The final guidelines for competition in the South African automotive aftermarket will come into effect from 1 July, says the National Automobile Dealers’ Association (NADA).
The guidelines state that owners of new cars in South Arica will have the right to repair or service their vehicles at an independent provider of their choice.
These owners won’t be locked into restrictive embedded motor or service plans, and vehicle manufacturers won’t be allowed to void warranties if owners choose to go with an independent service or repair provider.
Some of the key changes include:
- Dealerships and manufacturers can’t lock you in – Car manufacturers cannot obstruct you from seeking service, maintenance, or mechanical repair work for your new motor vehicle at an independent Service Provider (ISP) of your choice.
- Unbundling of plans at point of sale – There will be an unbundling of maintenance plans and service plans at the point of sale from the purchase price of the motor vehicle. This will allow consumers to exercise choice regarding whether or not they want to purchase the maintenance plan or service plan from their dealership or from an independent provider.
- You can fit non-original parts – Consumers will be able to fit original or non-original spare parts, whether by an approved dealer, motor-body repairer, or an ISP, during the in-warranty period. The quality of these parts will be dealt with in line with consumer protection laws, as well as existing warranties.
“The guidelines require Original Equipment Manufacturers (OEMs) to adopt strategies and develop business models that, among others, allow for independent service providers and historically disadvantaged individuals (HDIs) to undertake service and maintenance while a vehicle is in-warranty,” said Mark Dommisse, chairperson of NADA.
They also place responsibility on OEMs to disclose certain information to consumers, such as the price of any pre-included service plan, maintenance plan, extended warranty or scratch and dent product, to enable them to make informed choices about the required future maintenance of their vehicles.
While the guidelines formally come into effect on 1 July, it’s important that customers and stakeholders understand that these guidelines are not law, but rather a series of non-binding applications for use by the Competition Commission of South Africa (CCSA) in interpreting certain sections of the Competition Act as they relate to the automotive aftermarket, Dommisse said.
“Consumers will need to communicate with relevant dealers to understand what is and what is not possible with regard to respective OEMs’ processes and procedures, and terms and conditions.”
When the guidelines take effect, consumers will be in a position to choose to undertake servicing and maintenance work at a workshop of their choice, including ISPs.
But, by doing so, there will be certain obligations and consequences as set out in the guidelines such as possible voiding of parts of the warranty, said Dommisse.
“If an ISP or any entity wishes to become an approved dealer, the OEM must have fair and transparent selection criteria and if the ISP meets those criteria, then the OEM should approve them.”
He added that an OEM is only obliged to approve an application if that ISP meets the full terms, conditions and criteria set out by the OEM.
“This is vital for consumers to understand and is incorporated into the guidelines in order to protect the customer and the integrity of their vehicle,” said Dommisse.
A word of warning
When working on the vehicle of a consumer, independent service providers must disclose whether they have adequate insurance to cover all liability or potential damage to the vehicle, must disclose the risk in servicing at an ISP (to the warranty) and the fact that the OEM or their provider will not pay for any work done.
They will also carry full liability and risk for the work that they do, said Dommisse.
“Consumers should remain critically mindful that if their vehicle is not serviced or repaired correctly, and at an ISP, it could still have an impact on their vehicle’s factory warranty under the guidelines,” he said.
He added that any damages to a vehicle as a result of work performed or non-original spare parts fitted by ISPs will be assessed by respective OEMs and either parts of, or the entire warranty can be voided.
Any disputes will be handled by the Motor Industry Ombudsman of South Africa (MIOSA) and ISPs will need to ensure they are meeting their legal obligations in terms of the Consumer Protection Act.
While consumers will invariably have more choice when it comes to having their vehicles serviced and maintained, it is important that they make informed decisions and follow appropriate due diligence before appointing any workshop to service their vehicle, said Dommisse.