Customers will have an option to choose a service provider of their choice under a vehicle maintenance plan/and or service plan. Moreover, manufacturers and approved dealers are obliged to make original spare parts available to independent repairers to perform service, maintenance or repair work. Certainly, black independent suppliers can explore the potential for growth in these two areas.
Big changes to car sales and services in South Africa ,which have came into effect the beginning of this month (1 July 2021), have opened up opportunities for different players in manufacturing, repairs, insurance and financing for small micro and medium enterprises (SMMEs) in the business of servicing and maintenance of vehicles. Without question, from an economic transformation perspective, the most groundbreaking aspect of the reforms is the provision for the participation of historically disadvantaged individuals through promoting “economic access, inclusion and greater spread of ownership”.
The Competition Commission’s guidelines on the unbundling of the maintenance plan/and or a service plan at the point of sale from the purchase price of the vehicle will open doors for enterprising black independent suppliers to the lucrative automotive aftermarket business. For years, this niche business has been exclusive to so-called preferred dealerships.
Levelling the playing field
It is important to understand how the changes, if fairly implemented, will level the playing field.
When customers buy a new vehicle, they are typically sold a maintenance plan and/or service plan, included in the purchase price of the vehicle . This is unbeknown to most customers, who wrongly think that the maintenance/service plan is an incentive, big favour or a privilege.
Thus, the unbundling may make the purchasing of these maintenance plans/service plans easier for some customers who would prefer alternative service providers offering competitive rates.
However, it has to be noted that some customers can, and do purchase these value-added products (maintenance plan and/or service plan) outside of the standard manufacturer’s provided plan from other third-party suppliers.
Dealers will no longer take advantage of customers as disclosing the price of the vehicle and the price of the value-added products separately before the sale is now mandatory.
Another area where black-owned repair shops or service centres will benefit is in obtaining approved/original spare parts from manufacturers. Manufacturers and approved dealers are obliged to make original spare parts available to independent repairers to perform service, maintenance or repair work.
Previously, independent repairs could not get parts from manufacturers. This arrangement potentially deprived consumers from shopping around and potentially getting a cheaper deal on their repairs.
However, the only parts which can have conditions attached are those that deal with the security systems of a vehicle.
The onus is upon black independent suppliers to make the most of opportunities the changes will bring by offering excellent services to customers.
