Chaos hits car buyers
2007-04-22 09:35
Johannesburg - South Africa's growing middle class, the mainstay of the booming motor industry, became the sector's biggest casualty last week.
It happened when the new web-based traffic registration system came close to collapse shortly after its launch last Tuesday, causing losses of about R1 billion in the industry.
Key players in the motor industry are alarmed at the chaos caused by the national transport department's attempts to replace the old National Traffic Information System with an online version, eNatis.
The move has plunged the industry into economic crisis. As a result, the registration of new and pre-owned cars and the renewal of car and driver's licences have been temporarily halted, creating huge backlogs in the process. There are fears that the domino effect of the collapse of eNatis could have devastating effects on the economy.
Motor manufacturers cannot ship units to dealers because they are forced to keep cars already sold in their showrooms. Dealerships can't release the cars to buyers because they first need the banks to pay them.
They are not receiving the payments because banks require the dealerships to register the cars.
And because registration has stopped or changed to a snail's pace in other areas, car buyers - mostly the black middle class dubbed the Black Diamonds - have to endure longer delays or drive cars not meeting legal requirements at great risk to themselves and others.
Although government officials said earlier in the week that they were experiencing technical hitches with the system, transport department spokesperson Ntau Letebele claimed there was "nothing wrong" with eNatis. But industry players and customers contradicted him.
Chief executive of the Retail Motor Industry organisation, Jeff Osborne, said matters were in "a state of chaos".
"The failure to register new and pre-owned vehicles has affected everybody's cashflow. We have lost a billion rands and thousands of deals. The system is worse than the old one," he said.
So frustrated was Joe Venter, general manager of Kia Motors Sandton, that he placed an advert in a daily newspaper on Friday asking for his clients' magnanimity.
Venter was scathing about the transport department.
He said his clients should bear with him "until the authorities come to their senses and rectify the situation by (at least) issuing temporary permits manually in the interim.
"If things don't improve, we will have to find empty rugby fields to store some of the backlog of vehicles in our showrooms," he said.
Venter said he had more than 207 cars waiting in his showrooms.
He said he had lost about R3.5 million in just over a week and that the costs could rise to R10 million in two weeks.
Motorists also poured scorn on Letebele's claims that there was "nothing wrong" with eNatis.
Cecil Kekana, an engineer who wanted to trade in his old car for a new Opel Astra, said the delays meant that he now had to pay two car instalments, one for a car parked at a dealership because of the eNatis delays.
Another frustrated motorist, Siyabulela Vimbela, an IT specialist from the Eastern Cape, said he had been trying to renew his car licence, but had found himself in long queues.
He said what was worse was that the authorities had not told people waiting in the queues that it (the department) had been forced to "close until further notice" because of problems with the system.
Long queues snaked out of the Pretoria city centre licensing department on to the street late on Friday. People impatiently jostled one another for space. Despite this, Letebele was adamant that the system was functioning very well.
"The claim that the industry has lost billions is nonsense. There is (also) no need for temporary permits to be issued because the system is working. We had a transaction rate of 45 000 cars an hour on Friday."
But Letebele would not say how many cars were usually processed.
AA spokesperson Garry Ronald said it had received countless complaints from frustrated motorists who could not renew their vehicle licences. He said the transport department's lethargy at sorting out eNatis would also affect the motor insurance of drivers.
"The department has to get the system to work . . . and clearly, it doesn't at the moment," said Ronald.
Elias Moshoe of Outsurance warned that motorists could find themselves in serious trouble if they were involved in vehicle accidents while driving cars that were not properly registered.