There are significant changes on the horizon for the local automotive industry, and they will affect every South African seeking to buy, repair or service a car, says AutoTrader.

The changes, effective July 1, are owing to a series of guidelines published by the Competition Commission last year, regarding the local auto industry.

AutoTrader CEO George Mienie says the guidelines will introduce substantial changes to the car-buying and servicing processes. 

“These changes mean that original equipment manufacturers (OEMs, or vehicle manufacturers), dealerships and workshops will have to alter the way they do business in the future.”

The first change is a greater degree of freedom of choice, says Mienie.

Consumers who do not have insurance cover may repair their motor vehicles at a service provider of their choice at any point during the motor vehicle’s lifespan. 

This means they no longer have to go to a so-called “approved motor-body repairer”.

For various reasons, consumers’ options when it came to motor-body repairers have been limited in the past. 

“This won’t be the case in the future,” says Mienie.

OEMs now need to promote and/or support the entry of new motor-body repairers, with a preference for firms owned by historically disadvantaged individuals (HDIs). 

OEMs also cannot enter into exclusive arrangements, either with one or more approved motor-body repairer, for doing repairs on an OEM’s motor vehicles within a designated geographic area. 

In practice, this should mean that there will be more motor-body repairers available to do the work, and that the consumer has more options. In theory, cars should also be repaired faster, says Mienie.

The Competition Commission has also introduced increased flexibility regarding maintenance and service plans.

Dealers will not be able to include a maintenance or service plan in the purchase price of a vehicle – the plan has to be unbundled, explains Mienie.

This means that the consumer can say yes or no to buying a plan from a dealership. 

He or she is also free to shop for one elsewhere.

In addition, if a vehicle with a maintenance or service plan is written off by an insurance company, that plan must be passed on to the replacement vehicle, notes Mienie.

Another change is that dealerships should become less grandiose, he notes.

The commission says that dealership startup costs – at an average of R60-million – can be exorbitant and a high barrier to entry.

In future, OEMs will need to adopt measures to lower financial barriers to entry and promote the participation of HDIs in the dealership market, says Mienie.