GUIDELINES FOR COMPETITION IN THE SOUTH AFRICAN - AUTOMOTIVES AFTERMARKETS DECEMBER 2020
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competition commission
south africa
GUIDELINES FOR COMPETITION
IN THE SOUTH AFRICAN
AUTOMOTIVES
AFTERMARKETS
DECEMBER 2020
a growing, deconcentrated and inclusive economy
www.compcom.co.za
TABLE OF
CONTENTS
1. PREFACE 03
2. DEFINITIONS 03
3. INTRODUCTION 06
4. OBJECTIVES AND LEGISLATIVE FRAMEWORK 12
5. IN-WARRANTY SERVICE, MAINTENANCE AND REPAIRS BY ISPS 13
6. APPOINTMENT OF MOTOR-BODY REPAIRERS BY OEMS 14
7. APPOINTMENT OF SERVICE PROVIDERS AND ALLOCATION OF WORK 16
BY INSURERS
8. APPOINTMENT OF DEALERS BY OEMS 17
9. PREVENTING ANTI-COMPETITIVE INFORMATION SHARING BY MULTI- 19
BRAND DEALERSHIPS
10. FITMENT AND ACCESS TO SPARE PARTS 20
11. THE BUNDLED SALE OF MOTOR VEHICLES WITH VALUE ADDED 23
PRODUCTS
12. ACCESS TO TECHNICAL INFORMATION AND OEM-TRAINING FOR ISPS 25
13. IMPLEMENTATION 26
14. MONITORING OF ADHERENCE TO THE GUIDELINES 27
15. DISPUTE RESOLUTION 27
16. REVIEW OF THE GUIDELINE 27
17. CONCLUSION 28
22 Guidelines for Competition in the Automotive Aftermarket1. PREFACE
1.1. These Guidelines have been prepared in to ISPs; high barriers to entry that exclude
terms of section 79(1) of the Competition small and medium enterprises (SMEs)
Act No. 89 of 1998, as amended (“Act”) which and historically disadvantaged individuals
provides that the Competition Commission (HDIs) from becoming Approved Motor-
(“Commission”) may prepare Guidelines to body Repairers and Approved Dealers; and
indicate its approach on any matter falling a lack of competition and consumer choice
within its jurisdiction in terms of the Act. in the sale and fitment of Spare Parts.
These Guidelines are not binding on the
Commission, the Competition Tribunal, 1.3. The Commission has been working with
or the Competition Appeal Court in the the industry since early 2017 to resolve
exercise of their respective discretion, or these market issues. The Commission
their interpretation of the Act. initially facilitated an advocacy program
towards an industry voluntary Code of
1.2. Over the past decade, the Commission has Conduct. After two years of engagements
received complaints regarding allegations and consultation, the stakeholders failed
of anti-competitive conduct in the to reach consensus and/or to commit to
aftermarket value chain. The allegations meaningful pro-competitive reforms in
include exclusionary agreements and/ response to the challenges posed.
or arrangements between OEMs and
Approved Motor-body Repairers; the 1.4. These Guidelines therefore provide
exclusion or foreclosure of Independent practical guidance for the automotive
Service Providers in the markets for the aftermarkets industry, intended to
service and maintenance and Mechanical promote inclusion and to encourage
Repairs for In-Warranty Motor Vehicles; competition through greater participation
unfair allocation of work by Insurers; of small businesses as well as historically
restrictions on the sale of Original Spare Parts disadvantaged groups.
2. DEFINITIONS
2.1. “Act” means the Competition Act no. 89 2.3. “Automotive Aftermarket” means for
of 1998, as amended. these Guidelines, the after-sale market
which includes maintenance and repair
2.2. “Agreement” means any consensus, services and related value added
contract, arrangement, understanding products, Mechanical Repairs, Structural
between two or more parties that purports Repairs and Non-Structural Repairs to
to establish a relationship between them, Motor Vehicles, the sale of motor vehicle
whether or not legally enforceable, that Spare Parts, tools and components and
the parties consider binding upon them.
Competition Commission South Africa • www.compcom.co.za 33the sale and administration of Motor into operation, were disadvantaged by
Vehicle Insurance. unfair discrimination on the basis of race;
2.4. “Commercially Sensitive Information” 2.10.1. an association, a majority of whose
means trade, business, industrial members are individuals referred
information and data stored electronically to in paragraph 2.10.
or in the cloud that has economic value to
a firm and its business strategy and that 2.10.2. a legal person, other than an
is generally not available to or known by association, and individuals
others. referred to in paragraph 2.10.1
own and control a majority of its
2.5. “Commission” means the Competition issued share capital or members’
Commission of South Africa. interest and are able to control a
majority of its votes: or
2.6. “Consequential Damage” means injury
or harm that does not ensue directly and 2.10.3. a legal person or association, and
immediately from the act of a party, but persons referred to in the above
only as a result of a consequence or from paragraphs that own and control a
some of the results of such act, and that majority of its issued share capital
may be compensated by a monetary or members’ interest and are able
award. to control a majority of its votes.
2.7. “Dealer” means a business enterprise 2.11. “Independent Service Providers” or
whose business is in the retail of new “ISP” means all Dealers and Motor-body
and/or used motor vehicles, the sale and Repairers, who are not appointed as an
resale of Spare Parts and the service, Approved Dealer or Approved Motor-
maintenance, and Mechanical Repairs of body Repairer as defined herein.
motor vehicles but excludes Motor-body
Repairers, as defined herein. For purposes 2.12. “Information Barriers” means measures
of these Guidelines, an Approved Dealer within an organization that are created
means a Dealer that is appointed by an to prevent exchanges of Commercially
OEM. Sensitive Information or communication
that could lead to conflicts of interest
2.8. “Designated Geographic Area” means and/or constitute a prohibited practice in
a local (municipal), district, regional or terms of the Act.
provincial area.
2.13. “Insurer” means a legal person licensed
2.9. “Extended Warranty” is an optional and as an insurer in terms of the Insurance
additional Warranty that a consumer can Act, No. 18 of 2017, that provides and
purchase to extend the application of a sells motor insurance cover for loss or
Warranty. damage to a Motor Vehicle, and any
person acting on their behalf including
2.10. “Historically Disadvantaged Indi- brokers, intermediaries, underwriters and
vidual” or “HDI” means one of a assessors.
category of individuals who, before the
Constitution of the Republic of South 2.14. “Liability” means responsibility for the
Africa, 1993 (Act No. 200 of 1993), came consequences of one’s acts or omissions,
44 Guidelines for Competition in the Automotive Aftermarketenforceable by a civil (damages) or and includes an importer of Motor
criminal remedy. Vehicles.
2.15. “Maintenance Plan” refers to a non- 2.21. “Safety Systems” refers to parts,
insurance product, covering the regular components or systems, the failure of
maintenance and repairs of a Motor which may directly or indirectly endanger
Vehicle on components and parts that the life or limb of passengers in the
include wear and tear. A Maintenance vehicle.
Plan is used at specified pre-determined
times or stipulated mileage. 2.22. “Security Systems” refers to anti-theft
devices which prevent the operation
2.16. “Mechanical Repair” means the of a Motor Vehicle without the fob (an
restoration or replacement of the electronic device used typically in place
working parts of a Motor Vehicle, such of a key) programmed for that Motor
as the engine and operational software, Vehicle including the transponder chip,
including diagnosing and detecting faults sensors and other devices that disable
in Motor Vehicles, and the replacement or protect the Motor Vehicle. Security
and programming of a Motor Vehicle’s Systems include but are not limited to the
electric and electronic components. coding of keys, engine control unit, body
control unit, audio or infotainment unit,
2.17. “Motor Vehicle” means any vehicle instrument cluster, injector pump, which
designed or adapted for propulsion or share a rolling code program to prevent
haulage on a road by means of fuel, gas theft or start-up and driving of the Motor
or electricity or any other means. Vehicle.
2.18. “Motor-body Repairer” means a 2.23. “Service Plan” refers to a non-insurance
business enterprise that performs product covering the service of a Motor
Structural Repairs and Non-Structural Vehicle and components and parts of a
Repairs to Motor Vehicles but excludes Motor Vehicle that may need replacing
Dealers, as defined herein. For purposes when it is due for a service, exclusive of
of these Guidelines, an Approved Motor- normal wear and tear. A Service Plan is
body Repairer means a Motor-body used at specified pre-determined times
Repairer that is appointed by an OEM or a stipulated mileage.
(OEM Approved Motor-body Repairs) or
an Insurer (Insurer Approved Motor-body 2.24. “Small and Medium Enterprise” or
Repairs). “SME” means a small business as defined
in the National Small Enterprise Act No.
2.19. “Non-Structural Repair” means work 102 of 1996.
undertaken to restore the damaged
interior and exterior parts of a Motor 2.25. “Spare Parts” means replacement
Vehicle, that do not have an intrinsic products for worn, defective or damaged
bearing on the mechanical functioning components or parts of a Motor Vehicle.
of the Motor Vehicle, including plastic,
aluminium, and steel parts. 2.25.1. “Original Spare Parts”, for
purposes of these Guidelines,
2.20. “OEM” means an original equipment are replacement Spare Parts
manufacturer as well as any legal person produced by, on behalf of or
over which it has direct or indirect control under the instructions/order of
Competition Commission South Africa • www.compcom.co.za 55an OEM and in accordance with Vehicle repairs, such as Maintenance
specifications and production Plans, Service Plans, Extended Warranty
standards provided by the OEM, and scratch and dent cover.
as well as those Spare Parts
distributed by the OEM or any 2.28. “Vehicle Service Book” refers to a
other authorised distributors physical book or the electronic equivalent
of the OEM or marked with the including data stored electronically or in
trademark of the OEM. the cloud which is used to keep a record
of any work performed on the Motor
2.25.2. “Non-Original Spare Parts”, for Vehicle, when it was done, and by whom.
purposes of these Guidelines, are
Spare Parts that carry a Warranty 2.29. “Warranty” is an obligation by the
from its manufacturer and are OEM to replace or repair certain
legitimate and traceable for sale components or parts of a Motor Vehicle
in the aftermarket, but that are that need replacement or repair due to a
not Original Spare Parts. Non- manufacturing or factory defect:
Original Spare Parts exclude
2.29.1. “In-Warranty” means the period in
counterfeit Spare Parts.
which an OEM has an obligation to repair
2.26. “Structural Repair” means the work or replace any component or part of the
undertaken to mend, restore, refinish, Motor Vehicle which proves defective in
and replace, inter alia, the bodywork, materials or workmanship.
frames, painting and treating the surface
2.29.2. “Out-of-Warranty” means the period in
and fixing the glass (if undertaken as
which a Warranty (or Extended Warranty)
part of the foregoing activities) of Motor
has expired and in which the OEM has no
Vehicles.
obligation to repair or replace defective
2.27. “Value-added Products” means add-on components or parts.
cover for maintenance, service, and Motor
3. INTRODUCTION
The Automotive Value Chain
3.1. Generally, the automotive sector is divided 3.2. The automotive value chain is depicted in
into two related markets, the market for Figure 1 below:
the manufacturing of new Motor Vehicles
(usually referred to as “the primary market”)
and the after-sales or aftermarket (referred
to as “the secondary market”).
66 Guidelines for Competition in the Automotive AftermarketFigure 1: The Automotive Value Chain
Raw material suppliers: goods supplied: Steel and PU (Polyurethane), aluminium,
leather, platinum group metals, plastics, brass and chemicals. Suppliers:
ArcelorMittal, Huletts Aluminium, Anglo American platinum.
Tier 3 Suppliers: Low value Components. Close to raw material suppliers. Mostly
South African owned companies that sell sub-components and parts to Tiers 1 and
Components
Manufacturing
Tier 2 supplies to make their specialised products, systems and components.
Tier 2 Suppliers: Manufacture of sub-components for number of basic automotive
components. Well integrated in the supply chain of major Tier 1 suppliers. Example
of goods produced in this level are; Seals, hoses, flanges, fasteners, nuts, clamps,
valves, computer chips etc. suppliers; Precision press (Pty)ltd (metal pressing, sub-
assemblies), C&J services (engine components, washers, nuts etc.)
Tier 1 Suppliers: Make major components for the OEM’s. - Highly integrated into
the supply chain of major OEMs. Usually dedicated supply to a major OEM. Supply
components or systems directly to the OEMs and has global recognizable brands.
Examples of goods supplied are Catalytic converters, braking systems, engines
exhausts systems. Examples of Tier 1 suppliers are Festo, Johnson Matthey,
Mothersons, Yazaki, Simito, Robert Bosch and Behr.
OEMs assemble the various components of a motor vehicle to produce a complete
Automobile unit. For the purposes of assembly, the components may also be
imported from other countries. Examples of OEMs who undertake assembly work
in SA include Mercedes-Benz, BMW, Ford, Toyota and Volkswagen.
Assembly &
Distribution
The automotive aftermarket is the automotive industry’s after-sale market. It
includes the retail of vehicles and the sale of vehicle spare parts and equipment
(e.g. replacement tyres, accessories). The aftermarket also includes the service,
maintenance and repairs of motor vehicles.
Aftermarkets
Source: Commission’s own compilation from publicly available data
Competition Commission South Africa • www.compcom.co.za 77Manufacturing The Approved Dealers form part of listed
retail groups which have several divisions,
3.3. The manufacturing process includes the including automotive, fleet management,
following elements: foundry operations, warehousing, transportation, financial
which, whether integrated with Motor services, and car rental.
Vehicle assembly facilities or independent
shops, cast metal products for the 3.6. Dealerships are dedicated points of sale for
production of Motor Vehicles and Motor each OEM; they represent the OEM to the
Vehicle equipment metal shaping and customer and act as their agents. Examples
machining, where vehicle parts, including of Dealerships in South Africa include CMH
bumper bars, hubcaps and body parts are Group, Lazarus Group, BB group Lindsay
manufactured in metal galvanizing and Saker and McCarthy Group.
electroplating shops which also provide
metal coating to inhibit oxidation, prevent Aftermarket: Financing and Insurance
corrosion and extend the life of the product
Motor Vehicle assembly and Motor Vehicle 3.7. Financial institutions (banks) typically
painting and finishing.1 provide consumers with finance for the
purchase of Motor Vehicles. As a value-
Aftermarket: Motor Vehicle Retail, Service, added service, Dealerships can sometimes
Maintenance and Repairs act as intermediaries for accessing finance,
when requested by a consumer. At the
3.4. The key players in the aftermarket include point of sale, new motor vehicles are
Repairers (e.g. mechanical, motor-body, covered by a warranty of the OEM, which
structural, non-structural), Dealers and can be applicable to the entire vehicle
spare- parts suppliers. These parties may and to particular parts and components
either be appointed by an OEM to provide of the vehicle; OEMs also offer (or sell)
services to their customers or operate value-added products, such as service and
independently of such arrangements. maintenance plans, to consumers. There
are also 3rd party providers of service
3.5. The retail market comprises OEMs, Dealers, and maintenance plans and extended
importers and distributors. Dealers are warranties for vehicles out of the warranty
often contracted or owned by OEMs and period. Finally, Insurance companies cover
act as agents of the OEMs to sell their Motor the costs of repairs to a Motor Vehicle and
Vehicles and provide services to customers. loss of a Motor Vehicle.
Overview of the South African Industry
3.8. In South Africa, the automotive industry manufacturing output. It is the country’s
contributes 6.4% to the country’s fifth-largest exporting sector out of all 104
gross domestic product (GDP) (4.0% sectors and accounts for 13.9% of total
manufacturing and 2.4% retail) and exports.2
accounts for 30.1% of the country’s
1 Who owns Whom: The Motor Vehicle Industry, October 2018.
2 NAAMSA submission to the Competition Commission on the Draft Guidelines for Competition in the South
African Automotive Aftermarket Industry dated 30 June 2020.
88 Guidelines for Competition in the Automotive Aftermarket3.9. The manufacturing segment of the industry with three OEMs (BMW, Ford and Nissan),
currently employs more than 110,000 and approximately 40% of the South
people across its various tiers of activity African automotive components industry.5
(from component manufacturing to vehicle
assembly).3 3.14. Table 1 outlines the number of brands and
model derivatives in respect of new Motor
3.10. The South African automotive industry Vehicles, available to consumers in South
consists of twenty-two (22) companies Africa.
involved in the production of Motor
Vehicles (OEMs). In addition, there are Table 1: The number of brands and model
twenty-one (21) companies that import derivatives of new Motor Vehicles in South Africa
and distribute new Motor Vehicles in (2017)
the country. There are approximately five
hundred (500) automotive component Model
Segment Brands
suppliers, including 180 first-tier suppliers.4 derivatives
New cars 55 3458
3.11. The South African industry value chain Light commercials 26 739
is primarily driven by seven (7) OEMs: Medium commercials 17 185
BMW; Ford; Isuzu; Mercedes Benz; Nissan; Heavy commercials 12 132
Toyota; and Volkswagen. Extra-heavy commercials 11 540
Buses 9 55
3.12. These companies make a huge impact on
Source: NAAMSA6
the economies of Gauteng, the Eastern
Cape and KwaZulu-Natal. Along with their
suppliers, these OEMs are at the centre 3.15. There were an estimated 2078 dealerships
of the three regional clusters and their in South Africa at the beginning of 2017.7
socio- economic contribution is vital in
contributing to the social upliftment of the 3.16. The largest portion of the aftermarket is the
communities they serve. vehicle servicing, repairs and parts supply
channels, which form approximately 80%
3.13. The OEMs are clustered into four primary of the entire automotive aftermarket
geographic areas, each home to one industry, both in employment and rand
or more OEMs. For instance, Gauteng value contributions to the economy.8
(Rosslyn, Silverton and Ekurhuleni), has Motor-body repair encompasses spend in
the second-largest concentration of the region of R10 Billion per annum.9
automotive manufacturing in South Africa,
3 https://naamsa.net/employment-and-skills/
4 NAAMSA, SA Automotive industry structure. Available at: https://www.naamsa.co.za/papers/Manufacturer_
and_Importers_Location.pdf
5 NAAMSA Website at https://naamsa.net/industry-overview/ .
6 NAAMSA submission to the Competition Commission on the Draft Guidelines for Competition in the South
African Automotive Aftermarket Industry dated 2 November 2017, page 2.
7 NAAMSA submission to the Competition Commission on the Draft Guidelines for Competition in the South
African Automotive Aftermarket Industry dated 2 November 2017, page 3.
8 Tyre, Equipment, Parts Association (TEPA) submission to the Competition Commission on the Draft Guidelines
for Competition in the South African Automotive Aftermarket Industry dated 13 March 2020, page 1.
9 Collision Repairers Association (CRA) submission to the Competition Commission on the Draft Guidelines for
Competition in the South African Automotive Aftermarket Industry dated 2 November 2017, page 1
Competition Commission South Africa • www.compcom.co.za 993.17. Motor insurance is said to account departments in the three spheres of
for approximately 45% of the non-life government (national, provincial and
insurance business in the country.10 local).
3.18. Further to this, it is important to note that 3.19. An important stakeholder in the sector is
there are various industry bodies and the consumer, who purchases the Motor
associations which represent the interests Vehicle for use and makes use of the service
of the various players in the sector, at all offered in the aftermarket. It is estimated
levels of the value chain. It is also notable that approximately a third of households
that there are various regulators that are in the country own a Motor Vehicle.
relevant in the different aspects of the
automotive sector as well as government
Policy Developments in the Sector
3.20. The South African automotive industry a) Grow domestic vehicle production
has been guided by policy objectives as to 1% of global output (projected to
articulated initially in the Motor Industry reach 140 million units annually by
Development Programme (MIDP) which 2035).
was subsequently replaced by the b) Increase local content in South African
Automotive Production and Development assembled vehicles to 60% (from 39%
Programme (APDP) in 2013. Now, the in 2015).
South African Automotive Masterplan c) Double total employment in the
(“Masterplan”), which is expected to come automotive value chain (from 112,000
into effect in January 2021 and run until to 224,000).
2035 provides the policy objectives for the d) Improve automotive industry
next coming period. The Masterplan aims competitiveness levels to that of
to create a framework to secure greater leading international competitors.
levels of investments and production. e) Achieve industry transformation
across the value chain.
3.21. The vision of the Masterplan is stated as f) Deepen value addition across selected
‘A globally competitive and transformed commodities or technologies.11
industry that actively contributes to
the sustainable development of South 3.22. The objectives articulated in the Masterplan
Africa’s productive economy, creating align with the objectives of this Guideline,
prosperity for industry stakeholders and particularly to transformation (inclusion)
broader society’. To achieve the vision of and growth in the sector. Stakeholders are
the Masterplan, the Department of Trade encouraged to read these Guidelines with
Industry and Competition (DTIC) set the view of the broader policy objectives
development objectives that will need to of the country.
be met. These include objectives to:
10 South African Insurance Association. Annual Review 2020
11 Minister Rob Davies: South African Automotive master plan and Extended Automotive Production and
Development Programme. Available at: https://www.gov.za/speeches/minister-rob-davies-media- state-
ment-south-african-automotive-masterplan-2035-and-extension. Accessed on [08/02/2019].
10
10
Guidelines for Competition in the Automotive AftermarketCompetition Issues in the Sector
3.23. The Commission notes that similar c) Authorized repairers are free to
constraints to competition in the procure original parts or parts of
Automotive Aftermarket Industry have matching quality from authorised
been identified in other jurisdictions. parts suppliers or independent parts
suppliers.
3.24. In developing these Guidelines, the d) Independent repairers should have
Commission conducted a review and access to the vehicle manufacturers’
comparison of the work being undertaken original parts to allow independent
by competition authorities in other repairers to properly maintain and
jurisdictions, including by the National repair vehicles and to compete with
Development and Reform Commission the authorized repairers.
of China, Federal Anti-monopoly Service e) Vehicle owners have the right to use
of Russia, the European Commission, the any repair shop for non-warranty
Federal Trade Commission in the United work, during the warranty period.
States and the Australian Competition f) Vehicle manufacturers may not make
and Consumer Commission. In these the warranties conditional on the
jurisdictions, such complaints have been repair and servicing of a motor vehicle
approached in several ways, including within their network or the use of their
enforcement and interventions which have own branded spare parts.
led to the promulgation of regulations or g) Vehicle manufacturers are required
voluntary codes of conduct or Guidelines. to make available to authorized and
These initiatives have emphasised independent repairers’ technical
the importance of ensuring effective information and training required to
competition and facilitating transparency service/repair motor vehicles.
and consumer choice.
3.26. The principles outlined in these
3.25. To address these concerns the various Guidelines are based on the Commission’s
Competition Authorities adopted various experience through its advocacy and
regulations which include, among others, investigative work relating to various anti-
the following: competitive concerns identified in the
Automotive Aftermarket Industry, broader
a) The authorized repairers/service policy objectives of the country as well
providers are obliged by regulation as guidance from other jurisdictions
to not only use original parts from concerning competition between OEMs,
approved manufacturers but to also Insurers, Approved Dealers, Approved
use matching quality parts procured Motor-body Repairers and ISPs.
from any other supplier.
b) Vehicle manufacturers may not hinder
their original parts or component
suppliers from also supplying their
products as spare parts to independent
distributors or authorized distributors.
Competition Commission South Africa • www.compcom.co.za 11
114. OBJECTIVES AND LEGISLATIVE
FRAMEWORK
4.1. These Guidelines pertain to all Motor 4.4. These Guidelines seek to achieve these
Vehicles within the Republic of South Africa. objectives by encouraging stakeholders to
adopt measures that:
4.2. In line with the spirit, intent and purpose
of the Competition Act, these Guidelines 4.4.1. Widen the pool of Approved
are directed at promoting competition in Dealers and Approved Motor- body
the Automotive Aftermarket, specifically to Repairers;
promote economic access, inclusion and
greater spread of ownership for Historically 4.4.2. Promote the entry (ownership) of
Disadvantaged Individuals (HDIs). HDIs as Approved Dealers;
4.3. The objectives of the Guidelines are to: 4.4.3. Ensure that ISP’s can undertake In-
Warranty service, maintenance and
4.3.1. Lower barriers to entry and repair work;
ensure that a greater number
of firms, especially firms owned 4.4.4. Allow for greater consumer
and operated by HDIs and SMEs choice and product competition
have an opportunity to undertake in the retail of Service Plans and
service, maintenance and repair Maintenance Plans; and
work of Motor Vehicles within the
period covered by a Motor Vehicle’s 4.4.5. Ensure the fair allocation of work
Warranty; by Insurers to service providers on
insurance panels.
4.3.2. Increase transparency and facilitate
consumer choice on the service,
maintenance and repairs of Motor
Vehicles;
4.3.3. Increase consumer choice and
facilitate competition in the markets
for Spare parts and Value-Added
Products.
12
12
Guidelines for Competition in the Automotive Aftermarket5. IN-WARRANTY SERVICE, MAINTENANCE
AND REPAIRS BY ISPs
5.1. The Guidelines in this section introduce 5.4.2. In instances where a consumer
measures for the service, maintenance chooses to use an ISP during the In-
and repairs of Motor Vehicles during the Warranty period, there shall be no
In-Warranty period. obligation on the OEM to pay for
any service and maintenance work
5.2. Independent Service Providers in South undertaken by the ISP.
Africa have been over the years excluded
from undertaking the service, maintenance 5.4.3. The Motor-body repairs of
and mechanical repairs on Motor Vehicles consumers who have insurance
that are In-Warranty. One of the reasons cover shall be undertaken by an
for this is that when a Motor Vehicle which Approved Motor-body Repairer
is In-Warranty is serviced, maintained during the In-Warranty period,
or repaired by a party other than an as allocated by an Insurer to the
Approved Dealer, there is the potential consumer.
risk that certain provisions of the Warranty
on the Motor Vehicle may become invalid 5.4.4. Consumers who do not have
or void. insurance cover may repair their
Motor Vehicles at a service provider
5.3. The Commission has found that there are of their choice at any point during
information asymmetries and knowledge the Motor Vehicle’s lifespan.
gaps concerning the rights of consumers
and the legal framework regarding 5.4.5. To ensure that all the work done on
warranties. a Motor Vehicle is traceable ISPs are
obliged to record such In-Warranty
5.4. The following principles will be applicable work undertaken by them in their
concerning the service, maintenance customers’ Vehicle Service Books
and repairs of Motor Vehicles during the or equivalent record-keeper.
warranty period:
5.4.6. Accordingly, ISPs shall disclose to
5.4.1. OEMs shall recognise and not consumers, in clear and explicit
obstruct a consumer’s choice to terms, the risk of damage that
seek service, maintenance and could arise from the ISP’s work,
mechanical repair work for their including Consequential Damage
Motor Vehicles at a service provider to the Motor Vehicle, which may
of their choice, regardless of potentially void certain obligations
whether that service provider is an of the OEM in terms of the Warranty.
Approved Dealer or an ISP.
5.4.7. ISPs must disclose to consumers,
whether they have adequate
Competition Commission South Africa • www.compcom.co.za 13
13commercial insurance cover to own cost, to ascertain such damage
perform the work that they will be and liability.
undertaking on the Motor Vehicle.
5.4.9. If there is a dispute, a consumer can
5.4.8. If any damage is caused to a Motor approach the relevant authority to
Vehicle from work done by an ISP, investigate the matter. A consumer
there is a risk that certain provisions who suffers harm from a defective
of the OEM Warranty will be voided. product can bring a claim against
However, other provisions of the any party in the supply chain in
Warranty may remain severable and terms of section 61 of the Consumer
enforceable. The OEM concerned Protection Act No. 68 of 2008.
may conduct an assessment, at its
6. APPOINTMENT OF MOTOR-BODY
REPAIRERS BY OEMs
6.1. OEMs typically appoint a select number Repairers is only applicable during the In-
of Motor-body Repairers to undertake Warranty period of the Motor Vehicle.12
repair work on their brand’s Motor
Vehicles during the In-Warranty period 6.3. In practice, there are instances where
(i.e. Approved Motor-body Repairers). a Motor-body Repairer can attain the
Approved Motor-body Repairers are accreditation of more than one OEM to
accredited to repair Motor Vehicles of repair their Motor Vehicles. There are
that particular OEM, should they meet the also instances where Approved Motor-
standards and specifications set by the body Repairers enter into a exclusive
OEM. To attain accreditation and to meet contracts with a particular OEM, often as
the standards and specifications set by a condition of the accreditation. There are
OEMs, prospective Motor-body Repairers also many instances where the contracts
are typically required to make large between OEMs and Approved Motor-
financial, infrastructure and operational body Repairers are for an indefinite period
investments. (“evergreen”). Some of these contracts
have been in place for multiple decades.
6.2. The allocation of repair work to these
Approved Motor-body Repairers is 6.4. It is also common that OEMs can place
administered by Insurers if the Motor limits on the number of Motor-body
Vehicle is insured, upon a claim made by Repairers that it approves in a particular
their client. The allocation of repair work Designated Geographic Area. The
by Insurers to Approved Motor- body rationale advanced by OEMs for limiting
12 Insurers appoint separate panels of service providers for the repairs of vehicles out of the warranty period,
using Insurer-standards and specifications, rather than the OEM-standards and specifications for the appoint-
ment criteria.
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Guidelines for Competition in the Automotive Aftermarketthe number of repairers is typically related amongst others, expanding the
to cost/investment justification viz-a-viz number of Approved Motor-body
market saturation or insufficient volume of Repairers per geographic area.
work available in the area concerned.
6.9.2. OEMs shall approve any Motor-
6.5. The outcome of these arrangements is body Repairer applicant that meets
such that, in a large geographic area, there their standards and specifications.
may be only one Approved Motor-body
Repairer who can service the vehicle of the 6.9.3. OEMs may not enter into exclusive
OEM’s brands; further the same Repairer arrangements, either with one
may also be undertaking repair work of or more Approved Motor-body
other OEM brands if they are appointed Repairers, for effecting repairs on
by multiple OEMs. an OEM’s Motor Vehicles within a
Designated Geographic Area.
6.6. With few options available for insured
consumers, the arrangements can be 6.9.4. To promote entry and eradicate
inefficient, often leading to delays for long-term legacy arrangements
appointments to repair their Motor between OEMs and Approved
Vehicles (long lead times). Further, many Motor-body Repairers, OEMs shall
consumers are compelled to travel outside not appoint and/or authorise any
of their geographic locations to have Approved Motor-body Repairers
their Motor Vehicles repaired at often far- for a period exceeding five (5)
located Approved Motor-body Repairers. years, and must not continuously
renew the appointment of the same
6.7. Importantly, the arrangements between Approved Motor-body Repairers, if
the OEMs and Approved Motor-body such appointment or renewals are
Repairers, as described above, can lead to to the unreasonable exclusion of
foreclosure of prospective new entrants. the appointment of ISPs capable
Given South Africa’s history of economic of effecting repairs on an OEM’s
exclusion for the majority of the population, Motor Vehicle within a Designated
the long-term, exclusive contracts, serve to Geographic Area.
perpetuate exclusion.
6.8. The Commission believes that such
constraints to effective entry and
participation by ISPs must be avoided by
OEMs. The OEMs should also not engage
in conduct which is exclusionary.
6.9. The following principles are applicable:
6.9.1. OEMs must adopt measures to
promote and/or support the entry
of new Motor-body Repairers, with
a preference for firms owned by
HDIs. Such measures can include,
Competition Commission South Africa • www.compcom.co.za 15
157. APPOINTMENT OF SERVICE PROVIDERS
AND ALLOCATION OF WORK BY INSURERS
7.1. The Guidelines in this section introduce within a Designated Geographic
measures for the appointment of service Area. Insurers’ rationale for the
providers by Insurers to undertake repairs appointment of limited service
and the allocation of work thereto. providers and the allocation
patterns is that there is saturation
7.2. When a claim is made by an insured or insufficient volume of work
consumer, Insurers typically use an available in the area concerned.
electronic system to allocate repair work
to a service provider. The system takes into 7.6. Further, the Commission has found that
consideration the closest supplier to the the application and selection process for
client and whether they are approved by the appointment onto insurance panels is
the OEM/Insurer to make the repairs on deemed unfair and not transparent. There
the insured Motor Vehicle. have been allegations that this process is
particularly biased against HDI applicants.
7.3. Insurers allocate repair work to an OEM-
approved service provider if the Motor 7.7. The guidelines that follow are designed
Vehicle is In-Warranty and to an Insurer- to encourage a fair allocation of work
approved service provider if the Motor and promote inclusivity in the selection
Vehicle is out-of-warranty. The standards of Motor-body Repairers onto panels of
and specifications required for Insurer- Insurers.
accreditation are different and less
stringent to those required by OEMs. 7.8. The following principles will be applicable
concerning Insurers:
7.4. Insurers can accredit a large volume of
service providers to undertake out- of- 7.8.1. Insurers must adopt measures to
warranty repairs onto their panels. Some promote the fair allocation of work
of the large Insurers can have up to 300 to Repairers on their panels, with
service providers, who meet the Insurer a preference for firms owned by
standard, appointed onto their panels. HDIs. Such measures can include,
amongst others, panel rotation or
7.5. From complaints received, the Commission preferential allocation to HDI firms.
found that some Insurers:
7.8.2. Insurers must approve any Repairer
7.5.1. appoint large numbers of service that meet their standards and
providers onto their panels, but specifications, to undertake repairs
allocate work to a few, repeatedly; on out-of-warranty Motor Vehicles.
7.5.2. limit the number of Motor-body 7.8.3. To ensure that the panel
Repairers whom they appoint appointment process is fair,
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Guidelines for Competition in the Automotive AftermarketInsurers shall publish the standards 7.8.6. Insurers shall publish a list of all
used to accredit Repairers on their their Repairers on their websites
websites and/or other suitable and/or other suitable media.
media. Also, Insurers shall formally
disclose reasons to applicants fully 7.8.7. Insurers shall not appoint any
setting out why their applications Repairer to its panel for a period
for panel appointment were exceeding five (5) years and
rejected. should not continuously renew the
appointment of the same Repairer
7.8.4. Insurers shall offer consumers if such appointment or renewals
more choice of Repairers within are to the unreasonable exclusion
their geographic area, for out-of- of the appointment of other
warranty repairs. Repairers capable of effecting
repair and/or maintenance work on
7.8.5. Insured Motor Vehicles that are In- Motor Vehicles within a Designated
Warranty will only be allocated for Geographic Area.
repair to (OEM) Approved Motor-
body Repairers.
8. APPOINTMENT OF DEALERS BY OEMs
8.1. The Guidelines in this section introduce 8.4. South Africa’s Dealership culture is
measures for the appointment of Approved characterised by grand-scale, impressive
Dealers by OEMs. showrooms. It has been submitted to the
Commission that the costs of establishing
8.2. OEMs typically appoint Dealers for the sale a Dealership can be exorbitant, with start-
of their Motor Vehicles and related spare up costs for most brands averaging R60
parts (i.e. Approved Dealers). In addition million (ZAR) and upwards. Some of the
to retail activities, Approved Dealers costly requirements imposed by some
operate workshops where they undertake OEMs include the procurement of furniture,
service, maintenance and mechanical fittings and finishes internationally. OEM
work on their brand’s Motor Vehicles. Most requirements regarding the size and
OEMs appoint Dealers through a franchise location of premises and land are also
agreement, although some OEMs, such as cited as a contributor to the high start-up
Volvo, have OEM-owned Dealerships. costs. In this market, finance is thus a high
barrier to entry.
8.3. Dealerships tend to be located in prime
locations in large urban centres (cities and 8.5. Further, the Commission has found that
metros). There are few to none Approved application and selection process for
Dealers located in rural, peri-urban or the appointment of Approved Dealers is
township centres of the country. deemed unfair and not transparent. There
Competition Commission South Africa • www.compcom.co.za 17
17have been allegations that this process is 8.7.4. OEMs are required to inform
particularly biased against HDI applicants. applicants that were rejected on
quantitative grounds in a particular
8.6. The guidelines that follow are designed geographic area should an
to address some of the above concerns. opportunity for the establishment
The section includes measures targeted of a new dealership arising the
to reduce financial barriers created by the same geographic area within 12
requirements imposed by OEM; measures months of the date of rejection.
to promote pro-competitive procurement
processes by OEMs and measures to 8.8. The following principles will be applicable
promote the entry of HDIs into the concerning facilities of Dealerships:
Dealership market.
8.8.1. OEMs must adopt measures to
8.7. The following principles will be applicable lower financial barriers to entry and
concerning applications made by promote the participation of HDIs
prospective Dealers: in the Dealership market. These
measures can include, amongst
8.7.1. OEMs shall establish fair and others, offering varying iterations of
transparent proce sses for the Dealership options to prospective
s election of Approved Dealers applicants or locating Dealerships
who meet the specific OEM’s in under-serviced geographic
requirements. areas.
8.7.2. Approved Dealers shall be 8.8.2. OEMs shall not impose onerous
selected based on a realistic obligations on prospective Dealers.
evaluation conducted by the The requirements for Approved
OEMs of the market potential for Dealers must be reasonable and
Approved Dealers in a Designated have an economic rationale,
Geographic Area. In keeping with particularly concerning the size of
the transformation objectives for land, showrooms, furniture, fittings,
the industry, preference must and finishes.
be given to applicants who are
owned or controlled by HDIs who 8.8.3. OEMs shall not require Approved
objectively meet the specific OEM’s Dealers to make further investments
requirements. within established facilities if such
investments are not objectively
8.7.3. To ensure that the process is required as a fulfilment of the OEM
transparent, OEMs shall publish standard, such as, for example, due
the standards used to assess and to changes in corporate identity,
select Approved Dealers on their models of Motor Vehicles to be
websites and/or other suitable sold and/or technologies to be
media. Also, OEMs shall formally used by Approved Dealers (which
disclose reasons to applicants fully list is not exhaustive).
setting out why their applications
for dealership were rejected. 8.8.4. OEMs shall approve multiple
suppliers for required branding
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Guidelines for Competition in the Automotive Aftermarketand corporate identity elements of alternative suppliers if they are of
dealerships, from which Approved like kind and quality. In line with
Dealers can procure. the Commission’s transformation
objectives, preference must be
8.8.5. OEMs must not forbid or penalise given to alternative suppliers who
Approved Dealers from purchasing are owned or controlled by HDIs.
the said goods from such approved
9. PREVENTING ANTI-COMPETITIVE
INFORMATION SHARING BY
MULTI- BRAND DEALERSHIPS
9.1. The Commission is concerned about the 9.3.2. Approved Dealers that sell new Motor
exchange of Commercially Sensitive Vehicles and products of competing
Information between Approved Dealers OEMs shall ensure that no Commercially
that sell new Motor Vehicles and products Sensitive Information is provided or shared
of competing OEMs (i.e. multi-brand with competing OEMs.
dealerships).
9.3.3. Approved Dealers that sell new Motor
9.2. The guidelines that follow introduce Vehicles and products of competing
measures which OEMs and Approved OEMs shall implement Information
Dealers should heed regarding the Barriers and measures to ensure that there
management of Commercially Sensitive is no exchange of Commercially Sensitive
Information which may affect competition. Information between them and competing
OEMs. These Information Barriers include
9.3. The following principles will be applicable but are not limited to the following:
in relation to the exchange of Commercially
Sensitive Information: a) OEMs and Approved Dealers shall keep
separate, internal accounts for downstream
9.3.1. Approved Dealers that sell new Motor retail offerings in a way that permits the
Vehicles and products of competing OEMs profitability of these retail products to be
shall ensure that they do not engage in monitored.
price co- ordination. Specifically, the prices
of competing Motor Vehicles and products b) To the extent that an employee of
should be determined by different an Approved Dealer has access to
individuals within the dealership. Persons Commercially Sensitive Information about
setting prices for new Motor Vehicles and a specific OEM, that employee shall
products of competing OEMs must do so ensure that he/she does not communicate
independently of each other. such information to any competing OEM
or facilitate or permit the use of such
information by a competing OEM, other
Competition Commission South Africa • www.compcom.co.za 19
19than in aggregated, historical or summary d) OEMs and Approved Dealers shall
form. implement internal training to ensure that
its employees are aware of and understand
c) Employees of OEMs and Approved the provisions of the Act that are relevant
Dealers involved in the automotive value to the exchange of Commercially Sensitive
chain must sign undertakings not to share Information between competitors,
Commercially Sensitive Information with including the Guidelines on the Exchange
employees of competing OEM’s Approved of Information between Competitors and
Dealers. The undertakings must be stored section 4 of the Act (restricted horizontal
by the OEMs and Approved Dealers and practices) in particular.
be made available to the Commission on
request.
10. FITMENT AND ACCESS TO
SPARE PARTS
10.1. There are approximately between 30,000 parts’ specifications. Approved Dealers
and 60,000 parts and components in a and Approved Motor-Body Repairers are
Motor Vehicle. Spare parts in South Africa obliged to fit Original Spare Parts in the
are regulated by different regulators such repairs of motor vehicles.
as the South African Revenue Service
(SARS) which deals with customs, excise 10.4. The same manufacturer who produces
and tax of imported components and spare parts for OEMs can also produce
the National Regulation for Compulsory the same, but without the branding
Specification (NRCS), which regulates the of the OEM- these are regarded as
safety of the following parts: lights, brakes, “identical” spare parts in the market. Other
brake fluids and seals. As it currently stands manufacturers may also produce similar
the industry standards are aligned with the spare parts, sometimes referred to as
international standards such as European “equivalent” or “equal- matching” spare
Union regulations. parts. In the market for spare parts, there
are are also spare parts which are mined
10.2. The Commission recognises that within from damaged motor-vehicles, while
the aftermarket automotive industry, Spare functionally safe- regarded as “green”
Parts are disaggregated based on their spare parts.
origin or source.
10.5. In this Guideline, the Commission has
10.3. OEMs appoint manufacturers to decided to use a more simplified approach
manufacture replacement parts (“Original and refers to Original and Non-Original
Spare Parts”) for use in the repair of the Spare Parts. This Guideline’s reference to
OEMs brand. The OEM is the holder of Non-Original parts excludes “counterfeit”,
the intellectual property rights over the “grey” and all illegally-sourced spare parts.
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Guidelines for Competition in the Automotive Aftermarket10.6. The Commission has received complaints on their motor vehicles during the In-
from ISPs and consumers regarding OEMs Warranty; should a Non-Original Spare Part
who refuse to sell them Original Spare be fitted in an In-Warranty Motor Vehicle,
Parts for use in the repair of motor vehicles. this may void the vehicle’s Warranty.
Such behaviour limits the ability of an ISP However, Original Spare Parts tend to be
to undertake the required repairs, and more expensive than Non-Original Spare
further limits a consumer’s choice to use parts and thus not affordable for some
Original or Non-original Spare Parts for consumers. The guidelines that follow
their vehicle. address issues related to access to spare
parts and the fitment of spare parts during
10.7. Further, consumers are also prevented the In-Warranty period.
from fitting Non-Original Spare Parts
Fitment of Non-Original Spare Parts for In-Warranty Motor
Vehicles
10.8. The principles that follow introduce the the damage and if the Warranty
concept of the use of Non-Original Spare is voided. If there is a dispute
Parts for In-Warranty Motor Vehicles. a consumer can approach the
The rationale is to increase consumer relevant authority to investigate
choice in the fitment of Spare Parts for In- the matter. A consumer that suffers
Warranty Motor Vehicles by allowing the harm from a defective product can
Motor Vehicle owners to choose between bring a claim against any party in
Original and Non- Original Spare Parts. the supply chain in terms of section
10.8.1. Consumers can fit Original or Non- 61 of the Consumer Protection Act No. 68 of
Original Spare Parts, at a service 2008. Approved Dealers and ISPs must
provider of their choice, whether make consumers aware, in clear and
an Approved Dealer, Approved explicit terms, the risk of damage, including
Motor-body Repairer, or an ISP, Consequential Damage, from the fitment
during the In-Warranty period. of Spare Parts by an ISP, potentially voiding
certain obligations of the OEM in terms of
10.8.2. If there is any damage to the Motor the Warranty.
Vehicle from the fitment of Spare
Parts by an ISP, there is a risk that 10.8.3. To ensure that all the work done on
certain provision in the Warranty a Motor Vehicle is traceable ISPs are
will be voided. However, other obliged to record such In-Warranty work
provisions of the Warranty may undertaken by them in their customers’
remain severable and enforceable. Vehicle Service Books.
The OEM or Approved Dealer may
conduct an assessment at its own
cost to determine the cause of
Competition Commission South Africa • www.compcom.co.za 21
21Sale and distribution of Original Spare Parts
10.9. The guidelines that follow are to ensure protected by intellectual property
that OEMs and/or Approved Dealers make rights or are linked to a Motor
Original Spare Parts available to ISPs, Vehicle’s Security Systems.
where appropriate:
10.9.6. OEMs may not enter into any
10.9.1. OEMs and/or Approved Dealers agreements with manufacturers of
shall make Original Spare Parts Spare Parts, tools or equipment,
available through sales and that will restrain the manufacturer
distribution, to ISPs where required or supplier’s ability to place its
to perform service, maintenance or trademark or logo effectively and
repair work. in an easily visible manner on the
said item.
10.9.2. Conditional sale and distribution
of Original Spare Parts shall only 10.9.7. OEMs may not set minimum retail
be reserved for those items that prices for Spare Parts.
are linked to the Motor Vehicle’s
Security System. 10.9.8. There is no obligation on Approved
Dealers to supply Non-Original
10.9.3. OEMs may not restrict an ISP’s ability Spare Parts.
to procure Original Spare Parts,
when required for the purposes of
effecting service, maintenance and
repair work. OEMs may however
impose restrictions or prohibitions
on ISPs from on-selling Original
Spare Parts to 3rd parties.
10.9.4. An OEM shall allow an ISP access
to security-critical components
subject to the ISP meeting the
OEM’s accreditation requirements
and standards, as per the OEM’s
global practice.
10.9.5. OEMs may not enter into any
agreements with manufacturers
or suppliers of Spare Parts, tools
or equipment to restrict the
manufacturer or supplier’s ability
to sell those goods to ISPs or end
users, except for those Spare
Parts, tools or equipment that are
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Guidelines for Competition in the Automotive Aftermarket11. THE BUNDLED SALE OF MOTOR
VEHICLES WITH VALUE ADDED
PRODUCTS
11.1. In South Africa, when consumers buy a of the Motor Vehicle and the price of the
new Motor Vehicle, they are typically sold Value-Added Products separately.
a Maintenance Plan and/or Service Plan,
included in the purchase price of the Motor 11.5. This will allow consumers to exercise
Vehicle. Most consumers are unaware that choice regarding whether to purchase
the purchase price of the Motor Vehicle is the Maintenance Plan or Service Plan and
bundled with these value-added products. make servicing a more affordable option
for South Africans, whilst allowing for more
11.2. OEMs and their Approved Dealers sell players to provide such Value-Added
these Service and/or Maintenance Plans Products for consumers whose Motor
through a variety of packages, typically as Vehicles are In-Warranty.
a combination of mileage and time such as
3 years / 60 000km; 4 years / 120 000km; 5 11.6. The following principles will be applicable
years /150 000km. The package will allow concerning Service and/or Maintenance
a customer to take their Motor Vehicle in Plans:
for service or maintenance when required
at regular intervals until they reach either 11.6.1. OEMs shall recognise and not
the mileage or time limit. hinder a consumer’s choice to the
following:
11.3. The Commission acknowledges that this
bundling may make the purchasing of 11.6.1.1. purchase Value-Added
these plans easier for some customers Products (such as
who would otherwise have to seek these Maintenance Plans, Service
out separately. However, the Commission Plans and Extended
notes that some customers can and do Warranties) concurrently and
purchase these Value-Added Products together with a new Motor
outside of the standard OEM provided Vehicle from Approved
plan from other third-party suppliers. Dealers;
11.4. The Guidelines that follow provide for the 11.6.1.2. purchase Value-Added
unbundling of Maintenance Plans and Products (such as
Service Plans at the point of sale from Maintenance Plans, Service
the purchase price of the Motor Vehicle. Plans and Extended
Therefore, it is imperative that at the point Warranties) separately from
of sale, OEMs, Approved Dealers, and a new Motor Vehicle from
financiers disclose to customers the price Approved Dealers;
Competition Commission South Africa • www.compcom.co.za 23
2311.6.1.3. purchase Value-Added 11.6.4.1. provide the consumer with
Products from any licensed complete disclosure of:
provider of their choice,
including independent/ a) the purchase price of the
third-party providers; Motor Vehicle;
11.6.1.4. not to purchase Value- b) the purchase prices of Service
Added Products (such and Maintenance Plans and
as Maintenance Plans, other Value-Added Products.
Service Plans and Extended
Warranties) when purchasing 11.6.4.2. disclose to consumers all
a Motor Vehicle. information regarding the
maintenance and repair of
11.6.1.5. purchase Value-Added their Motor Vehicle, as well
Products from a licensed as the terms and conditions
provider at any time after under which they are
the purchase of the Motor required and/or permitted
Vehicle. to maintain and repair their
Motor Vehicle.
11.6.2. OEMs and independent/ 3rd party
providers of Value-Added Products must 11.6.4.3. where appropriate, finance
adopt measures to promote competition providers must provide the
and consumer choice in their offerings. consumer with details of all
Such measures can include, amongst inclusions and exclusions
others, offering Service and Maintenance included in the Maintenance
Plans of varying durations of Service and Plans and Service Plans
Maintenance Plans; including the following
information:
11.6.3. OEMs and independent/ 3rd party
providers must transfer a Maintenance a) the average price for each
Plan and/or a Service Plan to a replacement service interval (at the time of
Motor Vehicle in the instance where the sale of the Motor Vehicle).
Motor Vehicle is written off by the Insurer.
In instances where there is no replacement b) the average price of the parts
Motor Vehicle after a write-off or it is not covered by the Maintenance
feasible to transfer a Maintenance Plan Plan and Service Plan
and/or a Service Plan to a replacement that commonly require
Motor Vehicle, the consumer shall be replacement at specific
afforded the right to cancel the Value- kilometre intervals or upon
Added contract and/or receive a refund of the Motor Vehicle attaining a
the value of the balance of the product. specific age.
11.6.4. To promote transparency and allow for 11.6.4.4. provide the consumer with
product comparisons by consumers at the complete disclosure of:
point of sale of a Motor Vehicle, Approved
Dealers are required to:
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