Our contribution to automotive industry change
The automotive industry is not only the largest manufacturing sector in South Africa’s economy, comprising nearly one third of manufacturing output, it also invests billions of Rands every year, is a key employer and is critical to achieving inclusive growth in the country.
We have memberships in a number of industry associations, including naamsa, the Retail Motor Industry Organisation (RMI) and its constituent – the National Automobile Dealers Association (NADA), Southern African Vehicle Rental and Leasing Association (SAVRALA) and Banking Association South Africa (BASA). Motus representatives hold officer roles in a number of these associations.
During the year, R3,1 million was paid for subscriptions in non-governmental organisations (NGOs) and industry bodies (F2020: R3,0 million).
Manufacturing is one of the sectors that can best assist in growing South Africa’s economy.
The new Right to Repair guidelines customer, vehicle and parts safety have a strong transformation objective with aspirational targets to increase local production volumes, create jobs, optimise local content and transform the automotive value chain.
Broadly, the guidelines aim to:
- Promote an inclusive automotive value chain; by lowering perceived barriers to entry, growing the pool of approved providers, particularly black-owned emerging workshops and independent operators, and ensuring the fair allocation of work. The guidelines require OEMs to increase ISP access to technical information, technical training and spare parts. To provide work to a wider pool of businesses, the guidelines require that exclusive arrangements between OEMs and approved motor-body repairers not exceed five years, and similarly the appointments of panel beaters by insurers may not exceed five years.
- Reduce costs and increase transparency for consumers; by giving them the choice to have their vehicles serviced, maintained and repaired by non-OEM accredited workshops without affecting their warranties. The guidelines also require the unbundling of manufacturer-instituted maintenance and service plans, giving consumers the choice to purchase the vehicle and service/maintenance plan separately or at the same time.
We have established a cross-function working group to investigate the impact that the guidelines will have across our business, identify opportunities and cater for changes to the business model for any perceived risks. Our vast expertise in the servicing of vehicles and procuring parts from OEMs and non-OEM, and our integrated business model, means that Motus is well positioned to implement the guidelines.
We have launched four pilot Auto Pedigree Service Centres (Polokwane, Germiston, Bloemfontein and Westgate) to compete in the ISP space. The service centres provide major and minor services, brakes and clutch replacement, suspension, transmission repairs and engine overhauls. The throughput in these service centres, which offer both OEM parts and approved Motus aftermarket parts, has increased steadily since the first workshop opened. By June 2022, we aim to have a network of 25 Auto Pedigree Service Centres.
An additional objective, is to support black-owned approved panel shops as part of our enterprise and supplier development initiatives.
There may however be unintended consequences to Right to Repair, including increased costs for consumers as a result of sub-standard work at non-OEM accredited workshops, and a negative impact on warranty programmes and residual values of ISP serviced vehicles. Through our memberships in naamsa and NADA we consult with our industry peers and the Competition Commission to achieve sound and pragmatic outcomes, and ensure that our approach is robust, fair and sustainable. We are also engaging with our partner OEMs to ensure we align with the Right to Repair strategy, and with our dealership networks in the UK and Australia, to understand how similar legislation in those jurisdictions have impacted their markets.