November 9, 2017
Witness
WHEELS
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Spanners fly over code for auto trade Car makers criticise proposed plan for vehicle repairers as well intentioned, but flawed THE National Association of Automobile Manufacturers of SA (Naamsa) has criticised as well intentioned but flawed a voluntary code proposed by the Competition Commission for South Africa’s vehicle repair, ser vicing and parts supply sectors. The code backs independent mechanics, of whom some 2 500 are represented by the Motor In dustry Workshop Association, (Miwa) who are part of the right to repair modern cars at inde pendent workshops. When Les McMaster, chair of Miwa, launched the right to re pair campaign in 2013, he said South African laws must change to follow the international Right to Repair (R2R) trend. At the heart of the argument is the owner’s need to have a ve hicle repaired at lower rates at independent aftermarket deal ers without voiding the dealer or manufacturer’s warranty; against the original manufactur ers’ need to profit from its in vestment in proprietary infor mation, systems and tested safe ty standards. “There is a need for a fair and competitive regulatory environ ment that enables freedom of choice for the consumers and that gives aftermarket business es a chance to stay in business,” McMaster has been saying since 2013. The Competition Commis sion backs this view with its pro posed voluntary code for the au to trade, but Naamsa said in a statement on Monday while the code “appears well intentioned”, it overlooks a number of realities and important considerations in the auto trade. Naamsa said the competition commission need to take into ac
count the thin profit margins and the “intensely competitive nature of the industry”. Naamsa said the automotive industry in South Africa did not deliberately exclude small medi um enterprises from automotive aftermarket, repair, servicing and parts supply activities. In stead “market and commercial realities” are keeping small play ers out of the loop. “Anyone can participate in franchise dealer operations,” states Naamsa, as long as they can overcome the “restrictions to participation”, which includ ed access to loans, skilled techni cians, expensive diagnostic technology as well as feet through the door. “These represent market and commercial realities and should not be construed as anticom petitive,” said Naamsa. Naamsa said there was also no need for independent work shops to vie for a slice of the war ranty pie, as South Africa has over 11,2 million motor vehicles, of which 75% are no longer un der warranty, service or mainte nance plans. “The competition authorities should be careful to avoid irrepa rable harm to an industry which has become the successful cor nerstone of growth and develop ment in South Africa. “Already, the publication of the draft code of conduct and the associated uncertainty has resulted in established business es, as well as potential new en trants, placing on hold any ex pansion decisions pending the outcome of the process,” said Naamsa. “It is essential to safeguard in vestments of existing and future participants in the automotive
value chain which in turn re quires a code which is realistic and practical. “In this regard, during June 2017, Naamsa made a submis sion to the Competition Com mission on a code of conduct based on the Russian code with added elements from the Euro pean Union and Australian codes.” Naamsa believes that the Competition Commission should revisit the industry’s ear lier proposals in this regard, since they adequately address in ternationally accepted practices, the legitimate interests of con sumers and the objectives envis aged by the Commission. Moreover, any future propos als by the authorities should be subjected to a socioeconomic employment impact study to avoid negative consequences for the automotive industry, the South African economy and the industry’s customers. Richard Clarke, chairperson of the notforprofit Section 21 company R2RSA, told Wheels24 earlier this month that denying workshops the chance to repair vehicles because of warranties and access to information allows original equipment manufactur ers to monopolise the auto trade. “If there is no change, work shops will no longer be able to service new vehicles sold in five years’ time,” Clarke warned. • A copy of Naamsa’s submis sion to the Competition Com mission may be accessed on Naamsa’s website www.naam sa.co.za. • For more information on the right to repair campaign, email elizabeth@r2r.org.za. • alwyn.viljoen@witness.co.za
“There is a need for a fair and competitive regulatory environment that enables freedom of choice for the consumers and that gives aftermarket businesses a chance to stay in business.”
Rallycross comes to Cape Town Killarney race circuit in Cape Town will host the 12th and final round of the year’s FIA World Rallycross Championship in the competition’s first ever visit to South Africa on Saturday and Sunday. Organised by the Western Province Motor Club, tickets are still available on ticketpros.co.za, starting at R150 and going up to R700 for a chance to see race drivers like Sebastien Loeb, Petter Solberg, Matthias Ekström and Ken Block in action. PHOTO: MOTORPRESS
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