Right to Repair SA (R2RSA) is a Section 21, non-profit company specifically formed to champion the Right to Repair campaign launched in 2013. The campaign aims to allow consumers to select where their vehicles are serviced, maintained and repaired at competitive prices in the workshop of their choice without their service/maintenance plan or warranty being compromised.
R2RSA’s recently appointed Chairman, Gunther Schmitz, says, ‘There is a need for a fair and competitive regulatory environment, which enables freedom of choice for the consumers and gives aftermarket Small to Medium Enterprises (SMEs) a chance to stay in business’. He believes the status quo in South Africa cannot continue as it is exclusionary and unsustainable.
‘Competition is the basis for an inclusive and sustainable economy,’ Schmitz adds. ‘It’s all good and well to give a BEE investment group a shareholding in a large dealership, but in the long run we need to make sure that the independent small business can compete. That is a far more sustainable way of assuring real change in our economic landscape. Current exclusionary practices mean start-ups are being driven out of business, and job creation is restricted, as is the growth of this sector. Denying workshops the chance to repair vehicles because of warranties and access to information has allowed manufacturers to monopolise the automotive industry.’
Schmitz says the anti-competitive situation means inflated prices for consumers. ‘Extended warranties are locking consumers into periods where they have no choice but to use the dealer for repairs, and are at the mercy of the dealer who can charge whatever rates they choose. Ultimately, consumers are being denied the right to have their vehicle repaired at a workshop of their choice. We believe this also inhibits the consumer’s right to support local business.’
Mark Dommisse, National Chairperson of the National Automobile Dealers’ Association (NADA), believes the opposite, and says the proposed new code will have significant negative implications for the industry. ‘NADA fully recognises the need to broaden participation in the aftermarket sector and is committed to co-operating and assisting the Commission to address matters of concern raised in the proposed new Code of Conduct. The impact of implementing the code in its current form will, however, have a catastrophic effect on the economy as it undermines investment, employment and consumer welfare in this important sector of our economy.’
‘Only around 20% of the entire South African car park comprises in-warranty vehicles, and it’s this small portion which the new code is addressing. We feel that significant effort and focus should be placed on developing the other 80% of the industry – which is predominantly made up of out-of-warranty vehicles,’ says Dommisse. ‘We also believe strongly that manufacturers have the right to determine the standards of those that service their products, in much the same way that Boeing does with airliners or Apple does with cellphones.’
Another key issue is replacement parts. ‘There is no quality control of alternate parts coming into the country and we don’t believe that this is responsible. Who is going to police the parts and vehicles coming into the independent workshop?’ asks Dommisse. ‘If the industry is not required to use genuine or approved parts, there can be no monitoring of safety standards. If the independent workshops are going to use quality parts made by an original parts manufacturer and of the same specification, design and model, then this might, one day, in theory, be acceptable. However, the reality is that it is unlikely that all independent workshops will use these parts due to the very high cost. It is doubtful that the manufacturers will allow this during warranty. It is extremely important to emphasise that the sale, maintenance, repair and operation of a motor vehicle is ultimately about the safety of the customer.’
‘In general, we agree with the principles noted throughout the code. It is the application and machinations of it that we object to,’ continues Dommisse. ‘We want to build our competition but it’s not reasonable to do it immediately. We therefore support opening the market slowly and responsibly. There are no defined standards in the code yet. These need to be developed appropriately, and here we can help. In order for the automotive industry to continue to contribute positively to the South African economy, all stakeholders need to engage, discuss and constructively develop a meaningful and sustainable new Code of Conduct.’
Despite the current tough economic times, more independent workshops are opening their doors, with a growing number of these being black owned. The Motor Industry Workshop Association (MIWA) is an affiliate association of the Retail Motor Industry Organisation (RMI). MIWA Director, Pieter Niemand, says from July 2016 to August 2018, over 230 black-owned workshops became members out of a total of 520 that joined during that time. ‘This is encouraging. The majority of our members are small businesses. We believe it is our mandate to create and promote a culture wherein member businesses will meaningfully participate in transformation.’ However, Schmitz is concerned that if there is no change in terms of allowing these workshops access to fair competition in the market, they will not be open for long.
Sisa Mbangxa, Chairman of the African Panel beaters and Motor Mechanics Association (APMMA) agrees. ‘Over the years there has been a good response from entrepreneurs to government’s call of Vukuzenzele – the creation of jobs, the eradication of poverty, and sustainable development. The number of businesses in the automotive repair sector increased immensely. Unfortunately, they learnt that they can’t work on vehicles that are in warranty and are insured. They can’t even work on government vehicles due to red tape, monopoly and unfair competition within the industry. We believe that with the introduction of R2R, the previously disadvantaged artisans or workshops will be able to compete fairly with the historically advantaged workshops, as they will have access to technical information from workshops and branding where necessary.’ To this end, the Competitions Commission called for a draft Code of Conduct to be drawn up amongst all affected parties and, at the time of writing, two drafts have been tabled.