Car industry divided over draft 'right-to-repair' guidelines

04 March 2020 - 21:00 By Brenwin Naidu
Public feedback on the proposed guidelines for competition in the South African automotive aftermarket industry is invited before March 16.
Public feedback on the proposed guidelines for competition in the South African automotive aftermarket industry is invited before March 16.
Image: Waldo Swiegers

Proposed “right-to-repair” policies detailed in draft guidelines by the Competition Commission have been hailed as a potential victory for motorists - but certain industry stakeholders believe the move would have a negative impact on road safety and result in job losses.

In February the commission released its guidelines for competition in the South African automotive aftermarket industry. Outlined in the document is a concept that would allow consumers the choice to repair and maintain their vehicles at independent service providers, without affecting their warranties.

In addition, the unbundling of manufacturer-instituted maintenance and service plans is presented. It puts forward the idea of reducing barriers of entry for entrepreneurs eyeing the space.

The National Automobile Dealers’ Association (Nada) countered with their reservations, describing the framework as “totally unworkable” and with foreboding consequences.

“We have not been able to identify the pro-consumer or inherently transformative nature of the draft guidelines and have no choice but to unilaterally reject the guidelines,” it said in a statement.

Responding to TimesLIVE's inquiry about the points in the draft it objected to, the organisation said: “Out of courtesy to the Competition Commission, we will be responding to them with our specific concerns and hope to engage further on these to look for practical solutions. Therefore we do not feel it would be appropriate to answer this question at present.”

It added that it would try to convince the commission to address certain clauses, which if not amended would leave motorists “far worse off financially and in terms of their own safety.”

Speaking to TimesLIVE Motoring, Dr Martyn Davies, automotive leader at Deloitte Africa, said, “I’m all for giving consumers choices, but we already have a significant safety challenge, which should not be made worse by well-meaning legislation.”

He explained that the breaking down of corporate players was not the best approach to foster more transparency in competition, cautioning that greater “prudence and pragmatism” should be adopted in further action on the issue. 

Last month the National Association of Automobile Manufacturers of South Africa (Naamsa) responded to the guidelines.

Its CEO Michael Mabasa urged the commission to “reconsider its punitive approach and rather use any guidelines it formulates as an industrial policy tool to stimulate economic growth and inspire business confidence.”

Meanwhile, lobby group Right To Repair SA (R2RSA) hit back this week, dismissing the outcry from original equipment manufacturer (OEM) stakeholders as “scare messages” and “nothing more than fear-mongering, detracting from the real issue of competition”.

Director and co-founder Les McMaster said the organisation had braced for criticism. “Everyone has their opinion on how this is going to work, but at the end of the day it’s about the choice of the consumer.”

He said arguments about safety were “laughable”, asserting that most consumers take their vehicles to reputable aftermarket service outlets once the warranty has expired - “and we haven’t seen safety compromises in those cases”.

Responding to concerns about job losses, McMaster referenced the disparity in numbers between the manufacturing and aftermarket sectors.

According to Naamsa, the sector “employs more than 110,000 people across its various tiers of activity”.

A 2018 discussion document from Statistics SA stated that the motor trade industry accounted for 345,716 jobs in its entirety.

“There stands to be more jobs lost in the aftermarket because of unethical practices," warned the association. 

“What OEMs don’t tell you is that they have huge rebates and grants – that comes from the taxpayers’ pockets. Potentially, they’ll lose a small portion of that, but they’re acting like the world is going to end.

“People will still buy new [cars], people will still buy service plans - but those who don’t buy new will have the option to get their vehicles serviced at aftermarket dealers.”

Comments on the guidelines can be sent to advocacy@compcom.co.za by March 16.


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