The Competition Commission announced it will put a plan into action that aims to level the playing field between OEMs (original equipment manufacturers) and independent service providers (ISPs).
If accepted and/or unopposed, the drafts in the gazette will be accepted in 2020 and force OEMs to comply with the new rules. The drafted guidelines aim to take care of the consumer and have them service their vehicles at a station more convenient for them.
Should the proposed amendments be approved, consumers will no longer run the risk of having their maintenance or service plans voided by automakers. In previous years, OEMs required consumers to have their vehicles serviced at a registered dealer, or at an approved service provider.
Failure to do so would have any warranty scrapped.
How will the proposed amendments affect you as the consumer? Email us.
For the small business
An important factor regarding the amendments is the benefit it holds for small businesses. In previous years, the small independent players lost business because of the limitations put on them. The amendments will allow for these small businesses to offer their services to the consumer.
However, ISPs have to be cleared by the OEM. The proposed draft by the Competition Commission notes under point 6.1.1: “OEMs must approve any Service Providers that meet their standards and specifications, to undertake service and maintenance work, motor-bodyrepairs, non-structural repairs and mechanical repairs on Motor Vehicles during the Warranty period, including applicants who seek approval for service and maintenance-only workshops.”
By approving an ISP, the OEM protects itself, its products, and, importantly, the consumer. This will go a long way in aiding economic growth in South Africa, while at the same time maintaining reputability among consumers. OEMs, however, is not allowed “to enter into exclusive arrangements” with ISPs, according to point 6.1.8.
ISPs are often limited by not stocking original parts. The amended draft now allows for pirate parts to be fitted to new vehicles. It remains the responsibility of both the OEM and ISP to fully inform the consumer about the risks involved with fitting a non-original spare part (9.1.3).
If the consumer decides to continue with the fitment of a non-original part, the OEM has to respect such a decision.
According to point 9.1.1: “OEMs and/or Approved Dealers must allow consumers to fit “nonoriginal spare parts” where the specific part’s Warranty has expired, without voiding the balance of the Motor Vehicle’s Warranty.”