SIYABULELA MAKUNGA | Advocating for an inclusive automotive aftermarket sector

 The vision to integrate an emerging automotive aftermarket sector is attainable.

However, among other things it needs a dynamic economic landscape and a society united behind this vision.

The focus should be on promoting competition and broader participation by small and medium enterprises (SMEs), as well as historically disadvantaged individuals (HDIs), within the automotive aftermarket.

This involves removing barriers to entry, fostering access to resources like technical information and training, and ensuring fair access to original equipment manufacturers (OEM) parts and services.

In pursuit of this vision, the Competition Commission has been working with the automotive sector for nearly a decade to address and resolve competition-related issues, promote inclusion and encourage competition through greater participation of small businesses as well as historically disadvantaged groups.

The commission initially facilitated an advocacy programme towards an industry voluntary code of conduct that would address competition concerns such as:

— Exclusionary agreements and/ or arrangements between original equipment manufacturers (OEMs) and approved motor body repairers.

— The exclusion or foreclosure of independent service providers (ISPs) active in the service and maintenance markets, including mechanical repairs for in-warranty motor vehicles.

— The unfair allocation of work by insurers and restrictions on the sale of original spare parts to ISPs.

— High barriers to entry that exclude small and medium enterprises (SMEs) and historically disadvantaged individuals (HDIs) from becoming approved motor body repairers and approved dealers.

— The lack of competition and consumer choice in the sale and fitment of spare parts.

Through continued engagements and consultation with stakeholders in the automotive sector that ranged from workshops with associations and SMEs to auto shop visits across the country, our advocacy team subsequently developed guidelines that provide a more practical road map for the automotive aftermarkets industry to pave the way for a competitive, growing and inclusive sector.

The principles outlined in “Guidelines for Competition in the SA Automotive Aftermarket”, released late last year, seek to achieve the following:

— Lowering barriers to entry by expanding the number of approved dealers and motor body repairers per geographic area and ensuring that a greater number of firms, especially firms owned and operated by HDIs and SMEs, have an opportunity to undertake service, maintenance and repair work of motor vehicles within the period covered by a motor vehicle’s warranty.

— Increasing transparency and facilitating consumer choice on the service, maintenance and repairs of motor vehicles.

— Facilitating an increase in consumer choice through more competition in the markets for spare parts and value-added products.

So, how exactly does the commission believe the guidelines will achieve these objectives?

As a tool, the guidelines encourage stakeholders throughout the automotive sector value chain to adopt measures that will widen the pool of approved dealers and motor body repairers.

Their aim is to also promote the entry and greater spread of ownership of HDIs as approved dealers and ensure that ISPs can undertake in-warranty service, maintenance and repair work. They also allow for greater consumer choice and product competition in the retail of service and maintenance plans, and to ensure the fair allocation of work by insurers to service providers on insurance panels.

These guidelines, compiled by our team of analysts — Daniela Bove, Sewela Moshoma and Mnqobi Sikhosana — are not only making a difference locally but also receiving international recognition.

Just last month, these guidelines received a 2025 Antitrust Writing Award in the Best Soft Laws & Studies category for Africa & the Middle East. This recognition is testament to the hard work and dedication of the commission in promoting competition regulation within the SA automotive aftermarket industry and beyond.

Makunga is spokesperson for the Competition Commission of SA