VAS) serves

MARCH 2017 -

COVER STORY

would be continuously monitored and that changes to provisions could be made if it was seen as to be more conducive to achieving the programme’s goals.

Gerrit Myburgh, Managing Director of CA Components

as incentive for vehicle manufacturers to reach an annual production of 50 000 units, or to achieve this within three years in order to qualify.” However, with component manufacturers required to be part of the OEM supply chain and attain certain prescribed turnover targets to qualify, non-OEM aftermarket suppliers would by nature of the requirements be excluded, Moothilal said. He added that while provision had not been made for aftermarket component manufacturers, suppliers and exporters, the dti had other incentive and assistance programmes specifically aimed at these types of industry players.

Myburgh, however, pointed out that most of the dti aligned schemes were once-off assistance programmes for a variety of industries, rather than automotive industry specific annual incentives.

“This is not what has made Automechanika one of the biggest exhibition franchises in the world. It is however one of the reasons why a show such as Automechanika Frankfurt is fast becoming less interesting for its exhibitors.”

In his opinion his business, and other similar small engine and drivetrain component manufacturing companies, formed part of the automotive cluster “and therefore should be acknowledged as such.”

Furthermore, he said, much of the technology and advanced products on display – mostly from OEMs – were not relevant to the South African market, and therefore reporting on it was of dubious value to local consumers.

In his view: “We are forced to abide by the decisions made by the Motor Industry Bargaining Council, but yet we are excluded from the APDP because we’re not seen as being part of the industry!

“South Africa had a pavilion, sponsored by the dti, at the show in Frankfurt, yet there was no mention of this. Most of the exhibitors were RMI members, but the pavilion, admittedly hidden away in a lesser hall, was not even mentioned.

“We contribute towards this sector not only by employing skilled auto technicians, fabricators and craftsmen or by developing expert skills, but also by exporting locally manufactured products.

“We have supported the Frankfurt show for 16 years, but lack of coverage and exposure, as well as exorbitant fees, means last year’s was our last. I would rather attend Automechanika Dubai, since there the organisers at least ensure that all exhibitors are promoted.

“CA Components has a proud history in automotive manufacturing dating back to 1981 – so why can we not be recognised as part of the auto industry and, in the spirit of the APDP, be allowed to share in the benefits?” he asked.

These included the Export Marketing and Investment Assistance (EMIA) programme, the Manufacturing Competitiveness Enhancement Programme (MCEP), the Sector Specific Assistance Scheme (SSAS) and the Strategic Partnership Programme (SPP).

Myburgh also commented on some other challenges facing smaller enterprises, including the lack of media exposure for South African exhibitors at overseas shows such as Automechanika Frankfurt in Germany.

Also, said Moothilal, the dti had made it clear that the APDP’s effectiveness

“While the exhibition is mostly made up of foreign exhibitors who service

24 MARCH 2017

the aftermarket, most media attention concentrates around the OEMs and OEM suppliers – in this case mostly German OEMs.

“As a local manufacturer I am grateful for the dti in helping us to exhibit at these events,” he added. Last year, Automechanika Dubai attracted 2 107 exhibitors from 58 countries, with over 30 000 visitors from 138 countries attending the show. Myburgh appealed to local trade publications to report “in accordance with the needs and interests of local businesses, and also RMI members”, particularly now that many smaller companies in the industry were under pressure due to the uncertain economic climate.

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BUSINESS

Daimler Financial Services has confirmed its investment in a new smartphone app that could revolutionise the way vehicles are financed and leased. Reuben van Niekerk reports

linear process of buying and financing a car, Daimler revealed that it had bought a share of US digital finance company, AutoGravity. Established in late 2015 at Irvine, California, AutoGravity is credited by Daimler with the development of a customer comparison app designed to simplify the process of buying and financing vehicles. The app is capable of offering up to four tailored offers within a few minutes – featuring multiple vehicle brands and models – enabling various financial services providers and automotive manufacturers opportunities to reach consumers and conclude vehicle financing and leasing deals via smartphones. Klaus Entenmann, Chairman of the Board of Management of Daimler Financial Services AG

aimler Financial Services is considering the roll out of a smartphone-based finance app in world markets following successful trials of the application in the United States. In a week that Chris de Kock, CEO of Wesbank, announced at the SewellsMSXI/NADA Business of the Year Conference at Kyalami that consumer behaviour was changing the traditional

28 MARCH 2017

In conjunction with Mercedes-Benz Financial Services, AutoGravity initially piloted the digital financing platform in California in mid-2016. Since then, additional finance providers have been integrated within the app and AutoGravity has extended the offering to include leases and used-car financing. “In AutoGravity, we see a new star rising in the digital world. In real time, customers are able to find the best financing deals for the vehicles they

want to buy. The comparison app acts as a digital interface between the customer, the dealership and various financial service providers,” explains Klaus Entenmann, Chairman of the Board of Management of Daimler Financial Services AG. Using a smartphone, customers are able to browse and select vehicles from different brands and dealerships and then choose one of up to four finance offers. According to Entenmann, AutoGravity meets customer requirements in the swiftly growing online automotive market for fair, transparent and individually tailored offers which can be obtained quickly and easily. The app operates in the United States via iOS, Android and Web platforms. In the pilot project phase, it was downloaded more than 150 000 times in California, leading to the decision to roll it out in 46 states, with global implementation under consideration. Making the announcement last month in London, Bodo Uebber, a member of Daimler’s Board, said the company’s investment in AutoGravity represented a strategic step in terms of preparing for sales, financing and leasing of vehicles through digital channels. “We believe AutoGravity and its technology have the potential to revolutionise the sector for online

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Bodo Uebber, Member of the Board of Management of Daimler AG

financing while, at the same time, offering a digital platform for other financial services providers and automotive manufacturers,” he said. Entenmann added that the investment in AutoGravity underlined Daimler Financial Services’ pioneering role in the digital financing and mobility services sector. “Our launch of car2go in 2008

marked the beginning of present-day competition in car sharing. Our mytaxi app is currently Europe’s number one e-hailing company with more than six million subscribers in nine countries.

a suite of digital tools for a more innovative financing and mobility experience,” he said. • Daimler Financial Services concluded 2016 with 1,6-million new financing and leasing contracts worth a total of $64,97-billion. The total value of all new contracts rose by 7% compared with the figure for 2015. The sales and leasing activities at Daimler Financial Services supported approximately half of all new vehicle sales made by Daimler’s automotive divisions.

“By announcing the acquisition of electronic payment provider PayCash this year and investing in AutoGravity, Daimler now strategically adds digital services to its financing portfolio. “After being in the auto financing business for more than 50 years, our goal is to continue to offer customers

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As a proud member of the Retail Motor Industry Organisation (RMI), the Engine Remanufacturers Association (ERA), comprises the cream of South Africa’s automotive engineers who are dedicated to providing customers with the best advice, finest components and highest quality workmanship…

his year has started off at pace for ERA, setting the scene for trading months to come and highlighting the relevance of a number of significant projects the Association is currently rolling out to members. ERA’s National Executive Committee recently approved a national industry skills development initiative targeted at the motor industry’s Sector-3 businesses. The initiative encompasses an apprentice training pilot programme that will be facilitated on behalf of the Association by Almo Engineering, based in Virginia, Free State. The company has already obtained the necessary approval and established facilities to train 10 automotive machinists and 10 engine fitter apprentices and to

30 - MARCH 2017

prepare them for trade testing. Almo Engineering will be the host employer and participating ERA members will be the lead employers. It is a given that similar projects will be established in other parts of the country, boosting ERA’s efforts to address skills availability throughout South Africa. The apprentice pilot project will enhance the current Competency Based Modular Training System (CBMT) or learnership training system. At the same time, the programme will enable the development of courseware and syllabi required for new Occupation Qualification apprenticeship curriculums and programmes that have been developed by ERA and other industry role players in conjunction with the merSETA.

The trades concerned currently conform to special training conditions and exemptions that involve workplace learning and assessments. Formalised training within our sector is a future objective for ERA and the programme will provide an opportunity to achieve this goal. In order to preserve the longevity of not only the engine rebuilding industry but the automotive aftermarket repair industry, it is incumbent on all business owners to embrace the concept of future availability of skills. Despite the well-publicised fact that the average age of skilled workers in South Africa is ever increasing – which should be a warning flag as to what the future holds for the industry – the more important

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reality is that, where business embraces the challenge of supply and demand of skilled workers and resources by providing training and upskilling, return on investment will be enhanced. The fact is that skilled personnel will be more available and in a lesser position to hold businesses to ransom on the basis of shortage of skills. It goes without saying that the sooner business takes up the challenge and re-invests in itself by means of improving the supply and availability of skilled staff, the sooner the ROI will realise its goals for that portion of the businessâ&#x20AC;&#x2122;s balance sheet. Development of a training programme such as that on which ERA has embarked has been fostered by lengthy discussions, volumes of consultations and deep research into the applicable requirements to deliver on expectations of members as well as those of trainees and learners. Workshop profitability ERAâ&#x20AC;&#x2122;s members have made massive investments in both time and money with the express purpose of achieving a return. With this in mind, the Association is addressing the ongoing challenge of how

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to measure the effectiveness of workshop staff performance by supporting initiatives such as ESSENTIAL MEASURES to Improve workhop profitability. Benefits to the South African automotive community of the strategic partnership between the Institute of the Motor Industry (IMI), with global headquarters in the United Kingdom, and the RMI in South Africa, have been demonstrated in a number of initiatives that include knowledge sharing and raising awareness around the advantages of apprentice and staff training. IMI research in the UK has shown a proven Return on Investment for employers from automotive apprentice training which, in turn, has resulted in the building of an easy to use and free on-line calculator. Employers can use the calculator to estimate a return for employing an apprentice before he or she joins the business. (http://www.theimi. org.uk/graph). Recognising the impact of this work in the UK, the merSETA commissioned the IMI as a research partner to undertake a similar project for the benefit of the South African automotive community.

The basic criteria for employer participation in the research, to build a South African on-line ROI apprentice calculator, were training CBMT registered apprentices and rigorous measurement of workshop staffâ&#x20AC;&#x2122;s performance through attended, worked and sold hours. Fundamental Workshop Ratios The importance of accurately recording attended, sold and, especially, worked hours cannot be overemphasised. In this short report we demonstrate, with the use of a simple diagram, how the data combines and interacts in the calculation of the three fundamental workshop ratios: Efficiency, Utilisation and Productivity. Understanding how these ratios interact can significantly influence the profitability of a workshop. We hope this will assist the understanding of young trainees and apprentices and provide a useful communication tool for workshop managers. How the ratios work A well-managed workshop must maximise utilisation of each productive person, which requires their worked hours to be a high proportion of their attended hours (W/A). In turn, the jobs must

MARCH 2017 -

RMI ASSOCIATION generate a high number of sold hours compared to worked hours to optimise efficiency (S/W) – how quickly they work.

Productivity can just as easily be calculated by multiplying utilisation by efficiency (85% of 106% = 90%). Try the calculation using your own numbers and, if you don’t know the actual data on which to base the sum, you have a good reason to check out why not…

Efficiency should be optimised rather than maximised in order to maintain quality. Therefore, maximised utilisation and optimised efficiency will drive high productivity (S/A). Try it for yourself using your data. For example, referring to the graphic, if an artisan produces 34 worked hours from a 40-hour (attended) week, then his utilisation (W/A = 34/40) is 85%. If he manages to sell 36 hours then his Efficiency (S/W = 36/34) is 106% and therefore his productivity (S/A = 36/40) is 90%.

We hope to bring you future articles highlighting the potentially severe impact on profitability resulting from the incorrect recording of workshop times and not keeping a handle on lost time. In the workshop, time is literally money – so accounting for it is vital. Dr Paul Spear, ROI & Research Manager, Institute of the Motor Industry and Louis van Huyssteen, RMI Project Leader: merSETA ROI Apprentice Programme

Celebrating 70 years of success

Michael and Jason Colman… upholding family traditions

recision engineering, superior customer service and satisfaction, and a strong work ethic have made ERA member Colman’s Engines a successful and reputable business for 70 years. Established in 1947 in Johannesburg by the late Barney Colman, the company has remained in the family and is now owned by Michael Colman, who runs the business with his son Jason. Both are qualified automotive machinists and have extensive knowledge of the motor industry.

32 - MARCH 2017

Appointed in 1960 as the South African distributor for Perkins engines and parts, Colman’s is still a market leader in bringing the UK-based brand’s products to the country. The business not only sells engines, but also overhauls and remanufactures them, having established an enviable reputation over the years for adhering to the highest standards of precision and quality.

the continued sale and remanufacturing of high quality, reliable and competitively priced products and services.”

“Every customer is treated as part of the family,” says Michael, who prides himself on meeting the needs of clients through superior service, innovation and commitment. It was in July, 1960 that the company was featured in Automobile, then the official journal of both the South African Motor Trade Association and the South African Motor Industry Employers’ Association, of which Colman’s Engines was a member. The pictures used to illustrate this report are from that edition. Says Michael: “Just as in Barney’s day, Colman’s Engines remains committed to

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Pegasus wheel bearing kits are manufactured from high quality bearing steel and are packaged in a new design, user friendly, high quality box. They are tested with “state of the art”, precision equipment that measures: • Roundness • Hardness • Metallographic composition • Contact angle • Roughness profile • ABS measuring In order to ensure that these bearings all perform to reduce rotational friction, and to support radial and axial loads. These bearings are manufactured for OEM use

CH4992

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MAY 2016 -

RMI UPDATE

Viv Corinaldi, the Acting Director of the South African Petroleum Retailers' Association (SAPRA), offers insights into the business of fuel retailing based on his 35 years of experience in the industry existing fuel retailers often ask to measure the potential and current feasibility of retail service stations. After more than 35 years in fuels retailing in Southern Africa, I have come to the conclusion that there are no quantum leaps in this business. This is especially true for our regulated petrol market where there is no price advantage. This, of course, does not apply to diesel but, for the purposes of this report, I will focus on petrol as the dominant product.

Many service stations are pumping more or less the same volumes today that they were pumping five and even 10 years ago. In fact, volumes are declining at a large number of sites. There are always exceptions, but the reality is that it is the so-called Establishment Criteria that largely determine a service station’s volume and its potential success or possible failure.

Is it convenience, location or service? Or is it the fact that the needle on the vehicle’s fuel gauge is registering E? These are the questions that many prospective and

Calculating volume potential What are the establishment criteria of a service station? Are they the factors and calculations that oil companies and property developers use to determine the volume and feasibility of a new service station? These factors include

Viv Corinaldi, acting director of SAPRA

hat sells petrol and what are the major considerations when deciding where to develop a new service station? What are the motivating and deciding factors that influence a motorist when he or she decides where to fill up?

34 - MARCH 2017

location, brand, facilities and operations. In calculating the volume of a service station, a tried and tested industry model is used where a number of facts and assumptions are combined to project potential. The projected fuel volumetric through-put of a new site is calculated as follows: • The number of vehicles passing the site per day (VPD), multiplied by • The assumed capture rate (CR) or % of vehicles that will drive onto the site and buy petrol, multiplied by • The assumed average transaction value in litres or average fill (AF), multiplied by • The number of trading days (TD) in a month, given the site location and trading area. Thus, by example, 15 000VPD x 3%CR x 30ltAF x 30TD = 405 000 litres per month projected volume. Service stations are totally dependent on traffic volumes which pass the site on a daily basis. Oil companies and property developers use sophisticated traffic engineering to count and project traffic volumes on the road infrastructure to determine a site’s feasibility. But they

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have no influence on the actual number of vehicles passing a site, as this is a given. Moreover, studies of sites with similar characteristics can determine the typical average fill but again this is normally a given and cannot be influenced. And most months boast a maximum of 30 trading days. In other words, traffic volumes, average fills and trading days are a given, largely known, calculated or assumed. The capture rate is, however, influenced and determined by location, brand, facilities and operations. Many surveys and studies have been done to calculate capture rates, which differ from site to site depending on location. Sites in towns and central business districts generally have capture rates of between 2% and 5%, with access to the site for passing traffic a major contributor. Location Location – which can determine up to 70% of a site’s volume – is the key to success for most service stations. It cannot be over-emphasised how important this factor is. • Physical location – is the site located

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on a highway, is it in the CBD or is it suburban, in a shopping centre or industrial area? • Is the site located on work-bound or home-bound traffic flows and is it a mid-block or a corner site? • What is the traffic speed and are there traffic interruptions – traffic signals close to the site? • What is the quality of accessibility and the ease of driving onto and leaving the site? This is a key factor in determining the success of a service station. • How visible will the site be to approaching and passing traffic during the day and at night? • The site’s layout, design and configuration – given land size and dimensions – are important considerations. • The site level and whether it is above or below road level must also be factored in. • The road layout, number of lanes, access to traffic travelling in all directions and planned or anticipated road changes must be carefully considered. • The trading area’s demographics and the overall current and potential economic conditions in the trading area are of vital importance.

• The number and size of competitor sites in the trading area is always factored into the equation. Brand Brands, including that of the oil company and other sub- and franchise-brands, contribute about 10% to a service station’s volume. There are many views on brand loyalty and substantial research has been done in this regard. When talking about brand we include: • Strength of brand loyalty related to brand values, and faith in the brand; • Brand awareness and level of advertising, promotions and marketing initiatives; • Perceived product quality as a result of brand promise; • Visibility of the brand – oil companies with large networks are more visible; • Sponsorships and Community Social Investments. Facilities Service station facilities have improved and become very sophisticated in past years. Many sites have morphed into small shopping malls. The reality, however, is that a service station has a forecourt and some buildings with retail stores and

MARCH 2017 -

RMI UPDATE revisit a site and may advise others not to do so. The site gets a poor reputation and volumes decline. In many cases the retailer does not realise that this is happening because motorists don’t complain -- they simply don’t come back.

product suppliers – no stock outs; • The quality of the food and coffee offer and overall stock levels in the c-store; • The quality of housekeeping/cleanliness and overall service levels; • The visibility and availability of the retailer to address queries and complaints; • The quality and value of national and local promotions;

shops – and, in most cases, this is what motorists expect. When talking about facilities we include: • The quality of the overall site design and attractiveness; • Other retail businesses on site, including a convenience store, a car wash, restaurants or fast food outlets; • Accessibility of ablutions and rest rooms and the quality thereof; • Sufficient and safe parking; • The quality of the signage and general maintenance thereof; Operations Operational efficiency and excellence should be in place without an issue and again, each is an element that motorists always expect to see and experience when driving onto a service station forecourt. When talking about operations we include: • The quality of the support from all

36 - MARCH 2017

In addition, a retail site owner must consider what he or she can do to maintain existing volumes and find new and innovative ways to build capacities. It is a good idea for a retailer to do a site evaluation and look for areas that can be improved. Generally there are two categories that can be evaluated and considered – volume destroyers and volume builders. Volume destroyers There is always some growth in the market but many service stations lose more volume than is added to the site, so that the net effect is normally no growth or volume decline. There are many factors that contribute to this but the following are considered the major influencers: • Poor service levels and a general apathy towards customers; • Untidy and dirty forecourts and buildings; • Poor and dirty ablutions and rest rooms; • Continuous stock outs; • Wrong fuel transactions. Motorists experiencing these poor operational efficiencies are less likely to

Volume builders There are a number of steps that a fuel retailer can take to develop new customer bases, increase the capture rate and grow volumes. These include: • Improve some of the establishment criteria such as visibility and accessibility; • Community involvement including free coffee for security services, a water point for runners and cyclists and a safe haven for children; • Business collaboration including a courtesy visit to all businesses in the immediate trading area, and membership of local business associations and forums to raise personal visibility; • Bakery and c-store goods delivery service to selected customers; • Install additional ATMs; • Visit schools, churches and other societies and find ways to collaborate and support their causes; • Meet and greet every single customer and get on first name terms with all of them; • Become the community hero and the first choice respected and trusted service station business in the area. Conclusion A famous oil company executive once said that there were 10 things that determined the success of a retail site. “Nine of them are location” he said. “The jury is out on the tenth one but guess what – we think it’s also location!” Fuel retailing is a complex business with many factors that determine and contribute to a service station’s volumes. The facts and my years of experience, however, show that the major driving influences and contributors remain location, brand, facilities and operations in that order.

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“Abandoned Solutions offers a LEGAL, COST FREE solution TO ALL DEALERS/WORKSHOPS/PANELSHOPS” BACKGROUND

SOLUTION OFFERED

•

We will: • Clear any vehicle within 12 to 16 weeks so that these vehicles may be removed from your premises, processed and sold by ourselves as salvage. To defray some of the “sunk cost” already incurred by the dealer.

•

• •

Abandoned Solutions is a company focused on addressing the issues associated with the salvage and recovery of vehicles abandoned at dealerships and workshop outlets. South Africa’s precarious economic and socioeconomic environment, coupled with high household debt-to-income ratios has left mass SA households in poor financial health. Many businesses are seeing significant changes in consumer buying behaviour; among these is a growing trend to abandon vehicles at dealer workshops. In many instances the cost of repairs, vehicle debt and any other related charges exceeds the value of the vehicle consequently fueling the “abandoned vehicle” phenomena.

PROBLEM DEFINITION

Because of this increasing “Abandoned vehicle” phenomena, dealerships are facing the following issues: • Vehicle floor and or yard space is being consumed by an ever increasing inventory of unproductive abandoned vehicles. • Abandoned vehicles are being stripped for spare parts, as well intended mechanics look to reduce maintenance costs and improve turnaround times on vehicle repairs. This in itself has the potential to introduce quality issues because of the practice of using “used parts”. Similarly the dealership is exposed to increased liability should the original owner collect or request that their car be returned in the same condition as when originally left at the dealership. • Abandoned, stripped, damaged vehicles detract from overall dealership standards and place pressure on relationships between dealers, dealer principles and the OEM. •In many instances the time and associated legal costs required to hold abandoned vehicle owners accountable exceeds the value of repairs and or the value of the vehicle.

•

We at Abandoned Solutions offer a quick, cost free solution to these problems.

We will: – Cover the legal costs associated with clearing any vehicle slated for salvage. – Indemnify the dealer against any legal claims arising from any salvage activity. (A written report supported by appropriate clearance documentation will be provided to the dealership prior to final removal and salvage of any said vehicle.) – Return a minimum of 15% of the salvage value, (net of legal and clearing costs), to the dealer. • As an additional service, Abandoned Solutions can offer FREE temporary storage for abandoned vehicle should this be required during the clearing / salvage process. Contact Robert Henderson on 011 450 0550/0004 or 073 016 8424 Fax: 086 662 1148 / E Mail: rob@abondonedsolutions.co.za Address: Office A1 Mediterranian Conference Centre, 72 Concorde Road East, Bedfordview

ECH COLLEGE AD 210x130 2/15/17 8:30 AM Page 3 C

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CY CMY

OCTOBER 2016 -

RMI UPDATE

A will to

SUCCEED

ongratulations to Luis Julio “Derick” Mathebula, a general worker at the RMI’s Pretoria office, who recently successfully completed his Adult Basic Education and Training (ABET) Level-3 course in English. He will now progress to the final level, ABET Level-4. Pieter Niemand, General Manager at the Pretoria office, says Derick excelled in all areas of his subject and has set his sights on furthering his studies. “Achieving ABET Level-3 wasn’t a walk in the park but Derick’s sheer determination to succeed carried him through.” Pieter paid tribute to colleague Attie Serfontein, the Northern Region’s Consumer Affairs Consultant, for his support and help in coaching Derick through the course, which is run by Triple E Training.

From (left): Attie Serfontein, Derick Mathebula, Pieter Niemand, and Jan Schoeman. (Right): Derick's certificate

Crystal Houston, Triple E’s sales ambassador, congratulated Derick on his achievement and thanked the RMI’s mentors for their commitment in helping the learner to reach his goals. Derick said that once he had completed ABET Level-4, he would turn his attention to maths – another of the ABET programmes run by Triple E Taining.

AA calls for vehicle safety ratings

s Europe marks the 20th anniversary of Euro NCAP, the Automobile Association of South Africa says the occasion offers a unique opportunity to highlight the need for improved safety testing of cars locally. Calling for the introduction of testing measures that provide a scale of safety ratings for all new vehicles sold in South Africa, the AA said in a statement that it should be mandatory to display the results on vehicles at points of sale. “Local consumers rarely have access to information on the safety ratings of the cars they are buying. For us, it would be critical that stickers be placed on windscreens of vehicles telling buyers what the ratings were of those particular models. The method would emulate the way emissions ratings of vehicles are displayed, and would allow consumers to make informed decisions about the safety

38 - MARCH 2017

aspects of vehicles they intend to buy,” the AA said. According to Euro NCAP, more than 78 000 lives have been saved since it implemented safety tests 20 years ago. In that time the organisation has tested about 1 800 cars and has published more than 630 safety ratings. “The first tests exposed safety failings in top-selling family cars, forcing a fundamental rethink of the way vehicles are designed. “Twenty years on, nine out of 10 cars sold in Europe have an NCAP rating and, in terms of safety, the motor industry actively supports the development of new requirements for top ratings,” a spokesman for the organisation said. “Euro NCAP has given millions of consumers the knowledge and

confidence to choose the safest cars possible. We want to ensure that roads get even safer in the next 20 years – not just for car occupants, but for all participants in traffic. “We already test many more aspects of a car’s safety than we did when we started in 1997, and that is set to continue. Next year, we will test vehicle systems that recognise and avoid crashes with cyclists, and we’re lining up a very challenging roadmap for 2020 to 2025,” the spokesman said. The AA said: “Safety on South African roads remains elusive; our road fatality statistics are proof of this. “A key pillar in dealing with the issue is to make sure motorists drive safe vehicles, and we believe the introduction of a ratings scale locally will be a step in the right direction.”

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For WorldSkills hopefuls, the road to the finals in Abu Dhabi started last month

he South African finals for all WorldSkills categories including the three automotive categories was held last month at the Durban International Convention Centre. Candidates who were successful in the various regional competitions competed for an opportunity to represent South Africa at the finals. The RMI is at the forefront of a campaign to champion automotive trade skills among the country’s youth and the Organisation’s involvement in WorldSkills forms a significant part of that strategy. The RMI partners with like-minded industry associates to select and prepare a team of apprentices to represent South Africa at the WorldSkills Finals, which are scheduled to take place in October in Abu Dhabi. Before travelling to Abu Dhabi, they will receive guidance and undergo tutoring from experts in particular fields so that they can be adequately prepared for the finals.

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In the automotive sector, artisans compete in the Car Painting, Autobody Repair and Automotive Technology skills divisions. In the Autobody Repair category, contestants had to demonstrate their skills in paintless dent removal as well as the patching and welding of sheet metal panels. In the Car Painting category contestants competed by preparing and repainting body panels such as doors.

There is no doubt that South Africa suffered from a shortage of skills – especially in the automotive sector – competitions like WorldSkills are important from a development perspective. The competition allows artisans to measure themselves against their peers, see how they shape up, learn in the process and ultimately improve their skills. They can then take these back to their workplace and pass their knowledge onto colleagues in the workshop.

Contestants in the Automotive Technology category completed a number of tasks The competition would not have been encompassing a range of components that included an engine block, differential, cylinder possible without the support of South Africa’s automotive aftermarket. head, gearbox, steering box and EFI unit.

MARCH 2017

RMI UPDATE

Partinform kicks off the year in Benoni

he popular Partinform trade shows kicked off its 2017 tour last month at the Benoni Country Club.

The event was well attended with nearly 100 representatives from the automotive industry eager to browse the stands and interact with Partinform members. The show gave those involved in the automotive aftermarket an opportunity to communicate and network with customers and role players in the sector. The Benoni event promoted the advantages of using of good quality branded automotive parts, with representatives on hand to inform visitors about new products.

Gideon de Klerk, chairman of Partinform

Gideon de Klerk, chairman of Partinform, said though members saw the benefit of having Partinform shows around the country, the association would not forget the important role played by Gauteng in promoting quality aftermarket brands. Each Partinform trade show is sponsored by four Partinform member organisations this time round it was the turn of ATE, Federal Mogul, Bosch and First National Battery. As has become popular custom, a quiz show was held to great applause as the contestants were asked questions relating to the brands on display. Finalists received a selection of gifts from the sponsors. Look out for Partinform in your area as the event provides a great opportunity to network with fellow RMI members and business owners; communicate with parts suppliers and ensure that you stay up to date with the latest technology as it rolls out into the aftermarket arena. The RMI is proud to be associated with Partinform and recognises the hard work put into each show by the sponsors, members and organisers.

40 - MARCH 2017

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NOVEMBER 2016 -

RMI UPDATE

Skills count for B-BBEE scorecard

he Skills Development element, as set out in Code series 300 of the amended Codes of Good Practice for B-BBEE, measures the extent to which employers carry out initiatives designed to develop the competencies of Black employees and Black people internally and externally. Skills Development is a “priority element,” which means that any business measuring its compliance on the B-BBEE scorecard needs to achieve a sub-minimum of points for Skills Development, failing which the overall B-BBEE Level of Compliance of such a business will be discounted by one level.

The following criteria must be fulfilled before the measured entity qualifies for any points on the Skills Development Element scorecard: a) Workplace Skills Plan, an Annual Training Report and Pivotal Report which are SETA approved; and b) Implementation of Priority Skills programme generally and, more specifically, for black people.

Therefore, should a business measure its overall compliance on the B-BBEE scorecard and for example, achieve 56 points on the scorecard, such a business will be regarded as a Level 7 B-BBEE Contributor.

Apart from scoring most valuable points on your B-BBEE Scorecard, the development of employees’ skills and competencies should be seen as a win/ win situation because well-structured training will: a) Increase productivity levels; b) Increase motivational levels; c) Increase the quality of service levels; d) Enable you to claim back a percentage of the skills levy that you pay over to SARS; e) Enable you to claim back a percentage of your expenditure on approved pivotal training; f) Qualify you for a discretionary grant from the SETA in respect of registered apprenticeships; g) Qualify you for a discretionary grant from the SETA in respect of registered learnerships; h) Qualify you for an Income Tax Rebate from SARS in respect of learners and apprentices whether employed or unemployed; i) Increase your opportunities to promote well-trained staff into supervisory and managerial positions.

However, if such a business did not achieve the subminimum points in Skills Development, the Level 7 will be discounted to Level 8.

In view of the increasing importance of skills development in general and more specifically in terms of B-BBEE, the RMI4BEE Service offering now

The sub-minimum requirement for Skills Development is 40% of the total weighting points of the Skills Development scorecard. In other words, an entity must attain at least 40% of the total points available. • Eight points out of a possible 20 points (bonus points excluded) in respect of large entities – businesses with an annual turnover of more than R50-million; • Ten points out of a possible 25 points (bonus points excluded) in respect of qualifying small entities – businesses with an annual turnover of less than R50-million but more than R10-million.

incorporates advice, guidance and assistance with all aspects of skills development. This includes the following which will be needed on the date of verification: • Documents required to be submitted by the Measured Entity to the SETA’s and to the South African Revenue Services to determine compliance with the Skills Development Act and Skills Development Levies Act; • Existence of proof that the Measured Entity has a Skills Development Facilitator that assists the Measured Entity, (whether internal or external); • Proof of registration from the relevant SETA confirming the Measured Entities registration; • If the Measured Entity is an accredited workplace skills provider, obtain relevant accreditation certificates issued by the applicable SETA; • Proof that the Measured Entity has submitted the annual training reports and the Workplace Skills Plan to the relevant SETA; • Proof of the Measured Entity’s programmes implemented to develop priority skills generally and specifically for black people; • Proof from the SETA or other institutions (where applicable) by way of an approval letter of a specific learnership or apprenticeship programmes; • Determine whether legitimate expenses are allocated to Skills Development expenses by obtaining sufficient and appropriate evidence on whether learning programme expenses are evidenced by an invoice or appropriate internal accounting record.

Johan Coetzee RMI4BEE 086 176 4233

42 MARCH 2017

www.automobil.co.za

RMI UPDATE

Autoliv SA scoops excellence award The AIDC has congratulated one of its partners, component manufacturer Autoliv SA, on receiving the coveted JIPM TPM Excellence Award for 2017

he AIDC’s partnerships with automotive component manufacturers are going from strength to strength. The organisation is proud to congratulate Autoliv South Africa on being the recipient of the coveted 2017 Japan Institute of Plant Maintenance TPM Excellence Award. Since 1964, the JIPM has recognised companies around the world that display excellence at all levels in manufacturing businesses. The award focuses on implementing methodologies from lowestlevel worker to top executives – all of who must be actively involved in TPM activities – that reflect concrete results. Thus, being the recipient of the TPM Excellence Award demonstrates 100% commitment to efficiency and teamwork from all persons within the company, along with bottom-line results to show for it. Autoliv SA is only the second local company in history to receive the award, and the first in the automotive sector in South Africa. The AIDC partnered with Autoliv SA in 2013 to form one of the first parts of the AIDC TPM cluster. The company received facilitator’s training in October 2013 and, following application of TPM methodologies, launched its programme in December 2014. Autoliv applied to be considered for the Excellence Award in January last year – and passed the first stage assessments in July. The final assessment was done in January this year – and the company passed with flying colours. Throughout the process, the AIDC played a prominent role in the training, education and implementation of TPM at the Autoliv plant.

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Front (from left to right): Stefan Koekemoer, (Autoliv SA TPM Coordinator); Mark Heering, (Autoliv SA AM Pillar Leader); Dr UK Chatterjee (TPM Consulting Company,India); Prof Yoshiro Fukuda (JIPM Lead Assessor); David Kretschmer (Autoliv SA MD); Prof Hisayoshi Matsuyama (JIPM Assessor); Mr Rickus Lubbe (AIDC TPM Project Manager)

Because of the extremely stringent requirements of the TPM Excellence Award, it is one of the most globally coveted and recognised awards in manufacturing. It is an extraordinarily tough award to earn, but one that leads to very visible results.

ceremony later this month. The ceremony is an opportunity to demonstrate to international industries that South Africa is not merely a low-cost manufacturing environment, but rather one that is on par with global best practices and offers incomparable value to OEMs.

Though many South African companies have implemented TPM over the years, none have been able to achieve the success and results that the AIDC and Autoliv’s SA partnership has yielded. The AIDC has been key and pivotal in the company’s success story, which makes the organisation the first to have the know-how for support, training and implementation of TPM in companies aimed at taking them up to Excellence Award level.

As the AIDC, we can only hope to provide further assistance to more companies seeking to implement global best practices in manufacturing to get them to world-class levels of efficiency and competitiveness.

Autoliv SA representatives will travel to Kyoto, Japan, to attend the JIPM awards

ulian Pillay, newly appointed director of NAZA

“The AIDC values the commitment shown by Autoliv’s managing director, David Kretschmer, and his team to ensure successful implementation and completion of this programme. Without his leadership it was not going to be possible to achieve this prestigious award” says Nkumbuzi Ben-Mazwi from AIDC.

MARCH 2017

RMI UPDATE

This year looks to become a brighter one for South African industry, says Dr Raymond Patel, CEO of merSETA

wo nuggets of information released at the end of January show that 2017 is gearing up to be a positive year for South Africa’s manufacturing industry.

in the industry, plugging skills gaps that otherwise would have left big technical holes in South Africa’s automotive, motor retail and manufacturing, plastics, new tyre and engineering industries.

The first was a statement by the National Association of Automobile Manufacturers (Naamsa) which said: “For the first time in 14 months, the new car market registered an increase on the corresponding month of the previous year.

Minister of Higher Education and Training Dr Blade Nzimande’s decision to reestablish the SETAs for a further two years – as announced in December last year – represents a vote of confidence in the work being carried out by this SETA and many other skills development agencies.

“In the event, the January 2017 new car market at 36 794 units reflected a fairly substantial improvement of 1 661 cars, or a gain of 4,7%, compared with the 35 133 new cars sold in January last year.”

Though the status quo remains, it will not be business as usual at the merSETA. The National Skills Conference, which was successfully hosted in 2009 and 2013, will take place this month at the St George’s Conference Centre in Irene, Pretoria.

The second gem came from the ABSA Purchasing Managers’ Index, which edged above 50 for the first time since July, 2016. Comment suggested that the manufacturing sector had started the year on a relatively solid footing.

The conference is hosted by the National Skills Authority, a statutory body that provides a range of skills development advice to the Ministry of Higher Education and Training and other stakeholders on a number of key higher education and training issues.

The PMI, compiled by the Bureau for Economic Research (BER), rose to 50,9 in January, up from 46,7 in December, 2016. According to the BER’s interpretation: “A value of 50 indicates no change in the activity, a value above 50 indicates increased activity and a value below 50 indicates decreased activity.” These statistics really are gems since they serve to boost our confidence in the country’s ability to rise above the economic doomsday cacophony. Since its establishment, the merSETA’s annual output of qualified artisans and learners has averaged 20 000 a year.

44 MARCH 2017

More than 250 000 artisans, learners and specialists have successfully passed through the organisation’s doors. Its highly successful partnerships with business, labour, universities, Technical Vocational Education and Training colleges, co-operatives and communitybased organisations, have raised the bar

Issues to be discussed include the promotion of skills development, legislative framework and how to enhance the capacity of skills development stakeholders and the systems in which they operate. For more on this, I urge you to visit the Department of Higher Education and Training’s website and that of the National Skills Authority. It is important for our stakeholders to be part of this conference as we seek to shape and improve skills development in our country.

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FEBRUARY 2017

TECH TALK

It takes only a few seconds for an incidental mishap to put a car out of commission. Jake Venter examines some of the causes of common catastrophes

he engines of modern cars are a lot easier to damage than those built before the computer era. The electronic control unit (ECU) not only keeps the engine on the edge of maximum spark advance in order to save fuel, but it also keeps the mixture close to chemically-correct to ensure that the catalytic converter is working at maximum efficiency.

equipped to drain fuel tanks and fuel lines as soon as possible after a mishap occurs.

This means that correct and regular servicing is even more important than it used to be in days gone by – and it also means that an engine is less tolerant of any wrong-doing…

If the engine has been running it should be stopped immediately and the car should be towed to a competent workshop. The problem arises from the fact that a diesel engine relies on the lubricity of diesel fuel to oil the pump and other components. Petrol can’t do this since it has no lubricating properties. It can even be used to wash away oil.

WRONG FUEL Last year in the United Kingdom, every three-and-a-half minutes motorists managed to fill their vehicle’s fuel tanks with petrol instead of diesel, or diesel instead of petrol. Consequently, various organisations have established special mobile units that are

46 MARCH 2017

If petrol gets into a diesel tank the amount of damage will depend on how long the engine has been running. If the engine has not been started there should not be any damage but all the fuel should be drained from the tank.

If diesel fuel gets into a petrol tank the engine will struggle to start and run badly, but there should not be much further damage unless the engine has been running for some time.

PARKING ON GRASS One should not park on dry grass or other combustible material. Modern exhaust systems that include catalytic converters run at temperatures that are high enough to set grass alight. There are normally heat shields in place, but their effectiveness is nullified if the grass is long enough to penetrate past the shield. This problem is magnified by the low ground clearance on many cars. CHECKS AFTER OFF-ROADING Off-roading is fun, but the vehicle should be thoroughly checked before returning home. If tyre pressures have been lowered to increase traction they should be inflated to correct levels to eliminate the possibility of a blowout when travelling at speed. It the vehicle has waded through water the paper air cleaner element should be checked for signs of dampness and even removed temporarily to ensure the

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engine will get enough air. In a damp element, pores close up and the engine struggles for air. On a petrol engine the fuel mixture will get richer and fuel consumption will deteriorate. On a turbo-diesel the lack of excess air may cause severe overheating. OVERFILLING THE SUMP Most pump attendants endeavour to get you to “add one pint” when showing you the dipstick reading. A 500ml can should be added only if the oil level is near the “low” mark, otherwise you may end up with too much oil in the sump. This may cause smoking and oil leaks on a petrol-driven engine but could have catastrophic consequences for a diesel engine. If the level is high enough the engine’s breathing system will suck oil into the intake manifold. The engine will then rev faster and faster until something breaks. Sump oil combusts readily in a diesel engine, and the only way to stop it is to block the air intake with a towel or thick paper. NOT USING THE HANDBRAKE Not long ago somebody I know parked his car facing uphill on a very slight slope. He engaged first gear but did not employ the handbrake. After a while the slowly diminishing pressure on top of the pistons could no longer hold the car and it ran away, going backwards down the hill. After about 100 metres the car stopped against a tree, sustaining some damage. The engine was wrecked because it was forced to rotate backwards. This made the timing chain tensioner ineffective so that the chain was able to jump a tooth, allowing the valves to hit the pistons. STARTING IN GEAR One of the first things I learnt as an apprentice is that you don’t stand in front of a vehicle that’s being started. The driver may be unfamiliar with the gear selector and, if the transmission is engaged, the car may jump forward.

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USING CHEAP OIL Specialists that investigate engine failures often come across high-output engines that have failed because somebody put cheap or unsuitable oil in the sump. These engines often need synthetic oil – nothing else will do. DAMAGING THE CAT A catalytic converter can be damaged in a number of ways. Push starting an engine, pulling off a plug lead to check for spark, or a regular misfire will all cause unburnt fuel to enter the cat. If these actions occur often it will cause overheating that will destroy the converter’s effectiveness. RUNNING AN ENGINE WITHOUT AN AIR CLEANER In the days when carburettors were good enough, one of the best ways to start a fire under the bonnet was to adjust the mixture while the air cleaner (also known as a flame trap) was not in place. A lean mixture could cause a backfire into the carb and cause a flame wall. I don’t suppose this can happen with fuel injection. TESTING MISHAPS It’s easy to do something wrong when you’re taking a car out for drive. One of my stupid moments occurred when I took a car out to an open field to investigate a rear wheel noise. I speeded up the idling speed, engaged first gear, got out of the car and walked next to a back wheel to listen for the noise. I tripped over a stone and, when I recovered, found that the car was

heading for a road. I just managed to hobble back to the vehicle in time to stop it. I once drove a car whose bonnet had not been closed properly. It was hooked only on the second catch. As soon as I got up to speed on the freeway the bonnet flew open, blocking my vision. I braked so hard that the car slid sideways but it recovered when I released the brakes. OVER-FILLING GEARBOX, DIFFERENTIAL OR WHEEL BEARINGS People often manage to overfill gearboxes and differentials. This will not only damage oil seals but also cause the oil to overheat. It needs the air space to help get rid of the heat build-up. This advice also applies to the front wheel bearings on rear wheel drive cars. The space inside the hub should not contain more than about 40% grease. Pack in much more and it will overheat. PUSH-STARTING IN FIRST GEAR Newcomers are usually warned about not selecting first gear when a car is being pushed to get it started. I thought this was just an old wives’ tale – until I stripped two teeth in a differential when I ignored this advice. TOO MUCH ANTI-FREEZE Most handbooks recommend a 50:50 mixture of water and anti-freeze, but people have been known to fill the cooling system with only anti-freeze. Antifreeze conducts heat at a slower rate than water and this could lead to overheating.

MARCH 2017

TECH TALK

REVVING IN NEUTRAL Revving an engine in neutral is so harmful that some modern ECU’s do not allow the engine to exceed the 3 000 rpm mark while in neutral. When the pistons change direction at top and bottom dead centre their inertia causes a force on the main and conrod bearings that goes up as the square of the engine speed; the force at 5 000 revs/min is four times as high as the force at 2 500 revs/min. This force is in the opposite direction to the force caused by the combustion pressure, which depends on the power developed by the engine. In neutral, an engine develops hardly any power, so that the inertia force is virtually unopposed and can grow to high values at speeds over 4 000 rpm.

I remember mentioning this during a talk at a motoring club. One of the members said that he thought it was nonsense, but another member came to my rescue. He used to race motorcycles and related that the only time he broke a conrod was when he closed the throttle in a corner. CLEANING AN ENGINE WITH THINNERS In our workshop we used thinners to clean the outside of the carburettor. One day a mechanic closed the bonnet and drove off as soon as the apprentice had

finished the chore. His hasty departure left some flames behind on the concrete floor, but we had no way of contacting him. He was warned by bystanders in the street and was able to stop at a beach and kill the flames with sand.

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

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LABOUR

ontroversy that surrounds the resignation of an employee and the matter of accrued leave is nothing new. In previous editions we have discussed leave provisions as well as notice periods as outlined in the Basic Conditions of Employment Act and its relevant main agreements. However, employers face various challenges with regard to the payment of monies classified as statutory. The most common issues surface when employees resign or are found guilty of misconduct, which in turn lead to terminations of employment contracts. In each instance, employers are required to pay to the person whose contract has been terminated all statutory monies that are due – and that’s when leave that has been accrued becomes relevant. The challenge is to establish the exact amount of days owed. Before turning to case law regarding this issue, it is essential to consider what the Basic Conditions of Employment Act provides in respect of annual leave and the relevant pay-out (or not). Section 20 (11) of the Act states: (2) An employer must grant an employee at least: (a) 21 consecutive days annual leave on full remuneration in respect of each annual leave cycle;

52 MARCH 2017

Resignation and accrued leave The issue of accrued leave is complex – especially when employees resign or their employment contracts are terminated for other reasons. Douw Breed, a director at Barnard Incorporated Attorneys, explains why

(b) By agreement, one day of annual leave on full remuneration for every 17 days on which the employee worked or was entitled to be paid; (c) By agreement, one hour of annual leave on full remuneration for every 17 hours on which the employee worked or was entitled to be paid. (3) An employee is entitled to take leave accumulated in an annual leave cycle in terms of subsection (2) on consecutive days. (4) An employer must grant annual leave not later than six months after the end of the annual leave cycle. Further, the Act makes it clear that an employer may not pay an employee

instead of granting paid leave in terms of this section except: (a) On termination of employment; and (b) In accordance with section 40 (b) and (c). In turn, Section 40 states: On termination of employment, an employer must pay an employee: (a) For any paid time off that the employee is entitled to in terms of section 10(3) or 16(3) that the employee has not taken; (b) Remuneration calculated in accordance with section 21(1) for any period of annual leave due in terms of section 20(2) that the employee has not taken; and

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LABOUR

(c) If the employee has been in employment longer than four months, in respect of the employee’s annual leave entitlement during an incomplete annual leave cycle as defined in section 20(1): (i) One day’s remuneration in respect of every 17 days on which the employee worked or was entitled to be paid; or (ii) Remuneration calculated on any basis that is at least as favourable to the employee as that calculated in terms of subparagraph (i). From the above provisions it seems that the interpretation would be that the

employer would be liable to pay the employee for all leave that he or she did not take prior to the termination of the employment contract, as well as for any pro-rata leave in the current leave cycle (12 months).

preceding leave cycle as well as the current leave cycle. It should not be a case of the employee wanting to ‘cashin’ on the leave he did not take – this would constitute a circumvention of the Act.”

The aim of the Act is to ensure that the employer grants the employee the leave that is due and, in turn, requires the employee to take those days. However, if the interpretation was so simplistic, the concept would surely not be regarded as contentious.

In addition, the judge said it was clear that the timing of leave should be determined by an agreement between the parties. If there was no explicit agreement to regulate this aspect, the timing of leave provisions should be contained in the employment contract.

In the case of Ludick v Rural Maintenance (Pty) Ltd (JS 633/07) [2013] ZALCJHB 291; [2014] 2 BLLR 178 (LC) (30 October 2013), the Labour Court brought clarity to this disputatious subject. The applicant worked for the respondent for just over two years and did not take any leave during his employment. Upon termination, he claimed all leave due to him over the two leave cycles.

The issue of accrued leave first reared its head in 2003 and was, to an extent, not resolved until 2013. This in itself should be an indication of the complexity of the matter. It would be advisable that all employers show caution when dealing with leave provisions, timing of leave taken and the accrual thereof. Give effect to the aim of the Act in ensuring that employees take leave and understand its importance.

The judge made reference to case involving Jooste v Kohler Packaging Ltd (2003) 12 BLLLR 1251 (LC), where the question addressed was whether the employer was obliged to pay out all accrued leave to an employee, regardless of whether it pertained to preceding or the current leave cycle. The Basic Conditions of Employment Act fails to stipulate if any part of annual leave will be forfeited if it is not taken. Having regard to the Ludick matter, the judge said the Act imposed an obligation on the employer as it clearly indicated that “the employer must grant annual leave not later than six months after the end of the leave cycle.” The judge summarised the intention of Section 20 of the Act as follows: “Accrued leave is limited to annual leave accrued in the immediate

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

MARCH 2017

LEGAL EAGLE

Nihann van Rooyen, a Senior Associate at Barnard Incorporated Attorneys, analyses the impact of section 118(3) of the Municipal Systems Act on prospective sellers and buyers of property

ection 118 of the Municipal Systems Act 32 of 2000 (MSA) causes a lot of concern as Section 118(3) thereof enables the municipality to hold a new home owner responsible for the arrear municipal debts of a previous owner. Judgment in the case of City of Tshwane v Mathabathe has led to municipalities seizing the opportunity to demand payment of rates and taxes and other debts not incurred by the new home owner but by other persons prior to the new home owner taking transfer of the property. The relevant sections of Section 118(1) and Section 118(3) of the MSA pertaining to the aforesaid read as follows: Restraint on transfer of property A registrar of deeds may not register the transfer of property except on production to that registrar of deeds of a prescribed certificate: (a) Issued by the municipality or municipalities in which that property is situated; and (b) Which certifies that all amounts that became due in connection with that property for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties during the two years preceding the date of application for the certificate have been fully paid. An amount due for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties is a charge upon the property in connection

54 MARCH 2017

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with which the amount is owed, and enjoys preference over any mortgage bond registered against the property. This requirement has caused great concern in cases where the new home owner has been held liable for municipal debts older than two years (incurred by previous home owner/s.) Municipalities have held that the new home owner is responsible for historical debts and, in certain circumstances, new home owners could lose their homes since municipalities are entitled to attach and sell the property to satisfy the debt. In the case of City of Tshwane Metropolitan Municipality v Peregrine Joseph Mitchell, the purchaser bought a property on a sale in execution. The municipality held the purchaser liable for arrear municipal debts on the property. The North Gauteng High Court ruled that Section 118 unjustifiably limited the new home owner’s property rights under the Constitution. The Court ruled that a sale in execution is an exception and therefore: 1. The new home owner, after the transfer of the property into his/ her/their name, does not become liable to the municipality for any outstanding debts incurred by the previous home owner/s (“the seller”) and/or any party prior to the transfer; and 2. Any outstanding debt not collected at the time of issuing of the Clearance Certificate remains a debt owned by the seller to the municipality. This debt is unaffected by the transfer of the property and, as such, the municipality can recover the debt from the seller even after the

property is transferred into the name of the new home owner. The municipality in the Mitchell case appealed against the judgment to the Supreme Court of Appeal and a majority judgment on the interpretation of Section 118(3) was delivered. The majority of the Supreme Court of Appeal held that the exception about sales in execution, in which the new owner obtained a clean title to the property, was misplaced and could not be read into Section 118(3). The reasoning was as follows: The hypothec of the municipality survives transfer where there is a sale in execution since no distinction should be made between a normal sale and a sale in execution when determining whether the hypothec will survive transfer. Thus the new owner can be held liable for historical municipal debts.

At this point in time, the interpretation adopted in by the Supreme Court in the Mitchell case is constitutionally acceptable, but until the matter is referred to and ruled upon by the Constitutional Court it is advisable that potential buyers obtain precise and detailed information regarding outstanding historical municipal debts on the property they stand to purchase. Conveyancers will also need to play a paramount role in these situations as they will have to ensure that the purchasers are only paying for debts that fall within the two-year time period as stipulated in Section 118(1). Furthermore, purchasers can also protect themselves by inserting a clause in the sale agreement that indemnifies them against the liability of the seller’s historical debts.

The minority, however, held differently, supporting the judgment of the North Gauteng High Court as the wording of Section 118(3) was not broad enough to protect the hypothec if the property was sold in execution. The purpose of this section was examined since there is no reason for the survival of the hypothec when a property is sold in terms of a sale in execution as municipalities should exercise their right of preference at the sale in order to settle the historical debt. The differing views of the Supreme Court of Appeal in the Mitchell case highlights that this section is an arguable point of law and falls within the jurisdiction of the Constitutional Court.

RMI4Law members enjoy the benefit of legal advice from an attorney 24 hours a day. If you wish to join RMI4Law, call 0861 668 677.

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MARCH 2017

BUSINESS MANAGEMENT

Dealing with bad debt If you allow flexibility on your payment terms, there will always be customers who take you for a ride, says business coach Fergus Ferguson even be worth creating an email account just for chasing accounts – for example, accounts@yourbusinessname.co.za. Even if you’re the one manning the mail box, it makes it less of a personal process – it’s just the accounts department sending out a routine reminder, not you personally chasing your friendly client.

hen it is worth writing off bad debt? The short answer to that question is never. Of course, that’s not entirely true, but I’ve seen too many business owners write off bad debt when there’s still a healthy chance of getting the monies owed to them. Generally, money owed tends to be written off because business owners don’t have a clear and up-to-date view of what their debtors’ book looks like. The other problem I run into all the time is that business owners are scared to say: “Please pay me what you owe me.” You need to get past this if you want a successful business. You don’t have to be nasty about it. Often, all that’s needed is a polite but firm email along the lines of: “Your account is 60 days in arrears. Payment is due in seven days, or interest will be levied.” If you threaten to add interest, make sure you actually do. This generally prompts people to pay faster! It might

See, sometimes people are not ducking and diving to avoid paying you – they have just forgotten or the account has fallen through the cracks. If you don’t remind them, they won’t pay, but if you do, there’s a good chance they will. In fact, in our experience at ActionCOACH, clients who implement this method collect 80% of their outstanding debt. Of course, there will be the occasional customer who needs more than a polite reminder, so your next step should be to send a lawyer’s letter. This generally gets 80% of the remaining 20% settled.

This may all sound intimidating, but I’ve found that the problem is normally right near the beginning of this process – business owners don’t take that first step and just ask for payment. Instead, they wait for months to pass and then it becomes an emotional issue instead of a factual one. Start upfront. Be clearer on your payment terms. If you allow flexibility, there will always be customers who take you for a ride. Put a system in place to track payments (for example, sending out a reminder to customers whose bills are due at monthend). The day after invoices are due, send out another reminder to people who haven’t settled their accounts. Remember – the people who shout loudest get paid first! You need to be checking up on payments daily or at least weekly, not once a month. Remember: a client is someone who pays you for your product or service. If they don’t pay, stop doing business with them, or start demanding payment upfront before any work is done.

For the last bit that’s outstanding, you need to consider employing a collections agency. There are many that will take your debtors’ book on risk and then get a percentage of all outstanding amounts recovered.

Another big mindset to change is that you should treat every client the same. Have different payment terms for different customer classes. Only good customers should get good terms!

Even if they take 20%, you’ve still got 80% of the amount that was outstanding. Or, if the amount is not worth chasing or chasing it is starting to cost you time, effort and money, it may be worth finally writing it off.

Finally, be transparent with your team. For example, if your sales force understands that they only get commission on money paid into the bank (not money promised); they are more likely to ensure that customer payments are made promptly.

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 082 6500867 or visit actioncoach.com/fergusferguson

56 - MARCH 2017

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MAY 2016 -

RMI UPDATE

Managing HIV/Aids in the workplace How is HIV spread? Here are some answers to frequently asked questions

ctivities that put a person at increased risk of HIV infection typically include having unprotected anal, oral or vaginal sex with a person who has HIV or whose HIV status is unknown, or sharing injection drug needles or “works.” Women with HIV infection can pass the virus to their babies during pregnancy, delivery and through breastfeeding. Health care workers may be exposed to HIV through needle-sticks and other blood contact. This effectively summarises what activities carry increased risk; this article looks at a few frequently asked questions about some of these activities and the associated risk of HIV infection.

Why is anal sex a high risk activity for HIV infection? The walls of the anus and rectum are thin and richly supplied with blood vessels which can be injured during anal sex. HIV infected semen can be easily absorbed through these thin walls and into the bloodstream. Injured tissue in the anus and rectum can expose the penis to blood containing HIV, as well. Unprotected anal sex with a partner who is infected or whose HIV status is unknown is the most risky sexual activity for both men and women. While latex condoms provide protection, their failure rate during anal sex is greater than that for vaginal or oral sex. Are men and women both at risk for HIV infection during vaginal sex? Yes. A growing number of women have become infected through vaginal sex with men who are HIV infected. Though women are at greater risk for HIV infection through vaginal sex than

men, HIV is found in vaginal fluids and menstrual blood and can be transmitted to male partners, particularly if there is a cut or sore on the penis. Can a person with HIV who is not sick or who has no symptoms transmit HIV? Yes. Initially, most people with HIV infection have no symptoms and may not be aware they are infected. Any person infected with HIV can transmit the virus to another person through sexual contact or sharing needles or drug injection equipment.

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Does everyone who is exposed to HIV get infected? No. Infection with HIV may depend on how the virus enters the body and the amount of virus that enters the body. But it is important to know that infection may occur after one exposure to HIV infected

blood, semen or vaginal secretions. Exposure can occur during unprotected sex or sharing injection drug needles or “works.”

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FAQs

RMI UPDATE

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Kigima Auto Electrical Training Centre 212 Soutter St, Pretoria West, 0183 Tel : +27 (0)12 327 2586 Fax : +27 (0)12 327 6211 Email : irene@kigima.co.za

kigimatrainingcentre

60 FEBRUARY 2017 - FEBRUARY 2017

www.automobil.co.za www.automobil.co.za www.kigima.co.za

HIGHVELD

ipment Garage Equ E age r a G ur Yo

oo nt & T e m quip

list l Specia

42 Taaifontein st cnr Khai-Apple st Montana, Pretoria 0182

EAE EE-62C 2 Post lift Capacity 4200Kg Low maintenance 230V Single phase with patented design to convert to base lift

Eurolift Z25M Scissors lift Capacity 3200Kg Above ground installation Low maintenance 230V Single phase Made in Italy

Teco 35 Tyre changer Very heavy duty tyre changer for busy tyre shops. Suitable for tyres up to 24" diameter. Optional help arm attachment available. All Teco products are made in Italy

For all your workshop equipment and special tool needs

Finance available

Website www.hge.co.za Quality brands at affordable prices. www.automobil.co.za

FEBRUARY 2017

62 MARCH 2017

www.automobil.co.za

MARCH 2017

MEMBERUPDATE

The RMI welcomes these new businesses into membership Member’s Trading Name City/Town A 2020TT Auto Engineering & Transport Randfontein ABCDI Trading Bloemfontein Alpha Truck Bodies Benoni Arnies Panel Shop Cape Town B Bergrivier Motors Wellington Boss Auto Goodwood BP Bergbron Johannesburg C Car Service City Kempton Park Clint Panel and Paint Tongaat Coetz Technologies Boksburg D Danmar Autobody Cape Town Dino Panel Beaters Pretoria Driven Repairs and Services Springs E Eastvaal Motor City Witbank Eddi & Son Motor Mechanical Seshego Ermelo Auto Fix Ermelo Euromotive SA Edenvale Executive Truck & Car Repairs Ladysmith F Fairway Panel Beaters Port Shepstone French Services & Spare Blackheath Fuzion Pre Owned Parow G GOG Holdings Johannesburg I Integra Motor Group Roodepoort Iondetail Parow Isizwe Motors Edenvale J Jarvest Auto Soweto K KNA Automotive Earth Bloemfontein L L & M Towing Vredenburg

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-to-day running of their businesses.

Member’s Trading Name City/Town M MT Mechanical and Projects Kempton Park Makhubela and Sons Auto Body Pretoria Marshalltown Bosch Autocrew Johannesburg Maruleng Auto Hoedspruit N NMD Auto Care Pretoria Njoli Convenience Centre Port Elizabeth O OK Auto Body Clinic Butterworth P PB Auto and Truck Repairs Boksburg PG Autobody Kempton Park Phakama Service Centre Middelburg Premier Body Works Uitenhage Pro Master Pretoria Puma Safari Motors Bloemfontein R RM Auto Services Bellville RWS Truckbodies Brackenfell S SA Performance Exhaust Johannesburg Sasol Struben Ridge Roodepoort Servest Landscaping & Turf Maintenance Midrand Shirinda Panel Beaters Pretoria Shoreline Motors Warner Beach Silver Lakes Auto Clinic Pretoria Spot on Deals Port Elizabeth Supa Quick Isando Kempton Park Supreme Service Centre Edenvale T Tahira Solutions Cape Town Taliscore Sasolburg Tiropapipule Polokwane Total Eversdal Motors Bellville Transpeninsula Investment Cape Town V Valotype 135 Polokwane VJ Auto Clinic Roodepoort

ADVERTISERS AUTOMOBIL – MARCH 2017 EDITION CLIENTS

CONTACT

WEBSITE

PAGE

Abandoned Solutions

073 016 8424

N/A

Aer O Cure

011 444 6454

www.aerocure.co.za

OBC

Africa Automotive Aftermarket Solutions

011 879 6000

www.aaas.co.za

19 & 33

automechanika Johannesburg

010 599 6165

www.automechanikasa.co.za

Automotive Industry development Centre

012 564 5078

www.aidc.co.za

Audi Parts

0860434838

www.audi.co.za

26 & 27

Autocosmos Biz (Electrolog)

012 327 6210

www.autocosmos.co.za

Automobil Association

011 799 1068

www.aa.co.za

Caelex

012 327 5404

www.caelex.co.za

CDK Global

011 998 6000

www.cdkglobal.co.za

Ctrack

012 450 2222

www.ctrack.co./za

Highveld garage Equipment

012 330 0540

www.hge.co.za

Kigima Auto electrical Training Centre

012 327 2586

www.kigima.co.za

Mahle Aftermarket

+4911 501-13204

www.mahle.com

Moto Health Care

0861 000 300

www.motohealthcare.co.za

10 & 11

NAACAM

0861 101 475

www.naacamshow.co.za

Probe Corporation

011 453 0924

www.probegroup.co.za

Robert Bosch

011 651 9600

www.bosch.co.za

Safeline (GUD holdings)

031 910 3111

www.safelinebrakes.co.za

IBC

Silver Falcon Trading

083 628 2288

www.hurricaneauto.co.za

62 & 63

Snap On Africa

0861762 766

www.snapon.co.za

IFC

Tenneco Automotive

011 574 5603

www.MONROE100.com

TruckX

011 803 2040

www.truckx.co.za

Volkswagen parts

0860434737

www.vw.co.za

50 & 51

Truck 2017

Conference & Expo

Save the date

Con

July 12 & 13

Africa’s Premier Trucking & Logistics Conference and Expo

Truck Expo

2017

Co – Located with

Fleet Expo

2017

IMH Expo

2017

Kyalami Grand Prix Circuit TRUCKX 2017 HALL OF FAME

The search is on for South Africa’s safest truck drivers: For details log on to www.masterdrive.co.za / www.futuretrucking.co.za / www.truckx.co.za www.automobil.co.za

www.truckx.co.za MARCH 2017 65

TAIL PIECE

Get set for the future Frost & Sullivan’s Visionary Innovation Team focuses on emerging trends that are most likely to have impact on the global order of things this year

ramatic political changes and other external factors look set to destabilise long-standing global relationships and agreements between countries in 2017. Donald Trump’s presidency, Brexit, and the trend toward isolationism will lead to more cautious nations and industries. The changes, coupled with technological disruptions due to the rise of artificial intelligence (AI) personal assistants, evolution of Internet of Things (IoT) t o sentient tools, and the launch of Level-3 autonomous vehicles, among others, will threaten the position of many existing players. However, the trends will also prompt companies to become smarter and more efficient in business models and practices. Following the US presidential election and Brexit, Frost & Sullivan’s experts have taken a closer look at possible future scenarios, analysing the effects the unexpected events may have on markets and companies. The research explores trends spanning geographies, industries and applications to offer a comprehensive view of the change agents of 2017. As platforms, business models and technologies collide in nuanced ways, and categorisation becomes challenging, these insights can be an essential reference tool for companies looking to devise shortterm strategies as well as set long-term implementation goals. Some of the key technological trends highlighted in the study include:

66 MARCH 2017

• Artificial Intelligence personal assistants race for dominance; • Level-3 autonomous vehicles hit the road; • Connected living transforms the home; • Cognitive is the new smart; • Augmented reality becomes mainstream for business to business communication; • The Internet of Things pivots towards tools that understand emotion; Some of the implications of these trends were set in motion in 2016, such as the advances and launches of AI personal assistants and smart home platforms. Businesses may also have to prepare for a

winner-take-all competitive environment and impending social disruptions brought about by the spate of innovations. “Long-awaited drones, autonomous vehicles, space capabilities and robotics are all poised to notably affect the commercial market this year,” says Lauren Taylor, principal consultant of the Visionary Innovation Group. “These technologies, while enhancing efficiency, productivity, accuracy and filling employment gaps, could lead to combustible labour dynamics. Such colliding interests will change the course of revenue streams and pricing segmentation, as well as encourage a thorough evaluation of trade-offs.”

www.automobil.co.za

unrivalled

STOPPING power

SAFELINE is South Africa's proven leader in braking safety offering the shortest stop to safety. www.automobil.co.za

When Safeline has stopped its closest competitor is still travelling at 40 km/h.* Designed and engineered for top performance Safeline's winning braking combination is the safest by far. *Results of Fade Test: SLR3522 conducted on Safeline disc and pad combination and three competitors.

www.safelinebrakes.co.za MARCH 2017

The Global Benchmark in Automotive Repair Equipment.

EXCLUSIVELY DISTRIBUTED BY

RANGE BENEFITS: • • • • • • • • • •

Internationally Acclaimed OEM Approved Massive Parts Savings Best Value-for-Money Qualified Product Training Insurance Approved Streamlined Production Demos Available Quality After-Sales Service Widest Range for Steel and Aluminium

In the modern autobody shop world, repairing and not replacing is the name of the game. GYS, a 50 year old French manufacturer of superior car body repairing equipment, has over the past half century developed a significant range that is recognised and homologated by my most OEMS, distributed in 106 countries and manufactured 100% in house. With an array of innovative, award-winning products, Aer-o-cure’s GYS range will add efficiency, reliability and profitability to any production line at a highly competitive price. Visit the Aer-o-cure website or call now to request a catalogue or speak to an advisor on which of our products could best benefit your operation. STEEL REPAIR RANGE:

EASY LINER 39.02 (053618)

GYSPOT 2700 WITH TROLLEY

HIGH SPEED PRODUCTION RANGE:

GYSLINER PRO (036031)

SPEEDLINER PRO 230 (036017)

PROLINER PRO 230 (035799)

MANUSPOT (050679)

EARTH ADAPTER (051997)

RINGMATIC (052154)

For the full range visit: www.aerocure.co.za

Automotive Bodyshop Equipment Aer-o-cure PTY (Ltd) • SADC Registered Manufacturer and Exporter 8 Lees Street, Wynberg, 2090, Johannesburg, South Africa. PO Box 137 Strathavon, 2031

68 MARCH 2017

GraphicWerx • AOC_GYS_AutoMobil_3218

Tel: +27 11 444 6454 Fax: +27 11 444 5677 e-Mail: info@aerocure.co.za

www.automobil.co.za

* Product / Colour may vary from image provided, subject to stock availability. (E&OE)