The Competition Commission has gazetted draft guidelines for the automotive aftermarket industry in South Africa, promising a big shake-up for car service and warranty plans in South Africa.
Currently, the majority of owners of new cars in South Africa are locked into using a vehicle manufacturer’s service centres, repair shops and parts in ‘embedded’ motor and service plans.
However, under the new guidelines, consumers will no longer be compelled to conduct in-warranty service, maintenance or repair work only at approved dealers or approved service providers.
The guidelines also outline planned changes for car insurance in South Africa. These changes include:
- Insurers must approve any service providers that meet their standards and specifications, to undertake service and maintenance work, motor-body repairs, non-structural repairs and mechanical repairs on vehicles during the warranty period;
- Insurers may not prohibit approved service providers or approved dealers from carrying out service and maintenance work, motor-body repairs, non-structural repairs and mechanical repairs on vehicles of other brands;
- Insurers must advise consumers, in clear and explicit terms, that they have a right to have the service and maintenance work, motor-body repairs, non-structural repairs and mechanical repairs of their vehicles undertaken by any service providers of their choice;
- Insurers must publish a list of all their approved service providers on their websites and/or other suitable media;
- Insurers must offer consumers a choice of approved repairers within their geographic area from which they can select to repair their vehicles. They are also prohibited from appointing an exclusive service provider within a designated geographic area.
The deadline for submission of comments on the guidelines is 16 March 2020.
A finalised set of guidelines will ultimately be implemented as part of the Competition Act and will give authorities the power to pursue anti-competitive behaviour through enforcement.