Gauteng is the most expensive region for retail passenger vehicle labour rates in South Africa, while the Free State is the least expensive province when it comes to labour costs, a recent labour rate research report conducted by market intelligence solutions provider to the automotive sector RGT Smart revealed.

Retail labour cost increases among brands surveyed have increased on average by 4.1% year-on-year.

According to the report, Fiat’s retail passenger labour rate has increased the most since 2011, by 16.3%, followed by Alfa Romeo at 12.2% and Citroen at 11%

Brands that have reduced labour rates year-on-year since 2011 included Changan, with -10.5%, Subaru with -5.5% and Daihatsu with -0.6%.

The report showed that the most expensive passenger vehicle brand to have serviced in South Africa was Mini at an average of R602.27/h, followed by Audi with an average of R583.62/h, BMW at an average of R580.13/h and Lexus at an average of R579.09/h.

The least expensive brand to have serviced was Chana, which achieved an average of R342.52/h, followed by Mahindra at an average of R362.29/h and Tata, which costs R385.30/h on average to service.

RGT Smart CEO Paul De Vantier added that in the Gauteng region labour on a medium-sized or large vehicle was most expensive, while labour on a subsmall or entry-level vehicle was the least expensive.

“Labour rates in the Western Cape are most expensive on a medium-sized vehicle and least expensive on sub-one-ton vehicles. Labour costs on medium-size vehicles seem to be the most expensive across most provinces,” he indicated.

In the medium-sized vehicle basket BMW was the most expensive brand to service, while the least expensive brand in the medium basket was Volvo.

De Vantier said the Northern Cape province reported the highest year-on-year retail rate increase, with an increase of 10%, followed by the North West with a 9.5% increase and Limpopo with 7%. The lowest retail rate increase was 2.8%, which was recorded in the Free State.

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Meanwhile, servicing commercial vehicles in South Africa was on average 7.1% more expensive this year than in 2011.

The report, which compared the service labour rates of various heavy-duty vehicles per province, such as Isuzu Trucks, Tata, Mercedes Benz and UD Trucks, showed that the average increase was only marginally higher than that of the inflation rate recorded in March this year of 6.1%.

“There is not enough adequate data regarding labour rates across provinces for different brands in the heavy-duty vehicle sector. The report attempts to fill this gap and to provide an industry guide for fleet owners and operators in this uncertain economic climate,” said De Vantier.

He explained that from a fleet-management perspective, the report revealed that it was advisable to factor in the servicing rates and dealership footprint when deciding which brand to purchase. “As fuel and insurance costs are already so high, additional heavy-duty vehicle servicing costs can significantly affect a company’s bottom line.”

Further, the report, which was compiled from over 150 dealers, indicated that the most expensive heavy-duty vehicles to have serviced in South Africa were Mercedes-Benz (average R483.91/h), Hino/Dyna (average R452.04/h) and Fuso (average R442.95/h). The least expensive was Tata (average R383.10/h), followed by Iveco (average R383.68/h) and UD Trucks (average R394.06/h).

Tata’s year-on-year retail labour rate increased by 16%, the highest among brands surveyed, followed by MAN at 10.1% and Isuzu Trucks by 8.1%.

The province that reported the most expensive heavy-duty retail rate thus far in 2012 was Limpopo, whereas the Western Cape was named the least expensive province to service heavy-duty commercial vehicles IN. The Western Cape reported a mere 3.9% year-on-year increase in rates since 2011, with the Eastern Cape reporting the highest retail increase since 2011, at 9.2%.

“While it is important to note that the report reflects average prices and even within regions or brands there will be variances, our report shows that if you own a MAN vehicle, on average KwaZulu-Natal will be the cheapest province to service your vehicle. However, the most expensive province to have a MAN vehicle serviced inis Gauteng,” says De Vantier.

He added that KwaZulu-Natal commercial van users could expect to pay more for servicing Iveco, Fuso and Freightliner brands, but less for MAN and Tata.

“In an increasingly competitive environment, dealers and manufacturers are becoming aware of the value of information in driving such decisions and sophisticated data will become the motivation behind operational decisions affecting rate structures,” De Vantier stated.