15th March 2017

Bosch article MIWA supports Competition Commission approach

Bosch article

MIWA welcomes Competition Commission’s probe into car repair industry

The Motor Industry Workshop Association (MIWA), which represents 2 500 independent aftermarket dealers, launched the Right to Repair Campaign in 2013 and has been leading the way to bring about change since then. “South African legislature needs to follow the international Right to Repair trend which promotes South Africa’s existing consumer and competition laws,” explains Vishal Premlall, Director of MIWA. In essence the Right to Repair Campaign allows consumers to select where their vehicles are serviced, maintained and repaired at competitive prices in the workshop of their choice.

 

“We are thrilled that the topic is now in the spotlight with the recent announcement that the Competition Commission is investigating exclusionary conduct in the car repair industry,” he says. “Consumers have been facing tough economic times for a considerable period now so we welcome the Commission’s efforts to investigate finding a workable solution for the greater motor industry that will not only relieve the burden of consumers but will also facilitate discussion between industry stakeholders.”

 

Currently consumers are locked into restrictive warranties that are getting longer and they cannot choose where they service their vehicles during this time. Similarly, they are compelled to pay a much higher rate for repairs and parts for their vehicles under warranty when compared to the rates charged by independent workshops.

The parts price issue has already received wide and concerted international coverage through various territories’ Competition Commissions, the most recent being in India where the Competition Commission ruled against 14 car companies engaging in price manipulation.

Premlall believes that there has been a longstanding need for a fair and competitive regulatory environment that enables freedom of choice for consumers and which gives aftermarket Small Medium Enterprises a chance to stay in business. “We are looking at the sustainability of two sectors – consumers who need to be able to afford the servicing of their vehicles and the aftermarket workshop sector made up of 8 000 entrepreneurs wanting to make a living. Only strong, entrepreneurial competition will result in advantageous pricing for consumers and ensure that local businesses can continue to provide quality service in the neighbourhoods they serve and support,” he explains.

While 70% of vehicles in South Africa are out of warranty and the consumer can choose aftermarket workshops, 30% of the market remains locked due to restrictive warranty provisions. He adds that this is a lucrative part of the market that could aid in the growth and expansion of the independent workshop sector if it was granted access.

“We believe that collaboration is key to the success of Right to Repair and have been engaging with affected parties for some time. However, some role players have opted not to engage. This investigation will most likely bring these role players to the table and create an opportunity to tackle, what we believe is, prejudicial market behaviour.”

At the end of 2016 MIWA formed an external, non-profit company, Right to Repair South Africa, tasked with taking the Right to Repair Campaign to fruition. The company’s steering committee includes key industry role players including aftermarket parts suppliers, workshops and associations as well as consumer rights organisations. “The head of Bosch Automotive Aftermarket, Ewald Faulstich, is a member of this committee and we welcome his insights and expertise.”

The Competition Commission will be hosting a workshop in March and Right to Repair South Africa will be adding its voice to other industry players wanting to see change. “The Right to Repair initiative has come to the fore in many countries over the past 15 years and we believe the time is right for change in South Africa,” concludes Premlall.

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