Franchised dealers recognized for the important role played in the automotive aftermarket ecosystem
The final guidelines for competition in the South African automotive aftermarket were released by the Competition Commission on December 10 and will come into effect next month, July 1. They have been published to provide practical advice to industry players for the adoption of pro-competitive measures in the automotive sector. aftermarket and promote greater participation of small businesses and historically disadvantaged people in the industry.
It took over three years to finalize, with input from a variety of industry stakeholders, including recommendations from NADA, which represents more than 1,400 franchised dealers across South Africa.
“We have worked closely with the Competition Commission to ensure that the best interests of the consumer in terms of vehicle safety and value are at the forefront. The franchise industry is a huge job creator and plays a vital role in the economy as well as the broader communities they support, ”said Mark Dommisse, President of NADA.
“We are very grateful to the commission for taking into account our recommendations, which took time to finalize and get to where we are today. We are confident that we have a workable document and pledge our support to implement it and achieve its goals, the most important of which are vehicle safety and the transformation of the automotive industry.
The guidelines require original equipment manufacturers (OEMs) to adopt strategies and develop business models that, among other things, allow independent service providers (ISPs) and historically disadvantaged people to perform maintenance and repair. maintenance while a vehicle is under warranty.
They also make OEMs responsible for disclosing certain information to consumers, such as the price of any pre-included service plan, maintenance plan, extended warranty, or product against scratches and bumps, in order for them to make choices. informed about the required future maintenance of their Vehicles.
“OEMs will interpret and respond to guidelines independently of each other. This should happen gradually over the next few months as they adjust their terms and conditions. It’s not a one-off situation and won’t happen all at once, ”Dommisse said.
“Although the guidelines officially come into effect on July 1, it is important that customers and stakeholders understand that these guidelines are not a law, but rather a series of non-binding applications for use by the Competition Commission. South Africa to interpret certain sections of the Competition Act as it relates to the automotive aftermarket. Consumers will need to communicate with the relevant resellers to understand what is and what is not possible with respect to the respective OEM’s processes and procedures, as well as the terms and conditions.
When the guidelines come into effect, consumers will be able to choose to perform service and maintenance at a workshop of their choice, including ISPs, but in doing so there will be certain obligations and consequences as defined. in the guidelines, such as possible cancellation of parts of the warranty. If an ISP or entity wishes to become an authorized reseller, the OEM must have fair and transparent selection criteria and if the ISP meets these criteria, then the OEM must approve them. An OEM is only required to approve a request if that ISP meets all of the terms, conditions and criteria set out by the OEM.
“This is vital for consumers to understand and is built into the guidelines in order to protect the customer and the integrity of their vehicle,” Dommisse said.
When working on a consumer’s vehicle, independent service providers should disclose whether they have adequate insurance to cover any liability or potential damage to the vehicle, should disclose the risk of servicing at a FAI (under warranty) and the fact that the OEM or their supplier will not pay for any work performed. They will also take full responsibility and risk for the work they perform.
“Consumers should remain very aware that if their vehicle is not maintained or repaired properly, and at an ISP, it could still impact their vehicle’s factory warranty according to guidelines,” said the President.
Any damage caused to a vehicle as a result of work performed or non-original replacement parts fitted by ISPs will be assessed by the respective OEMs, and part or all of the warranty may be void. Any dispute will be handled by the South African Automotive Industry Ombudsman and ISPs will need to ensure that they comply with their legal obligations in terms of consumer protection law.
While consumers will invariably have more choices when it comes to having their vehicles serviced and serviced, it is important that they make informed decisions and exercise due diligence before appointing a shop to service their vehicle. Modern vehicles are complex machines that require proper diagnostics, tools and expertise to ensure that proper quality and safety standards are met.
“Consumers should keep in mind that OEMs invest heavily in intensive training programs to equip their franchise technicians with the skills and knowledge to handle complex procedures and the introduction of new technologies. These programs are essential for ensuring the safety of vehicles and, in turn, the safety of technicians and ultimately motorists, not only in South Africa but around the world, ”said Dommisse.
“Unqualified technicians can potentially cause damage to vehicles, customers and themselves if they don’t have the proper training or tools to work. OEMs and their respective dealer networks can now make previously protected technical information and training available outside of internal programs, and this ability to develop people and transfer skills is a particularly effective transformational benchmark. However, it needs to be managed properly and NADA accepts in principle that the guidelines will do so. “
Source: NADA / Ilana Salant – Meropa Communications