New draft policy gives car owners more options in choosing service providers

THE Competition Commission has published a draft policy that would allow car owners to repair or service their vehicles using generic parts at shops not owned by manufactures, while keeping their warranties.

The Competition Commission is an independent statutory body that has a mandate to investigate, prosecute and regulate competition between firms in the market.

In the report, the commission states the policy is a result of two years worth of investigation into anti-competitive practices within the automotive industry. The purpose of the policy would be to widen the pool of Approved Service Providers who can undertake in-warranty service and maintenance work, mechanical and motor-body repairs.

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This would also allow consumers more options in choosing their service providers.

“The purpose of the Act (…) is to inter alia ensure that small and medium-sized enterprises have an equitable opportunity to participate in the economy and to promote a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged individuals,” it said.

Manufacturers would have to disclose and make public the quality criteria in their appointment of service providers and approve those who meet their requirements.

The policy would also require manufacturers to approve dealers selling generic/unoriginal spare parts provided they are of reasonable quality without voiding the customer’s warranty. In the case where manufacturers don’t approve dealers, they would have to publicly disclose their reasons.

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The commission has warned service providers and manufactures to not engage in price fixing when selling the products, that prices must be determined individually.

The commission has in the past been involved in fining media, construction and retail companies millions of rands to price collusion and anti-competitive behaviour.

Interested parties have until 16 March to submit written comments to Advocacy@compcom.co.za.
After the consultation phase, the commission will publish the final guidelines.

To access Guidelines for Competition in the South African AutomotiveAftermarket Industry: https://www.compcom.co.za/wp-content/uploads/2020/02/Draft-Automotive-Aftermarket-Guidelines-for-Comment-14Feb2020.pdf

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