CLOSE X
Advertisement

Motor industry to be investigated for collusion

Industry news

Cape Town - The Competition Commission is now investigating the motor industry for collusion in the panel beating and dealership market.

Competition Commission head Thembinkosi Bonakele told MPs on Tuesday the commission wanted to open this sector to small, medium and micro enterprises because it was closed to them.

Share this story
Competition Commission says it would be a victory for small, medium and micro enterprises if the industry opened up the market.

He said big companies had agreements with some of the dealerships for motorists to service and maintain their cars. This prevented motorists taking their cars to any small players in the market. Car owners ended up paying a lot, using the big companies.

Bonakele said: “We have identified a problem as a result of a number of complaints regarding the aftermarket. After buying the car you have to maintain the car.

"We have found this market is closed because there are agreements where you can service a car,” he said.

There were dealerships that motorists had to deal with directly, and not any other dealership.

“This is having a huge impact on small, medium and micro enterprises because there are people who could be running workshops.

Competition Commission wants to open the motor industry to small, medium and micro enterprises.

"Panel beating is even worse. Panel beating is restricted for luxury cars. The few who do the work charge a lot,” he said.

In many parts of the world, he said, this problem had been solved. In Russia "they require the industry to open up the market”. Europe had also opened the industry to small players.

This practice also affected people who manufactured motor vehicle components, Bonakele added.

"We have met with the industry and we are not finding justifiable answers for these restrictions,” he said.

The competition commission will meet with the industry on 17 March to decide how to resolve the problem on the table, rather than imposing tough penalties.

He said it would be a victory for small, medium and micro enterprises if the industry opened up the market. This industry need new small players who had been locked out for a long time.

It would also be a reprieve for motorists who were forced to use certain workshops to fix their cars and pay a lot of money.

The lessons the commission had drawn from overseas showed that the motor industry could be opened up to small players.

The Argus

Like us on Facebook

Follow us on Twitter

Share this story
Advertisement
X