This year has indeed been a tumultuous one. With COVID-19, the lockdown, the ban of alcohol and cigarettes, etcetera, it is easy to miss some significant development that occurs in the legal field that affects consumers.
An important development has been that the Competition Commission has published draft Guidelines for Competition in the South African Automotive Aftermarket Industry. Industry role-players, the public and anybody with an interest had the opportunity to comment on these draft Guidelines up until 16 March 2020.
This short article will be a summary of the effect of the proposed Guidelines by the Competition Commission and also a very brief history of the “Right to Repair” debate.
The Gazetted draft guidelines seek to put an end to motorists being “dictated to” or “forced to” have their still in-warranty motor vehicles serviced or repaired only at manufacturer-approved service dealerships, under threat of having their warranties cancelled or voided.
It is your car – why can you as the owner not decide who and where it is serviced/repaired?
This is the argument of a Non-Profit Organisation called Right to Repair South Africa which has been advocating for freedom of repair choice for vehicle owners for years. At the other end of this debate is the Original Equipment Manufacturers (OEMs) – they argue these proposed changes may threaten the sustainability and profits of franchise dealerships.
The argument of consumer advocates not only here in South Africa but also in Europe is that franchised dealers charge a lot more money for labour and parts than smaller independent repair workshops, and many of these parts are virtually identical in quality (though not being Original Manufacturer labelled) — and are available at significantly cheaper prices elsewhere.
Original Equipment Manufacturers state that they should not be held responsible for substandard parts/components or poorer workmanship (so they claim) at non-franchised workshops and that they shouldn’t have to be forced carry out warranty repairs on such cars.
The result of the opposing parties not being able to reach consensus on this issue for years is that the South African Competition Commission went ahead and published the Draft Guidelines so long on the Right to Repair.
A brief summary of the more important sections are:
- Motor vehicle owners will have the opportunity to choose between taking their vehicles to franchised or independent repair workshops, and also choose between fitting original and non-original spare parts (where a specific part’s warranty has expired), without the risk of voiding their warranty;
- Vehicle Dealers and Financiers must now provide the consumer with details of all inclusions and exclusions included in the service and maintenance plans;
- The Guidelines proposes that maintenance and service plans be unbundled from the vehicle’s purchase price, with consumers being given the right to choose whether to purchase these plans or not. South African consumers will also be able to buy service plans from independent service providers;
- That technical data and repair instructions should be made available by manufacturers to the independent motor trade (smaller workshops) so that car owners are not obliged to take their car to a franchised dealer for service or repair if they so choose;
- The Bill also aims to remove high barriers to entry that exclude small and historically disadvantaged persons from becoming authorised dealers.
Although this is still only a draft that has been gazetted to date, it will be interesting to see the effect of the final Bill on the Motor Industry – improved consumer choice, promotion of more fair competition in the market – at least in theory – is the final aim. The new rules, however, will most definitely have a huge impact on franchised dealerships. It will also bring South Africa in line with what is already law in Europe and America on the Consumer’s Right to Repair. Only time will tell what the effect of the final law will be.
For any Consumer Protection & POPI related queries, contact your nearest SEESA office, alternatively leave your contact details on SEESA’s website.
Resources
- Draft Guidelines for Competition in the South African Automotive Aftermarket Industry
- www.compcom.co.za/submissions-automotive-code-of-conduct/
About the Author
Charl Fourie is a Senior Legal Advisor at SEESA’s Consumer Protection & POPI department in Port Elizabeth. He obtained an LLB degree and is an admitted attorney in the High Court of South Africa.