Watchdog guns for car-repair 'racket'

The days of having to take your car to an "approved" repairer may be coming to an end.

The Competition Commission has summoned manufacturers and insurers to a summit next month after concluding that their policies are impeding competition in the market.

"We are concerned about motorists' complaints of excessive pricing," said deputy commissioner Hardin Ratshisusu.

Level 1 BEE-accredited businesses have complained that they are excluded from the ranks of approved repairers, and the South African Auto Repair and Salvage Association said its members were surviving on crumbs because 95% of approved repairers were white-owned.

story_article_left1

But Nico Vermeulen, director of the National Association of Automobile Manufacturers of South Africa, said it was "unreasonable and impractical" to expect carmakers to guarantee repairs or parts provided by third parties.

South African Insurance Association CEO Viviene Pearson said insurers were at the mercy of manufacturers.

"In these cases, the insurers do not have a choice as should they not follow the policies of the manufacturers, the client will lose his/her warranty, which means he/she is put in a situation worse than they were before," she said.

"On vehicles that are out of warranty, insurers would prefer to use good-quality alternative parts, or used parts for older vehicles especially, but there is a lot of resistance to this, sometimes from customers/policyholders, but mainly from motor manufacturers."

Pearson also said the after-sales industry was overtraded.

"The short-term insurance industry insures only around 35% of vehicles, [leaving] 65% of vehicles open to anybody."