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Black panelbeaters have a tough time breaking into the R5billion-a- year market because many insurance companies prefer to endorse larger, more established businesses.
But though industry players say this year will be challenging for small businesses, things are starting to look up.
Sthembela Nkosi, who manages Zombodze Panelbeating and Spray painting in Orlando West, Soweto, says business has started showing signs of growth.
This follows a revamp of the 30-year-old shop in June, with the help of Alexander Forbes Risk and Insurance Services and the National African Federated Chamber of Commerce.
"The business has not yet expanded to meet our expectations, but we have grown bigger than ever before," said Nkosi.
"Before the upgrades we only worked on one car a week, but now we have about three to four cars coming in."
A new frame rack was installed along with a spray booth, mixing room and computers with software to operate the machinery.
This was the first project of its kind in the industry with about R300000 invested in the shop.
National Union of Metal Workers South Africa (Numsa) spokesman Mziwakhe Hlangani is convinced that there is a cartel in the auto-body industry designed to sideline black-owned businesses.
"There are many challenges for black panelbeaters, especially those in townships," he said.
Numsa claims that more than 1000 black panelbeaters closed down by the end of last year because of a lack of support from the insurance industry, which supplies the lion's share of auto-body repair jobs.
"There are very few accredited black panelbeaters," said Gari Dombo, Alexander Forbes managing director of personal services.
"Clients want reputable panel- beaters so the warranties on their vehicles are protected."
Hlangani said black panelbeaters operated as "backyard workshops".
Alexander Forbes senior manager of claims, audit and procurement David Reid-Ross said that not enough projects to upgrade small black businesses were being implemented.
"Black panelbeaters don't have enough money for equipment, so they can't get the jobs. It's a vicious circle and something has to be done to expose this huge untapped market," he said.
Hlangani said if insurance companies, manufactures and panel- beaters came together to improve skills and access to equipment, the industry would grow.