Naamsa is to submit its own automotive code to the Competition Commission for consideration. Photo: Supplied

PRETORIA – The National Association of Automobile Manufacturers of South Africa (Naamsa) is to submit its own automotive code to the Competition Commission for consideration.

Nico Vermeulen, director of Naamsa, confirmed on Friday this would be a suggested alternative to the draft code published for comment by the commission. He added that the vehicle manufacturing industry accepted the principles in the commission’s draft code, but “the operational application of those principles need further consideration and review”.

“We are in the process of finalising a code of conduct that draws on the Russian code and the EU code provisions and is particularly relevant to in-warranty work and training and other elements that will be submitted to the Competition Commission by the end of October,” Vermeulen said.

He said Naamsa was also proposing the commission conduct socio-economic impact assessment of the code they proposed.

Vermeulen's comments followed the National Association of Automobile Dealers’ Association (Nada) last week severely criticising the commission draft code, claiming it would damage the franchise dealers industry to the benefit of independent dealers.

Mark Dommisse, national chairperson of Nada, said if there was any attempt to make the code compulsory, Nada would definitely challenge it in court. 

Both Nada and Naamsa complained that comments and submissions to the commission about the code had been ignored.

Attempts to obtain comment from the commission were unsuccessful.

The major contentious issues in the commission’s draft code relate to allowing independent dealers or anyone else to service and maintain vehicles, including new cars, within the warranty period; the use of alternate or equivalent parts whose quality and safety had not been tested; and service and maintenance plans. Vermeulen stressed the industry was still in a process of engagement with the commission on the code, which was a voluntary one and if companies did not like it, they did not have to sign it.

He said the commission had suggested companies sign off on elements of the code rather than the entire code, but this was impractical.

Vermeulen said Naamsa believed the alternative code they would be submitting would meet the objectives of the commission and the industry would be prepared to commit to it.

He added that vehicle manufacturers and importers recognised and accepted the desirability to broaden participation in the automotive value chain, but  it should be done in an orderly, structured manner that took into account the legitimate commercial interests and viability of franchised dealers and automotive companies.

The safety of the consumer and the quality of products and service could not be compromised, he said.

Naamsa said in its initial seven-page submission to the commission in November last year that it was concerned that the content of the draft code would seriously and fundamentally compromise current and future investments in the country, because it undermined the way many global automotive players implemented their strategies.

It said the legality of the draft code was also questionable, because it appeared to ignore fundamental South African legal principles and also appeared to be in conflict with other legislation, such as the Consumer Protection Act and the Broad-based Black Economic Empowerment (B-BBEE) Act.

However, Busisiwe Ngwenya, the director responsible for compliance at the B-BBEE Commission, said in a submission to the commission last year that the code “did not raise any concerns or conduct that is contrary to the B-BBEE Act”.

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