Watchdog shows car firms red light
South Africa's consumer watchdog has fired the first salvo at the multibillion-rand vehicle industry.
On Friday the National Consumer Commission gave BMW South Africa and one of its Johannesburg dealerships 15 days to replace a customer's defective E82 135i Coupe, worth R450000 - or face being fined 10% of its annual turnover.
BMW SA has also been ordered to replace the broken arm rest on a 2008 Z4 M Coupe or risk a R500000 fine.
And a Pietermaritzburg Fiat dealership has been told to refund a customer or replace a Fiat Punto Active .
The compliance notices are the first issued to the motor industry since the commission was established in April to enforce the new Consumer Protection Act (CPA).
Even if the dealerships comply, the commission is considering asking the consumer tribunal to fine them for allegedly treating the commission with contempt. This is after they allegedly refused to attend conciliatory meetings to find a resolution.
Said national consumer commissioner Mamodupi Mohlala: "I think the dealerships were testing us to see whether we'd use our powers."
At least 20 other notices, to various motor industry players , are expected to go out this week.
The CPA makes provision for the commission to investigate, for the next three years only, any breach of the repealed Unfair Business Practices Act, which dates back three years after the new one became effective.
BMW SA and the Fiat dealership said they would file objections to the notices. The consumer tribunal, which is empowered to issue fines, can either dismiss the objections or call for a hearing.
Friday's notice to BMW SA was also served on Bryanston BMW dealer, JSN Motors, from where the complainant bought a new E82 135i Coupe in January.
By March the car had an alleged mechanical failure and had to be towed. The first repairs quote from JSN Motors totalled R13747, and the second was R25397 .
The Z4 Coupe was bought from BMW dealer Barloworld Club Motors Randburg in 2008, for R550000.
Cracks developed on the armrest in March and were repaired by the dealership. But these reappeared, after which the dealer said the armrest needed to be replaced.
BMW told the car owner that his five-year/100 000km motor plan did not cover the interior of the car and is said to have offered to pay half the replacement cost.
BMW spokesman Guy Kilfoil said on Friday that the commission's notices had not set out the repealed law allegedly breached by BMW.
In addition, he said, the commission was applying the new CPA to a purchase and services rendered before the implementation of the new act.
"Besides that, we're convinced the 135i Coupe is not a defective car and the damage was caused by an external agent," he said.
In the case of the armrest, Kilfoil said no "proper case" had been presented. BMW SA would, "outside of the law", try to resolve the issue with the two customers, he said.
The Fiat customer who bought her R163440 five-door Fiat in May said she noticed a problem with the engine and the tachometer a day after delivery.
The Datcentre Pietermaritzburg Fiat dealership repaired the car after saying she could not have a replacement. When the faults persisted, she said she was assured of a refund by the dealer principal and franchise manager - but that the dealership later reneged on this.
Tim Pearce, attorney for Datcentre Motors, which owns Datcentre Pietermaritzburg Fiat, denied the car was defective. He also denied any conciliatory meeting had been arranged.
He denied a refund offer had been made, saying the CPA did not entitle a customer to demand a full refund if the "slightest problem" occurred.
"Buying a car is not like buying a kettle," Pearce said. "A car is a sophisticated piece of machinery ... a customer should reasonably expect that a minor problem may present itself."