JOHANNESBURG, South Africa – A new dawn is lurking just below the automotive corporate horizon (from July 1, 2021) that could affect every vehicle owner (corporate or private) in South Africa when seeking to buy, repair – even service – a car.
The changes are coming thanks to guidelines published by the Competition Commission.
According to the CEO of Autotrader, George Mienie, the new rules will introduce substantial changes to buying a vehicle and having it/them serviced or repaired.
SO, WHAT’S HAPPENING?
“These changes will mean original equipment manufacturers (OEMs), vehicle dealers, and workshops will have to change how they do business,” he points out.
So, what are these changes and how will they affect the OEMs, dealers, workshops and – most importantly – the consumer? Here are some of the most important guidelines – and their implications.
1. Freedom of choice
PEOPLE WITHOUT vehicle insurance cover will be able to have their motor vehicles repaired by a service provider of their choice and at any point during the vehicle’s life. They will no longer have to go to a so-called “approved motor-body repairer”.
2. More options
FOR VARIOUS REASONS, your options for bodywork repairs have so far been limited. No longer… OEMs need to promote and/or support the entry of new motor-body repairers, with a preference for those owned by ”historically disadvantaged individuals”.
OEMs will no longer enter into exclusive arrangements, either with one or more approved motor-body repairers, for repairing an OEM’s vehicles within a designated geographic area.
Practically, this should mean that there are more motor-body repairers – and the consumer will have more options. In theory, cars should also be repaired more quickly.
3. More flexibility with maintenance and service plans
VEHICLE DEALERS WILL not longer be allowed to include a maintenance or service plan in a vehicle’s purchase price; the plan must be “unbundled” – the vehicle owner can say yea or nay to buying a plan from a dealer or shop for one elsewhere.
In addition, if a vehicle with a maintenance or service plan is written off by an insurance company, that plan must pass on to the replacement vehicle.
4. Dealers will become less grand
THE COMMISSION SAYS a dealer’s start-up costs – at an average of R60-million – can be exorbitant and a high barrier to entry. In future, the OEMs must adopt measures to reduce financial barriers to entry and promote the participation of HDIs in the dealer market.
Finallyi, OEMs should not impose so-called “onerous obligations” on prospective dealers. So, expect a lot more smaller, far less grand, vehicle showrooms to pop up.