Capital Equipment News August 2021

AFTERMARKET – RIGHT TO REPAIR

EverStar believes the Right to Repair campaign and the commission’s guidelines will eliminate competition in the automotive sector.

Imminent transformation for SA’s aftermarket sector Right to Repair South Africa seeks to transform the vehicle aftermarket sector in line with guidelines set by the Competition Commission to promote an open, competitive aftermarket where the choice of service provider is dictated by price and quality, rather than by contract provisions. This feature explores these guidelines, which took effect on July 1 this year, and takes a look at how the transformation will affect OEMs and service providers. By Mark Botha .

R ight to Repair South Africa lobbying and advocacy work in support of the rights of the end-user and independent service provider in the automotive industry, among several others. “We are in full support of the Guidelines for Competition in the South African Automotive Aftermarket published by the Competition Commission,” says R2RSA CEO Kate Elliott. “We believe that it is not possible to have a productive, open market where monopolies are allowed to continue unabated.” The guidelines in question were drafted in terms of Section 79(1) of the amended Competition Act No. 89 of 1998, which provides that the Competition Commission may prepare guidelines to indicate its approach on any matter falling within its jurisdiction. Published by the Competition Commission in a December 10, 2020 document, the guidelines aim to “provide guidance for the automotive aftermarket industry, intended to promote inclusion and to encourage (R2RSA) is a non-profit company founded to champion the worldwide Right to Repair campaign, which conducts

where there are monopolies in place. We hope to expand our work to other sectors in the coming years.” The guidelines The principles outlined in the Competition Commission’s guidelines are said to be based on its experience of “various anti- competitive concerns identified in the automotive aftermarket industry, broader policy objectives of the country, as well as on guidance from other jurisdictions concerning competition between OEMs, insurers, approved dealers and approved motor-body repairers, as well as independent service providers (ISPs)”. These concerns were addressed by adopting various regulations obliging authorised repairers and service providers to not use original parts from approved manufacturers only, but to also include parts of matching quality procured from other suppliers. Vehicle manufacturers may not hinder original parts or component suppliers from also supplying their own products as spare parts to independent or authorised distributors, and authorised repairers are free to procure original parts or parts

competition through greater participation of small businesses as well as historically disadvantaged groups”. Objective Elliott says the objective of the Right to Repair campaign is to achieve an “open, competitive automotive aftermarket where vehicle owners’ choice of provider is dictated by the price and quality offered, rather than by restrictive contract provisions”. She says such a market will not only benefit the end-user, but will also ensure long-term, broad-based economic growth. “We hope to turn the automotive aftermarket in South Africa into a leading example of what can be achieved where access to the market is opened to all service providers.” Capital equipment sector She says that, although the automotive sector is currently the starting point in South Africa, the plan is to expand the Right to Repair campaign to the capital equipment sector, among others. “The principle of Right to Repair is equally applicable in all industries, particularly

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