New car service guidelines come into effect next week – what every driver in South Africa should know

The South African Automotive Aftermarket Competition Guidelines come into force on July 1, 2021.

In anticipation, the Competition Commission recently held a workshop to discuss what the guidelines mean for consumers and other industry participants.

The guidelines are the result of more than a decade of complaints received by the Commission from Independent Service Providers (ISPs) and other industry players about exclusionary behavior at all levels of the service chain. automotive aftermarket supply, law firm Bowmans said.

They aim to provide guidance for the automotive aftermarket industry and aim to promote inclusion and encourage competition through greater participation of small and medium-sized enterprises (SMEs) as well as historically disadvantaged people ( PEH). However, the guidelines do not have the force of law.

Below, Bowmans gave an overview of the commission’s workshop and what the changes will mean for drivers.

What the guidelines mean for consumers

The guidelines aim to increase consumer choice. Once in effect, they will allow consumers to repair their motor vehicles at the service providers of their choice.

In addition, consumers will be able to choose whether or not to install original spare parts on their vehicles and will be able to source from the ISPs of their choice, whether their vehicles are under warranty or not.

“While consumers have increased choice, the commission warned that consumers should always be aware of the potential risks associated with third-party ISP service and repair work, and in particular, the risk that certain warranty provisions on the vehicle engine may become invalid or void under circumstances where the selected ISP is found to be at fault,” Bowmans said.

“The commission reminded consumers that in the event of a dispute with their service providers, resellers or insurers, they should contact the appropriate reseller or OEM complaints department and follow internal complaints procedures.”

If no resolution is reached, an appeal can be made to the Motor Industry Ombudsman of South Africa (MIOSA).

When the conduct potentially violates the Competition Act, consumers can also go directly to the commission. If necessary, compensation can also be requested from the National Consumer Commission.

Participation and lowering barriers to entry for SMEs and HDPs

One of the main objectives of the guidelines is the need to promote the entry and participation of SMEs and HDPs in the automotive aftermarket.

The guidelines aim to achieve these goals by encouraging industry stakeholders to adopt measures to facilitate:

• Increased entry, promotion and support of SMEs and HDPs as authorized dealers;
• Abandoning the practice of OEMs entering into exclusive agreements with bodybuilders;
• Ensure that ISPs can undertake service, maintenance and repair work under warranty; and
• Ensure a fair distribution of insurers’ work among insurance panel service providers, with no service provider sitting on a panel for more than five years.

Go forward

Although the guidelines are not binding law, the commission made it clear that they reflect the commission’s policy position regarding what would be considered anti-competitive in the industry going forward, Bowmans said.

“The commission also noted that it is interested in seeing how the industry will implement the guidelines in daily practice and that it will carry out periodic evaluations to monitor compliance with the guidelines.

“In practice, this means that the commission will meet and obtain information from relevant industry stakeholders to determine how the industry is applying the guidelines.”

How the application of the guidelines will unfold is – of course – not certain.

Industry players may need to adopt purposive interpretations in certain cases where compliance is commercially impossible, Bowmans said.

“To that end, it is not implausible that the guidelines could evolve over time based on experience and application.

“The key message however is that transformation needs to be encouraged across the value chain, with the various key players leading initiatives to do so.”

Commentary by Judd Lurie, Nazeera Mia, Sian Fagan and Aneesa Ravat of Bowmans Law Firm.

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