15th March 2017

MIWA supports Competition Commission approach

Media release

February 2017

 

MIWA welcomes Competition Commission’s probe into car repair industry

 

The Motor Industry Workshop Association (MIWA) welcomes the Competition Commission’s probe into, amongst others, exclusionary conduct in the car repair industry. “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,” says Vishal Premlall, Director of MIWA.

For several years through its Right to Repair Campaign, MIWA has been campaigning to allow consumers the right to select where their vehicles are serviced, maintained and repaired, at competitive prices and in the workshops of their choice. MIWA has regularly attempted, without success, to engage industry stakeholders to assist it in realising this shift in what it views as prejudicial market behaviour.

“Currently consumers are locked into restrictive warranties that are of long duration and they cannot choose where they service their vehicles during this time,” says Premlall. “Consumers are similarly 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. “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.”

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.

“Right to Repair South Africa will be adding its voice to other industry players wanting to see change at the upcoming workshop hosted by the Competition Commission. The Right to Repair initiative has come to the fore in many countries over the past 15 years and the time is right for change in South Africa,” he concludes.

ENDS

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