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5 ways the new SA car industry code could affect you

2017-10-19 08:31

Image: iStock

Cape Town - The right to choose where you wish to repair your vehicle, full disclosure of all costs associated with your car... a code of conduct for the local car industry could give SA motorists more choice.

In September 2017, the Competition Commission published a draft version of a Code of Conduct for the South African automotive industry.

Its primary goal is to promote fair competition in the automotive industry and to open up the aftermarket (the market for spare parts and accessories) for previously disadvantaged individuals/workshops who want to become active participants in the economy.

Law For All's managing director Adv Jackie Nagtegaal, says: "Essentially, the Code wants to break what’s often a closed loop dictated by exclusive agreements between car manufacturers, dealerships, insurers and service/repair providers, which leaves consumers with little choice when it comes to product choices and prices, and creates an impenetrable barrier for disadvantaged individuals who wish to enter the market."

READ: Code of Conduct for SA auto industry - your rights as a car owner

The Competition Commission will invite the key players in the industry to become signatories of the Code, after which they will be bound by regulations. 


What do you think of the proposed Code of Conduct for the auto industry? Email us 


Should this Code of Conduct become law (the draft is open for public comments until November 3 2017), these are 5 ways in which the industry could be affected:

1. Dealerships that sell new vehicles or products from competing manufacturers will not be allowed to set prices that have been co-ordinated between them. The pricing process (which includes the vehicle and service plan costs) will have to be transparent.

2. Car manufacturers will not be allowed to impose unnecessarily strict requirements on smaller independent dealerships. Meaning, they must be reasonable when it comes to the size of the space, showrooms, general aesthetics and finishes of the dealership.

3. Independent service providers will also be allowed to undertake in-warranty maintenance and service work and use unbranded parts.

“For example, if you own an Audi, you won’t be obligated to take it to an Audi dealership for mechanical work. That said, the independent service provider will have to use spare parts that are of matching quality to the original ones, and will be accredited by the South African Bureau of Standards or The South African National Accreditation System,” says Nagtegaal.

4. In line with the above, original equipment manufacturers/car manufacturers must supply independent service providers with product and parts-fitment training, which includes instruction on how to carry out maintenance and repair work on that specific make of vehicle. 

5. In terms of your rights as a consumer and in the spirit of complete transparency; when you buy a vehicle, the dealership must provide you a complete disclosure regarding the following costs:

  • purchase price of the vehicle
  • any policies or plans included in the purchase
  • dealer and any other commission

As previously mentioned, members of the public (particularly in the automotive industry) are invited to make comments until November 3 2017.  

All submissions must be typed or handwritten (preferably in English) and marked for the attention of Mr Mziwodumo Rubushe (MziwodumoR@compcom.co.za) 


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