#Right2Repair your car: What a motor 'Code of Conduct' could mean for SA

Johannesburg - Following a probe into the local auto industry by the Competition Commission, the Right to Repair SA (R2RSA) campaign says progress is being made on a Code of Conduct that will bring much-needed change. 
 
Gunther Schmitz, vice-chairman of R2RSA, says at astakeholder workshop hosted by the Competition Commission earlier in 2017 it was agreed that a code would be drafted.

Schmitz said: "R2RSA has since then compiled a document containing points we believe need to be considered for the code and submitted these to the Commission. Our points are based on European guidelines and have been adapted to the South African context and Competition Act.

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"We are convinced that consumers and the aftermarket industry in South Africa are facing many of the same points challenged by our European counterparts." 
 
Besides general observations regarding access to repair networks, the submitted document also includes points relating to access to technical information; warranty and motor plans; and telematics. 

Code of Conduct for the auto industry

Schmitz said: "The history of international competition enforcement in the automotive aftermarket has shown certain anti-competitive restraints whether through explicit direct contractual obligations or through indirect obligations or indirect means.

"Suppliers wishing to influence a distributor's competitive behaviour may, for instance, resort to threats or intimidation, warnings or penalties. They may also delay or suspend deliveries or threaten to terminate the contracts of distributors that sell to foreign consumers or fail to observe a given price level.
 
"Transparent relationships between contracting parties should naturally reduce this. We believe that adhering to a Code of Conduct is one means of achieving greater transparency in commercial relationships between parties."

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Spare parts and pricing

Spare parts, and the access to and pricing thereof, also needs to be considered 

Schmitz said: "One of the objectives should be to protect access by spare parts manufacturers to the motor vehicle aftermarkets. This would ensure that competing brands of spare parts continue to be available to both independent and authorised repairers, as well as to parts wholesalers."
 
"The availability of such parts brings considerable benefits to consumers, especially since there are often large differences in price between parts sold or resold by a car manufacturer and alternative parts. Alternatives for parts bearing the trademark of the motor vehicle manufacturer (OEM parts) include original parts manufactured and distributed by original equipment suppliers (OES parts), while other parts matching the quality of the original components are also available." 

Tough economic conditions

Vehicle dealers in South Africa are under pressure, having to operate in tough local economic conditions, says the National Automobile Dealers’ Association (NADA).

Gary McCraw, director of NADA, presented the organisation’s findings at the recent Gauteng leg of the Business of the Year (BOTY) roadshow, a joint venture between NADA and Sewells MSXI, the world’s largest automotive retail solutions provider.

McCraw outlined the rapidly changing environment in which businesses operate these in SA. An upcoming change that could affect all dealerships is proposed changes to the Financial Intelligence Centre Act. According to Sewells: “These will be very onerous to dealerships if implemented as proposed."

McCraw said NADA would be engaging with the FIC authorities to consider the negative and costly impact that the proposed changes would have on dealers.”

'Freedom of choice'

The R2RSA committee is currently engaging with the Competition Commission on these issues.
 
Schmitz said: "Our goal is to ensure the Code corrects current practices and supports the Right to Repair campaign which aims to allow consumers to select where their vehicles are serviced, maintained and repaired at competitive prices in the workshop of their choice.

"There is a need for a fair and competitive regulatory environment that enables freedom of choice for the consumers and gives aftermarket Small Medium Enterprises a chance to stay in business." 

"South Africa needs to follow the international Right to Repair trend which promotes South Africa’s consumer rights. Our objectives are to raise awareness among consumers and bring about this change."