SISA MBANGXA
Johannesburg - During his State of the Nation Address (Sona) before a joint sitting of Parliament, President Cyril Ramaphosa set out bold plans and made an undertaking to promote investment and develop master plans in sectors of the economy such as automotive, clothing and textile, poultry, sugar, agriculture and global business services.
As the African Panel-Beaters and Motor Mechanics Association (APMMA), we duly welcome President Ramaphosa’s announcement of these bold initiatives to tackle the country’s urgent needs. We, however, expect nothing but drastic action from the government to implement these initiatives, particularly in the after-market automotive industry.
In total, the automotive after-market industry contributes at least 7.5% to South Africa’s GDP and directly employs just over 110 000 people in the vehicle assembly and components supply industry. The automotive after-market remains an important industry in the South African economy, and has created most of the much-needed jobs. The stakes for the established vehicle industry have never been greater than now.
The automotive after-market industry is responsible for the manufacturing and sales of automotive replacement parts and accessories through independent retailers and repair shops directly to the consumer rather than to the OEMs themselves.
The after-market industry also re-manufactures, distributes, retails, and installs motor vehicle parts and products other than the original equipment components. But, as it were, Small and Medium Enterprises (SMMEs) in the automotive after-market industry continue to face major challenges, such as lack of transformation and the lack of funding for black-owned businesses.
APMMA, however, welcomes the recently published Automotive guidelines by the Competition Commission Tribunal, which gives independent workshops much-needed access to the market, which has been exclusively enjoyed by motor companies for years.
The guidelines provide practical guidance for the automotive after-markets industry and are intended to promote inclusion, including encouraging competition through greater participation of small businesses as well as historically disadvantaged groups.
Over the past decade, the Competition Commission Tribunal received complaints regarding the allegations of anti-competitive conduct in the after-market value chain. The allegations included exclusionary agreements and/or arrangements between OEMs and Approved Motor-body Repairers, the exclusion or foreclosure of Independent Service Providers in the markets for the service and maintenance and Mechanical Repairs for In-Warranty Motor Vehicles; unfair allocation of work by Insurers; restrictions on the sale of Original Spare Parts to ISPs; high barriers to entry that exclude Small and Medium Enterprises and historically disadvantaged individuals from becoming Approved Motor-body Repairers and Approved Dealers; and a lack of competition and consumer choice in the sale and fitment of Spare Parts.
At APMMA, we continue to call upon the government – that is, National, Provincial, Local governments and State-Owned Enterprises (SOEs), being the major consumers, or having the biggest fleet in the country, to lead by example and service and repair its cars with 100% black-owned companies.
We are making this call because established motor companies continue to enjoy the government and private fleet work, while black-owned businesses are still not allowed, or allowed to work on the private fleet, despite legislation and the automotive guidelines published by the Competition Commission.
Thus far, APMMA has about 60 workshops that are ready to take the advantage of the recently published Automotive Guidelines, but that is just a drop in the ocean. We are deeply concerned and continue to work around the clock to ensure that the numbers increase exponentially.
We are currently in the process of setting up our development fund, working closely with the Department of Labour and Employment, the Small Enterprise Finance Agency (SEFA), the Department of Trade, Industry and the Competition Commission Tribunal.
As an advocacy group in the industry, APMMA also calls upon individual motorists to exercise their right to choose where to service and repair their in-warranty vehicles without fear of their manufacturer’s warranty being voided.
We are concerned that there has been no communication or collaboration between government departments. Seemingly, the Ministry of Finance does not know what the Department of Trade Industry and Competition Commission does.
Ditto, the National Department of Transport. Even where there is available knowledge, there seems to be no plan or strategy to implement resolutions jointly to change the plight of black-owned businesses. At APMMA, we believe that if the communication among government departments can be improved, we will not have the challenges that SMMEs are currently faced with, such as lack of funding and opportunities.
Recognising black automotive associations, and working closely with them, can also assist to remedy the situation and give effect to real transformation. Lastly, we believe the Competition Commission Guidelines for the automotive aftermarket industry will eventually bring back dignity to people by creating decent jobs, while creating viable and sustainable entrepreneurs, especially in previously and presently disadvantaged areas like townships and rural areas.
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SISA MBANGXA is the President and founder member of the African Panel Beaters and Motor Mechanics Association.