MOTORING NEWS - Horror stories abound about the automotive repair and service sector, an industry notorious for high manufacturer dealership service and repair fees and for independent service providers screwing up - literally.

As this article is no hatchet job, the aim is to peruse what the new Right to Repair (R2R) guideline means for the automotive industry - manufacturers, dealerships, individual auto-mechanics and the most important role players, vehicle owners. It must be noted that the regulation is a guideline and not an act.

The long-awaited R2R regulations coming in force next Thursday 1 July, will give vehicle owners the opportunity to shun dealership service and maintenance plans in favour of independent service providers (ISPs) without losing their vehicles' warranties.

Great news, right? Absolutely! But beware, when something seems too good to be true, it generally is. If you know a trustworthy independent mechanic, happy days. If your vehicle is, however, covered by the manufacturer's service or maintenance plan, you will end up paying out of your own pocket for the job, despite having already paid for the manufacturer's plan. 

There are other risks too. If, for example, the mechanic makes a mistake or uses sub-standard components leading to engine damage, the manufacturer has the right - rightly so - to refuse the resultant claim, even if the vehicle is under warranty.

Under the R2R guideline, manufacturers are obliged, of course at a fee, to share all vehicle information with ISPs, except security risk-based information. So, if a street-wise operator attempted to hotwire or immobilise your newly acquired German take-away, off to the franchise dealership you go. 

For extremely valid security reasons, manufacturers will not share crime preventing technical and electronic information with third parties as, especially in Mzanzi, this information will be in the thieving hands of an 'autopreneur' faster than you can say jack.

Another challenge for ISPs is that many high-tech new vehicle components are not available in the alternative after market due to contractual arrangements between original equipment suppliers and vehicle manufacturers.

Indies will have to buy these from the franchise dealership, while on top of this, just like franchise dealerships, paying monthly and/or once-off fees to the manufacturer for brand repair literature and service training. Regular training and information costs will make it more challenging for ISPs to provide cheaper repairs and services. Unlike franchise dealerships, ISPs also do not have access to guided fault-finding from the manufacturer and will at times be hitting in the dark.

Group General Manager of Volkswagen & Ford Mossel Bay and Knysna Volkswagen, Riaan Stander, who was on the R2R steering committee, says in South Africa the automotive industry is subject to the new R2R regulations and the OEMs and dealer network need to comply. Anti-competitive activities by the industry will be addressed through the Competition Commissioner's office. Manufacturers utilise state-of-the art Business-to-Business encryption technologies to protect their intellectual property in terms of repair information and software to prevent syndicates or unscrupulous operators from gaining access to diagnostic and other proprietary information. 

Service providers who purchase the information are provided with the relevant security technology to utilise the information without ease of duplication. Every user signs and accepts a licence agreement prior to use which allows manufacturers to institute criminal charges against misuse of the information.

Advantages and risks
Stander welcomes the new legislation in spite of its many pitfalls. "Competition is always welcome. R2R unlocks the perceived monopoly that franchise dealerships have had all these years. At least two-thirds of the vehicle population are out-of-warranty vehicles and ISPs always had access to the vehicles without restrictions from OEMs. 

Not all rural areas have a dealership nearby, so, if you have a reliable, capable ISP, the client scores in terms of travel costs and convenience. It also encourages competition from a pricing perspective, especially on parts offerings."

Stander says R2R offers the client distinct advantages, but also has some risks. Some individual ISPs may not adhere to all the R2R regulations. Not everyone is ethical, and many will be out to make a quick buck to the detriment of customers. Who is going to protect the client against unscrupulous ISPs? The Motor Industry Ombud is the appointed entity for complaints. It may, however, be time- consuming to obtain resolution as it currently takes a considerable time to finalise complaints escalated to the Ombud. The customer is disadvantaged during this period as no action is taken until a resolution is decided on.

On the other hand, in order to retain clients, franchise dealerships will pay close attention to the R2R guidelines, Stander says. "We must ask ourselves what we can do to ensure better customer loyalty. An example is "Save the Car". Insurance companies often write off vehicles due to high repair costs. Dealerships will have to make plans to save the vehicle. Once the car is outside its warranty cover, we will offer customers alternatives to minimise repair costs and compete in the open market."

Stander says it's good that clients now have a choice. "To manage your down-side risks, please just ask the right questions before you leave your vehicle with an independent service provider."

He advises clients to get the following information from ISPs:

1. What are my risks in terms of my current warranty, service plan or maintenance plan if I service my car with you, instead of at the brand franchise dealership?
2. Should consequential damage result due to work performed by you, will it negatively impact my warranty and who will be responsible for the repair costs?
3. Who carries the warranty for the work performed by you and for how long? Does this include consequential damage of work performed?
4. Do you have access to the manufacturer's technical information regarding vehicle repairs, service instructions, fault finding, diagnostic and software applications as well as the right equipment?
5. Do you use original or alternative parts? If you use alternative parts, how will this affect my warranty re future problems and damage that may arise in respect of such?
6. Do you make use of the manufacturer's prescribed engine and gearbox oils? (most modern vehicles must use specific oils that are very expensive.)
7. Do you currently have liability insurance to cover any consequential damage to my vehicle?
8. What are your terms of guarantee with regard to time and distance? Does this include consequential damage?

Stander also has advice for ISPs:

1. Adhere to the R2R regulations.
2. Put the client first at all times.
3. Inform the client of all risks.
4. Is the work performed in line with the manufacturer's specs?
5. Ensure you have access to the vehicle manufacturer information.
6. Participate in manufacturer training.
7. Have the necessary insurance in place should something go wrong.
8. Concentrate on one brand of vehicle and build a relationship with the manufacturer franchise dealership.

Stander says R2R has successfully been in effect in the European Union since October 2003. "The big difference is that in terms of the R2R model in the EU, ISPs must adhere to strict and detailed manufacturer quality standards, which are regularly checked and audited. This still limits intra-brand competition in these markets. Vehicles also have limited life cycles as they are scrapped after specific prescribed years in service. A recent evaluation of the EU markets show that franchise dealerships still enjoy considerable local market support from their customers despite the regulation being in force for many years."

He finds the future of the after-sales market intriguing. "I wonder how many independent workshops in SA will really rise to the challenge and effectively engage to deliver on the expected quality standards, utilising the prescribed repair methodologies and training of their personnel at manufacturer facilities. 

"The bigger independent groups, Bosch Car Service, etc. may well opt for it, but the lone operator will be extremely cautious to venture into specialised repairs while a vehicle is under a manufacturer warranty."

READ: Competition Guidelines for Automotive Industry

Word from right2repair.org.za

Grant Palliser of Bosch Car Service, says R2R is a fantastic opportunity to leverage opportunities for independent aftermarket workshops. "Bosch Car Service, one of the world's largest independent workshop networks, and which uses some of the latest technologies, is ideally situated to offer repair solutions to vehicles that are still under original equipment warranty.

Michael da Paixao of Autozone says R2R is driving a whole new focus of consumer choice, opening up competition in the automotive aftermarket. This organisation has now successfully given the end consumer freedom of choice as to where to take their vehicles for service and repairs. With the passion in the aftermarket we see endless opportunities for consumers, SMEs, entrepreneurs and all who love and own vehicles.

Sisa Mbangxa of African Panelbeaters Motor Mechanics Association wants to see previously and presently disadvantaged artisans in the automotive repair section play a pivotal role in the mainstream automotive economy in a fair and free environment.

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