MOTOR INDUSTRY ADVICE FOR INTERESTING TIMES - Motor Industry Workshop Association
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JUNE/JULY 2020
SLOWLY DOES IT FRANCHISING
Dealers get back Is it the right
to business move for you?
MOTOR INDUSTRY
WORKSHOP ASSOCIATION
ADVICE FOR INTERESTING TIMES
RMI UPDATE: PRE-COVID-19 AUTOMOTIVE EXPORTS EXCEL; COVID-19 SURVEY OF RMI
ASSOCIATION BUSINESSES; WHERE TO FOR THE TYRE INDUSTRY? COVID-19: RETURNING
TO THE WORKPLACE; THE DANGER OF UNMANAGED CONTRACTS; FIXES FOR THE
HONDA CIVIC AND THE FORD KUGA
Driven by
SECURITY
Software based alignment method
for efficient camera and radar
calibration with Bosch: The DAS 3000
is the new multi-brand calibration device
for workshop professionals to adjust
and precisely calibrate sensors of driver
assistance systems.
boschaftermarket.com
What drives you
22 -- NOVEMBER 2014 drives us
JUNE/JULY 2020 www.automobil.co.za
CONTENTS – JUNE/JULY 2020
COLUMNS
05 Driver’s Seat: Jakkie Olivier, CEO of the RMI
07 Editor’s Letter: Kate Kennedy
09 merSETA: Wayne Adams; Acting CEO
66 Tailpiece: Virtual tours of Ford’s museums
P12
RMI NEWS
Editor: Kate Kennedy
kate@thefuture.co.za
12 Pre-COVID-19 automotive exports excel
Sub-editor: Peggy Lendrum
peggy@thefuture.co.za 14 COVID-19 survey of RMI association businesses
28 Where to for the tyre industry?
Design and layout: Heinz Bawa
heinz@thefuture.co.za
Reporter: INDUSTRY NEWS
Greg Surgeon
greg@thefuture.co.za
30 Ensuring the safety of customers and staff
Publisher: Richard Lendrum
richard@thefuture.co.za
P28 32 A breath of fresh air
34 VWSA offers work experience to unemployed youth
Production: Mabel Ramafoko
mabel@thefuture.co.za 36 Women of Steel
Advertising Sales Executives:
38 April new vehicle sales not a surprise
Enver Lawangi, Greg Surgeon, 40 Goldwagen joins the Wolf pack
enver@thefuture.co.za
greg@thefuture.co.za 42 G.U.D. develops hand-wash station for taxi ranks
58 Business resumes for dealers
Future Publishing (Pty) Ltd
6 Rodwiela Road,
Edenburg,
Rivonia
COVER STORY
PO Box 3355, Rivonia, 2128
Tel: +27 (11) 803-2040
P42
22 Motor Industry Workshop Association
RMI Automobil’s Editorial Sub-Committee: Viv Corinaldi;
Gary McCraw, Danelle Van Der Merwe, Brett Ferreira, Kate Kennedy, Advice for interesting times
Greg Surgeon, Jakkie Olivier and Jan Schoeman
A digital version of this magazine is FEATURE
available at www.rmi.org.za
44 Labour Law
Automobil is the official journal of the COVID-19: Returning to the workplace
Retail Motor Industry Organisation (RMI)
which hosts 8 constituent associations: 46 Legal Eagle
ARA (Automotive Remanufacturers’
Association), MIWA (Motor Industry The danger of unmanaged contracts
Workshop Association), NADA
(National Automobile Dealers’ Association), SAMBRA (South African Motor 62 Workshop
Body Repairers’ Association), SAPRA (South African Petroleum Retailers’
Association), SAVABA (South Africa Vehicle and Bodybuilders’ Association), Fixes for the Honda Civic and the Ford Kuga:
TEPA (Tyre, Equipment, Parts Association), VTA (Vehicle Testing Association).
Automobil is available to purchase from the publishers at R25 a copy.
FRANCHISE FEATURE
Automobil is produced and published monthly by Future Publishing (Pty) Ltd for the
Retail Motor Industry Organisation. The views and opinions expressed in the publication
are not necessarily those of the publishers or the Retail Motor Industry Organistion.
While precautions have been taken to ensure the accuracy of advice and information 52 How do I know if I am suited to franchising?
contained in editorial and advertisements, neither the publishers nor the Retail Motor
Industry Organisation can accept responsibility for errors, misrepresentations or
54 Does franchising have a place in the new world order?
omissions, or for any effect or consequence arising therefrom. Permission to republish
any article or image or part thereof must be obtained in writing from the publishers.
56 Your helping hand during a crisis
© Future Publishing (Pty) Ltd
JUNE/JULY 2020 - 3
BELONGING IS
BETTER BUSINESS
Here’s why…
e Legacy and unity
• We’ve been representing the retail motor industry for more than 100 years.
• With more than 8,000-member businesses, our unity is our strength.
e Your voice
RMI represents the industry at:
• Centralised wage negotiations.
• Various MIBCO and Industry-related Boards and committee structures.
• Various South African Bureau of Standards (SABS) committees and working groups.
• The National Regulator for Compulsory specifications (NRCS), defending our industry when compulsory
specifications and standards are compromised.
• The Moto Health Care Fund, Industry Provident Funds and the Sick, Accident and Maternity Pay Fund.
• Meetings hosted by reputable organisations recognised by government, big business, consumers and
relevant stakeholders like Business Unity SA (BUSA).
e Supports your business
• Professional industrial relations advice ensuring procedural and substantive fairness when disciplining
staff.
• Chairing of disciplinary hearings and AUTOMATIC entry at the CCMA, DRC and Labour Court.
• Exceptional CPA support at the National Consumer Commission (NCC) and the Motor Industry
Ombudsman of South Africa (MIOSA).
• Facilitation of a business-to-business complaint where both parties are RMI members, with a
complaint resolution rate in excess of 95%.
• Training needs and representation via merSETA and W&RSETA.
• Industry-specific products like RMI4BEE, RMI4LAW, RMI4OHS and RMI4SURE.
e Keeps you in the know
• Industry labour relations seminars.
• Automobil magazine and weekly web letters.
• Commenting on industry topics in the media,
and participating in and hosting numerous
conventions and shows.
4 - JUNE/JULY 2020 www.automobil.co.za
DRIVER’S SEAT
Where belonging matters
Extraordinary times call for extraordinary
strength and courage
T
his is without a doubt the most In preparation for work readiness the lockdown, but at the same time
challenging economic and our members have adopted a phased the global retraction of the economy.
trading period the RMI and approach to help alleviate financial We need to be agile, adaptable and
its associations have experienced in pressure until business momentum resilient during this time. We have
our history. The sustainability of the can resume. It has allowed us time found new ways of connecting and
automotive aftermarket is at a critical to ensure our businesses are all fully talking to members and customers
junction. compliant with the stringent sanitisation with zoom calls and podcast and we
regulations and protocols which need have seen virtual training taking the
I appreciate that the last two months to be carefully adhered to. The reality lead. Moving forward we will continue
have created a lot of financial pressure is that just one positive COVID-19 case to use these digital channels but I
on all of our members. The survival of will close a business and we cannot still see a more blended approach to
the automobile aftermarket sector is afford that at this stage. avoid losing the power of face-to-face
key for South Africa, not only as a vital interaction. Our industry is known for
employment sector and contributor The RMI has accordingly developed its innovation and now more than ever,
to the fiscus, but also as a significant an indepth COVID-19 business risk we need to find new, more effective
enabler of, and support function plan which will be used and updated ways of connecting with customers and
to, many other sectors. Without an for some time to come. We feel staff. We will find a new normal.
effective and operational automotive confident that our industry is ready and
aftermarket, strategically located committed to implement all measures I would like to end off by expressing
in each district, community, town, and maintain compliance at all times. my appreciation and pride in the way
metro and city across all provinces, our member businesses have conducted
we are of the view that vehicle We understand that business recovery themselves in these hugely challenging
safety and effective vehicle repairs will take as long as six to nine months, times. I would like to believe that this
and maintenance will be negatively if not longer, post lockdown to return crisis will present an opportunity to
impacted and detrimental to the much- to a sustainable and profitable return come back stronger together.
needed and speedy recovery of the on investment. We not only have to
economy. deal with the impact of the virus and Jakkie Olivier
For information on the RMI and its workings, visit www.rmi.org.za or call 011 886 6300
www.automobil.co.za JUNE/JULY 2020 - 5
CONSTITUENT
CONSTITUENT
CONSTITUENT
CONSTITUENT
ASSOCIATIONS
ASSOCIATIONS
ASSOCIATIONS
ASSOCIATIONS
A DRIVING FORCE IN SOUTH AFRICA’S AUTOMOTIVE AFTERMARKET
A DRIVING
The FORCE
Retail Motor IN SOUTH
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Organisation AUTOMOTIVE
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ARA - Automotive Remanufacturers’ Association SAPRA - South African Petroleum Retailers’ Association
business-to-business
ARA represents the remanufacturing trading is encouraged
trade sector. This includes in the interests ofSAPRA
all stakeholders.
represents the interests of all petroleum retailers in South
ARA - Automotive Remanufacturers’
component remanufacturers involved in safety-critical components, Association SAPRA
Africa. Its -aim Southis to African
improve Petroleum Retailers’for
growth and profitability Association
the investor.
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global retailers
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and profitability Association
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not remanufacturing
to vehiclebytrade
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way
sector. This includes
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the country, intobusiness
a environment.
National Executive Retailers
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machine and and that affect
through one sustainability
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passenger
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imperative.Executive Retailers
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strategy and of the seven
solutions are regional
developed. chairs
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bottom up located
approach around
is a
vehicles.
specialistsARA promotes
inhighway
the repair, the responsible
servicing reuse of remanufactured
and remanufacturing of diesel fuel the country, into a National Executive Committee (NEC), where
equipment,
engine components trucks,
for a stationary
‘greener’ engines and
environment passenger
(carbon footprint). fundamental
SAVABA - SAPRA
South imperative.
African Vehicle and Bodybuilders’ Association
injection
vehicles. systems
ARA fitted to
promotes thediesel enginesreuse
responsible in earth moving
of remanufactured strategy and solutions are developed. This bottom up approach is a
Its members
equipment, are
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stationary consumers and with only the
passenger SAVABA members
fundamental SAPRA areimperative.
professional, certified and regulated vehicle
engine components
best of advice, for
finest service a ‘greener’ environment
delivery, and highest (carbon footprint).
quality workman- SAVABA
body builders - Southin SouthAfrican
AfricaVehicle and Bodybuilders’
who manufacture commercial Association
vehicle
vehicles.
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members are dedicated to providing consumers with only thereuse of remanufactured SAVABA members (tanker, are professional, certifiedtrucks
and regulated vehicle
ship.
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and Bodybuilders’ and trailers)
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best of advice, finest service delivery, and highest quality workman- body
bus builders
bodies in
(commuterSouth Africa who
and tourist type).manufacture
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manufacture vehicle
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ship. SAVABA
body members
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best of advice, Industry
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bodybodies
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manufacture to ensurevehicle
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of the industry. WE ARE BETTER TOGETHER
technical and business management skills training in order for
HEAD OFFICE
members to meet the www.rmi.org.za
demands of the industry.
Randburg, Gauteng tel: +27 11 886 6300
WE ARE BETTER TOGETHER
HEAD OFFICE www.rmi.org.za
Surrey Square Office Park, 330 Surrey Avenue, Ferndale, Randburg, 2194, Gauteng, P. O. Box 2940, Randburg, 2125
Randburg, Gauteng tel: +27 11 886 6300
REGIONAL
HEAD Square
Surrey OFFICES
OFFICE www.rmi.org.za
Office Park, 330 Surrey Avenue, Ferndale, Randburg, 2194, Gauteng, P. O. Box 2940, Randburg, 2125
Highveld: Randburg
Randburg, tel: +27
Gauteng tel: +27 11
11 886 6300, Northern: Pretoria tel: +27 12 348 9311, KwaZulu-Natal: Durban tel: +27 31 266 7031
886 6300
REGIONAL
Eastern OFFICESPort Elizabeth tel: +27 41 364 0070, Western Cape: Cape Town tel: +27 21 939 9440,
Cape/Border:
Surrey Square Office Park, 330 Surrey Avenue, Ferndale, Randburg, 2194, Gauteng, P. O. Box 2940, Randburg, 2125
Highveld:
Free StateRandburg tel: +27
Northern Cape: 11 886 6300,
Bloemfontein Northern:
tel: +27 51 430Pretoria
3294 tel: +27 12 348 9311, KwaZulu-Natal: Durban tel: +27 31 266 7031
REGIONAL
Eastern OFFICESPort Elizabeth tel: +27 41 364 0070, Western Cape: Cape Town tel: +27 21 939 9440,
Cape/Border:
Highveld:
Free StateRandburg tel: +27
Northern Cape: 11 886 6300,
Bloemfontein Northern:
tel: +27 51 430Pretoria
3294 tel: +27 12 348 9311, KwaZulu-Natal: Durban tel: +27 31 266 7031
Eastern Cape/Border: Port Elizabeth tel: +27 41 364 0070, Western Cape: Cape Town tel: +27 21 939 9440,
Free State Northern Cape: Bloemfontein tel: +27 51 430 3294
EDITOR'S
LETTER
Tough times for all
D
id anyone think that, At least we’ve been released into Level 3, with a few more
when the country freedoms and a few businesses have been able to resume
closed down at the operations.
end of March, we’d still be
pretty much in the same place The automotive sector has been hard hit. New vehicle sales and
10 weeks later? Life is full export statistics, which are explored on pages 12, 13 and 38,
Editor: Kate Kennedy of inconvenience – limited draw a grim picture of reality. And the feedback from a number
movement, a nightly curfew of RMI association business owners in response to a quick survey
and cabin fever – and stress. And the worst part, for (page 14) give insight into what the lockdown has done to local
me anyway, is that there doesn’t seem to be an end in businesses.
sight.
To those lucky enough to be allowed to operate, please take care
There are predictions that South Africa will reach its of yourselves, your staff and your customers. To those forced to
peak of COVID-19 infections in September, by which stay home, why not use some of the time making fond memories
time I sincerely hope the government has amassed with your loved one?
enough life-saving equipment to treat the worst cases.
TED HALF PAGE AD 20/2/19 09:12 Page 2
But this does mean that we’re likely to in this frustrating ‘Til next time
C M Y CM MY CY CMY K
limbo for months to come. Kate
www.automobil.co.za JUNE/JULY 2020 - 7
TELL US WHAT'S
ON YOUR MIND
RMI EXECUTIVES RMI BOARD MEMBERS RMI DIRECTORS RMI HEAD OFFICE
Chief Executive Officer: Jakkie Olivier - CEO ARA Danelle van der Merwe
Jakkie Olivier Jeánne Esterhuizen - President Attie Serfontein Brand and Communication Manager
Cell: 082 452 5153 Cell: 082 926 5846
Cell: 082 452 5150 Frans Maritz - Vice President
danelle.vandermerwe@rmi.org.za
jakkie.olivier@rmi.org.za Vuyani Mpofu attie.serfontein@rmi.org.za
Chief Operations Officer: Jeremiah Modiba - Advocate MIWA Nonhlanhla Noni Tshabalala
Jan Schoeman Ferose Oaten Pieter Niemand HR Manager
Cell: 082 552 7712 Mark Dommisse Cell: 082 812 5391 Cell: 083 208 7161
jan.schoeman@rmi.org.za Frank MacNicol pieter.niemand@rmi.org.za noni.tshabalala@rmi.org.za
Financial Director: Eugene Ranft NADA
Julian Pillay
Renee Coetsee Lindsay Bouchier Gary McCraw Regulatory Compliance Manager
Cell: 082 412 6760 Riaan Botha Cell: 082 560 6613 Cell: 082 560 6625
renee.coetsee@rmi.org.za Les McMaster gary.mccraw@rmi.org.za julian.pillay@rmi.org.za
Company Secretary: Andrea Bogner SAMBRA
Gary McCraw Sello Molemela Richard Green 011-886-6300
Cell: 082 560 6613 Eduan Naude Cell: 082 378 4899 www.rmi.org.za
gary.mccraw@rmi.org.za richard.green@rmi.org.za Surrey Square Office Park
George Jacovides
330 Surrey Avenue
Charles Canning SAPRA
Ferndale, Randburg
Danie Fourie Vishal Premlall
2194
Trevor Gordon Cell: 082 886 6392
vishal.premlall@rmi.org.za
RMI REGIONAL OFFICES
TEPA
Hedley Judd Julian Pillay: Regional Manager: KZN
Cell: 071 892 1475 Joy Oldale: Regional Manager: Western
RMI PARTNERS hedley.judd@rmi.org.za Cape
VTA, SAVABA Erwin Stroebel: Regional Manager:
RMI4Sure 0860-104-202 RMI4BEE 0861-764-233 Julian Pillay Eastern Cape/Border
RMI4Law 0861-668-677 RMI4OHS 012-998-7139 Cell: 082 560 6625 Jeff Molefe: Regional Manager: Central
Jacques Viljoen: Regional Manager: Free
julian.pillay@rmi.org.za
State/Northern Cape
TRAINING
Louis van Huyssteen Highveld: Randburg: 011-886-6300
@AutomobilSA Cell: 082 560 6623 Northern: Pretoria: 012-348-9311
louis.vanhuyssteen@rmi.org.za KwaZulu-Natal: Durban: 031-266-7031
Facebook.com/AutomobilSA TRANSFORMATION Eastern Cape/Border: Port Elizabeth:
Joy Oldale 041-364-0070
Cell: 082 464 4009 Western Cape: Cape Town: 021-939-9440
www.rmi.org.za Free State/Northern Cape: Bloemfontein:
joy.oldale@rmi.org.za
051-430-3294
8 - MAY 2015 www.automobil.co.za
INDUSTRY
COMMENT
and the merSETA
Wayne Adams, merSETA Acting CEO
T
hese are indeed difficult and NC(V) STUDENTS As the intermediary between the education
unpredictable times for industries Level 4: 13 July and training and the manufacturing and
throughout the globe. Level 3: 20 July engineering sectors, the merSETA has forged
Level 2: 27 July strong inter-organisational and company
The terrible knock in economic growth, relationships that will stand the test of time.
reflected in the massive growth in Several TVET colleges have already
unemployment numbers and the developed learning materials both These relationships span decades. While
dramatic drop in consumer behaviour, for TV and radio broadcasts available there is likely to be a decline in the number
has spared no company and no country. through the DHET website. These of training opportunities in the immediate
initiatives will continue beyond the future, economies are bound to bounce back
The SETAs, too, have been affected. The return of students to campuses. once the pandemic is under control and
skills levy payment holiday announced by Furthermore, all students who will lockdown restrictions are lifted.
the President at the start of the lockdown not have returned to campuses in
in March will have some negative June and July will also be supported So, we should never take our eyes off the
implications, but in keeping with a remotely until they return to campus ball when it comes to skilling our workforce
ministerial directive, we continue stipends according to the phase-in process. and students.
for learners.
TVET colleges are using textbooks, On behalf of the merSETA, I wish to applaud
It is important to note that the 2020 e-Guides, past question papers, those companies that have stepped into
academic year in the Technical and and uploaded YouTube videos to the breach caused by the short-supply of
Vocational Education and training sector assist students. These are supported personal protection equipment. In particular,
has been restructured. through bulk text messages from we appreciate those companies that have
colleges and WhatsApp groups set up re-engineered production processes to
The minister has provided the following by lecturers. manufacture face-marks, gloves, ventilators as
tentative return dates: well as launching emergency field hospitals.
NATED Trimester (ENGINEERING) In addition, Indlela has implemented
students fresh ways for trade tests to continue It once again shows the agility of companies
N6 & N3: 10 June without breaking the COVID-19 in the mer-SECTOR.
N5 & N2: 15 June regulations.
N4 & N1: 22 June We have taken a huge hit, but we also have
NATED Semester (BUSINESS STUDIES) A strong suit of our sector is the strong shock absorbers.
students inter-connectedness of the supply
N6: 25 June chain process. This has a wholesome 'Till next month!
N5: 29 June impact on training in all value creation Wayne Adams
N4: 06 July processes. merSETA Acting CEO
www.automobil.co.za JUNE/JULY 2020 - 9
RMI
NEWS
COVID-19
CONTRIBUTION DISCOUNT
WE KNOW TIMES ARE TOUGH, AND THAT THE LOCKDOWN HAS AFFECTED
MANY SOUTH AFRICANS’ INCOME. THAT’S WHY WE ARE OFFERING A 50%
CONTRIBUTION DISCOUNT FROM APRIL TO JUNE 2020.
Remember, our call centre is open to answer any questions you might have
about your option. During this time of crisis, we are committed to:
• Being available to our members with the least
amount of disruption
• Ensuring sustainability of the Scheme for the best
interest of all our members
• Ensuring that our industry is taken care of during
this time
Find out more:
0861 000 300 | www.mhcmf.co.za
10 - SEPTEMBER 2018 www.automobil.co.zaCONNECT WITH US
DOWNLOAD THE MHC
MOBILE APP NOW
www.mhcmf.co.za
www.automobil.co.za SEPTEMBER 2017 - 11INDUSTRY
COMMENT
Pre-COVID-19 automotive
exports excel
The nearly 100% decline in April 2020 new vehicle
sales and export figures represent a barometer of
the COVID-19 impact on the domestic automotive
industry and the economy at large. Businesses and
consumers remain uncertain on what the future
holds through the current lockdown. As the bedrock
of South Africa’s manufacturing sector, vehicle and
automotive component production, which eased back Dr Norman Lamprecht, Executive Manager
of the National Association of Automobile
into production as of 4 May 2020, remain imperative to Manufacturers of South Africa (NAAMSA)
South Africa’s economic fortunes.
D
espite already facing domestic and substantial 27.6% of value addition to be on high-value locally beneficiated,
foreign economic headwinds in within the domestic manufacturing logistics-friendly automotive components.
2019, the domestic automotive output was derived from vehicle and
industry once again excelled on the export automotive component manufacturing The trade arrangements that South
side. Several new export records in 2019 activity, positioning the industry and its Africa enjoy with the European Union
compensated to a large extent for the broader value chain as a key player within (EU), allowing for duty free vehicle
progressive decline in the domestic new South Africa’s industrialisation landscape. and automotive component exports
vehicle market over the past six years. The South African automotive industry’s to the 28 countries in the region, as
The 2020 Automotive Export Manual performance remains dependent on well as the AGOA trade arrangement
publication just released the National an intelligent partnership between the with the USA, enhanced exports to
Association of Automobile Manufacturers sector and government to develop those countries. The EU, with exports
of South Africa (NAAMSA) and the the industry. One of the attractions of of R129,7 billion, or 64.3% of the total
Automotive Industry Export Council South Africa’s automotive policy regimes export value of R201,7 billion, was the
(AIEC) highlights that the export value over the past three decades has been domestic automotive industry’s main
of vehicles and automotive components its long-term vision and consistency. export region in 2019. Africa was the
comprised a record R201,7 billion, industry’s second largest export region
equating to 15.5% of South Africa’s The domestic automotive industry’s with an export value of R31,9 billion,
total exports in 2019. A record 387,125 top export markets in value terms in or 15.8% of the industry’s total export
vehicles worth a record R148 billion, 2019 were Germany, with R75,5 billion, value. The African Continental Free
along with a record R53,7 billion in followed by Belgium, the UK and the Trade Area (AfCFTA) to be implemented
automotive components, were exported USA. The UK, with 101,401 vehicles, was on 1 July 2020 could unlock many
to 151 countries in 2019. From 2018 to once again South Africa’s top destination opportunities for South Africa in
2019, the total export values more than for vehicle exports in 2019. Volkswagen, expanding regional integration into the
doubled in the case of 19 countries. with its Polo model, topped the country’s continent, considering that 84.3% of the
export rankings in 2019. South Africa country’s automotive exports into Africa
The broader automotive industry’s remains a strategic supplier of catalytic were destined for SADC, which is the
contribution to the GDP in 2019 stood converters to the world, and by value, free trade area South Africa is part of.
at 6.4% (4% manufacturing and 2.4% this component category maintained its
retail). As the largest manufacturing dominant export position under the APDP On the import side, the top country of
sector in the country’s economy, a in 2019, as the focus of exporters tends origin for vehicle imports in 2019 was
12 - JUNE/JULY 2020 www.automobil.co.zaIndia, with 106,199 units, or 36.5% of
total passenger car and light commercial
vehicles imported. As a production hub
for entry-level and small vehicles, most
of the vehicles imported from India fell
in these categories which comprise the
bulk of new vehicle sales in the domestic
market. India’s profile is suited to produce
small cars, which dominate its domestic
market. Volkswagen’s Polo Vivo is the only
vehicle in these segments manufactured
in South Africa. The value of vehicle
imports from Germany, which included
the premium brands, however, was
almost 50% higher compared to those
imported from India. The automotive
policy regime in South Africa encourages
domestic OEMs to manufacture high
volumes of selected models linked to in line with the industry’s record vehicle South Africa is highly exposed to economic
export contracts to obtain economies of production volume, supported by the conditions in China and the world economy
scale, coupled with low-volume models record vehicle export volume in 2019. in general, and the COVID-19 pandemic
imported to complement domestic Germany, Thailand, Japan, the US and will stifle export-oriented industries and
market mixes. South Africa has one of the China represented the main countries manufacturing in the foreseeable future.
most competitive trading environments of origin for these components. High South African exporting companies will be
in the world, and in 2019 offered value, capital-intensive componentry, required to consider various scenarios for the
consumers a choice of no fewer than 46 such as the powertrain and telematics, world economy and global trade patterns in
passenger car brands and 2,507 model which collectively account for about the short to medium term. The automotive
derivatives, the widest choice of new 50% to 60% of the value in a modern industry across the world is currently
cars to market size ratio in the world. vehicle, are mainly imported into South experiencing unprecedented challenges
Africa and the remainder sourced in due to the global lockdowns implemented
Nine of the top 10 selling vehicles in the domestic market. Global sourcing across all major automotive manufacturing
2019 were South African-built passenger principles apply, which mean that countries to flatten the COVID-19 curve, and
cars and light commercial vehicles. every vehicle manufacturer sources South Africa is no exception to this. However,
The Toyota Hilux, with 40,934 units, a specific component from a specific since the grand vision of the automotive
was the most popular model sold in globally recognisable brand supplier. industry involves electric vehicles, connected
the country in 2019, followed by sales cars and autonomous driving, the latter
of 29,681 units by the top-selling South Africa’s global vehicle production two could just be accelerated as a result.
passenger car, the Volkswagen Polo ranking remained at 22nd in 2019,
Vivo. An interesting phenomenon is although its market share improved Globally, there is an interdependent
that South African motorists are more from 0.64% to 0.69% due to the record relationship between the automotive
inclined to rather drive bakkies, which 631,983 vehicles produced in 2019, industry and governments – the automotive
have both commercial and leisure vehicle supported by the industry’s record vehicle industry depends on government support
applications, than passenger cars. export performance. In terms of global to improve viability, while governments
LCV production, South Africa was ranked support automotive industries to spur
Original equipment (OE) component 14th with a market share of 1.25%. South economic development. In South Africa
imports by the seven vehicle Africa remained the dominant market the success of the country’s automotive
manufacturers in South Africa increased on the African continent and accounted industry has and will continue to be of
to R106,8 billion in 2019, up by R9 billion, for 57.2% of total African vehicle central importance to the future growth and
or 9.2%, from the R97,8 billion in 2018, production of 1,12 million vehicles. prosperity of the country’s economy.
www.automobil.co.za JUNE/JULY 2020 - 13RMI
NEWS
To get a better idea of what life has been like for the businesses of the
RMI associations, we asked a few member businesses some pertinent
questions about their experiences under lockdown.
What has been your biggest I would certainly have been
challenge, considering your more specific in regulating the
sector and location? transport industry, taking advice
Planning the eventual opening from role players like the RMI and
with half-staff. A criteria was their respective associations.
worked out and put into place.
Some of the staff who have been What are your predications for your
with us for 45 years were placed sector for the remainder of 2020?
on UIF until further notice. 2020 will go down in history. 2020
is when a vast number of people
What help have you received employed in the motor trade will
during this time? become part of the unemployment
Government has changed the whole statistics. 2020 is when many
pandemic into a political, racial ploy. workshops will close, forever. 2020 is
What help can I expect, being of when the jobless will turn to crime,
the wrong colour? Ministers cannot just to put food on the table. 2020
wait to get a TV slot to add their is when businesses change into
five cents worth, which I found to ‘survival’ mode, cutting on most
be contradictory and worthless. expenses, like insurance, like security,
ARA like purchasing cheap parts, like
Frank Mac Nicol What one thing would you getting rid of staff that are not multi
Almo Engineering. have done differently to skilled, like not paying membership,
Virginia, Free State better assist your sector? like not using computer programmes
14 - JUNE/JULY 2020 www.automobil.co.zaworkforce, limited parts supply
changes and a small measure of
customer support from essential
workers, it’s impossible to provide
enough revenue to cover the
running costs and look after your
workforce and their loved ones.
What one thing would you
have done differently to
better assist your sector?
By listening to the private sector the
government can assist in growing
the economy which they brought to
its knees. The three key areas I think Executive summary by
will opening up the playing fields Attie Serfontein, National
are: getting rid of the senseless BEE Director, ARA
structures, silencing the unions, and On a national scale, the ripple effect
doing away with the unnecessary to economies of scale and industries
strict labour laws that prevent the with whom the motor industry is
right person being hired for the intertwined, which directly resulted
job. Stop funding SOEs with hard- in severe economic damage, and
earned money and rather put it more-so SMME businesses has
back into the economy through been a huge challenge. We have
the right channels, which will then seen major job losses, and with UIF
that have annual royalties, like not create job creation in SMMEs. unable to process the mass number
paying franchise fees... I am afraid of claims for its Temporary Employer/
the list is endless. Staff will have What are your predications Employee Relief Scheme (TERS)
to agree to take pay cuts to retain for your sector for the applications, salaries have often
their jobs... Unfortunately tougher remainder of 2020? been left to business owners to pay.
times are looming. The whole Looking at the positive side with
lockdown was implemented for the the vehicle parts on the increase The RMI has kept its members
right reason, but was conducted in because of a weaker Rand, the abreast (in record time through
the most unprofessional way. The fuel price and interest rates is at its COVID-19 Monitor circulars) of
price for their [government’s] selfish its lowest in years. With new vehicle financial relief options provided by
recklessness cannot be calculated as sales down and the economy under government and private funds as
yet, but the crunch is approaching pressure, the aftermarket repairs these are released in the media,
at a rapid rate. ARA might survive, and second-hand sales tend to be as well as any developments
but by the skin if their teeth. in a better position. However, with and amendments to COVID-19
all the job losses and the lower or regulations. In a continued effort to
Carlo Du Plessis no income current situation faced reduce the financial impact on its
Cencar by most workers, the future does SMME member businesses, the RMI
Location not seem to be too colourful. has, and continues to, play a pivotal
Even the help from government role in negotiations with industry
What has been your biggest in terms of UIF and grant pay- stakeholders such as MIRF, MIFA,
challenge, considering your outs will not replace salaries and MIBCO, MHC, MISA, RMA, UIF –
sector and location? the sense of purpose that comes TERS, the Department of Labour
Even with a smaller rotating with being gainfully employed. and other government bodies.
www.automobil.co.za JUNE/JULY 2020 - 15RMI
NEWS
For the remainder of 2020, a close What one thing would you have done
eye will need to be kept on the differently to better assist your sector?
workforce, budget and incoming work We should have done a better job to
and compared carefully with previous interpret the regulations, to communicate
months or years of operation. Many to our clients, employees and their
ARA member businesses are running families and share our experiences with
at a loss, and it will take months, retailers from all brands in our area.
if not years in some instances, to
recover from the onslaught of the What creative solutions have you developed
pandemic. New methods of trade in order to survive the lockdown?
will have to be adapted to and a) We have closed labour intensive
combined with innovative thinking, diversifications even if we were
to minimise lost revenue and jobs. allowed to sell from there.
b) We have worked a maximum of two
shifts per person to reduce the hours.
c) We are providing a good lunch for
every working staff member.
d) We have reduced the non-essential stock
items to ensure we have fuel available.
e) We have postponed all leave that
was due during this period.
The RMI has pro-actively studied all SAPRA f) We (the management) are spending more
of the government regulations, and Gerrie Lewies time on site to deal with incidents.
amendments thereof (subsequently, Futurent
circulating notices) – to best equip its Pretoria What are your predications for your
members with the tools needed to sector for the remainder of 2020?
manage the impact of COVID-19. Given What has been your biggest We will remain at about 50% to 60% of
the nature of a pandemic – that cannot challenge, considering your the ‘old normal’ fuel sales for the next two
be predetermined – the response of the sector and location? to three months. The sales should increase
RMI received praises for its swift action, One of the biggest challenges we had, to 70% to 80% of the “old normal” for the
and co-operation with the industry. and still have, is the interpretation remainder of 2020. The staff complement
of the regulations. We have been may increase from the current two shifts to
In terms of emergency repairs (at bombarded with rules and regulations three or four shifts for the next few months.
the stage of alert level 5), ARA from the oil companies and fake news
member businesses have marketed from everywhere. Now we have a
their availability to render emergency much better understanding of how
repairs to their clientele, with to deal with COVID-19. Another
skeleton staff in place (and short-time challenge we had was to get the staff
procedures were followed), together on site and to ensure they follow
with the required permits. More- instructions. And then we have clients
over, UIF – TERS was approached who do not adhere to any regulation
via MISA to ensure employees are
awarded (proportionately) fiscally What help have you received
during the pandemic. ARA member during this time?
business have adhered to government The oil companies gave rental relief
regulations (in accordance with and deferred fuel payments and the
RMIs interpretation of regulations), banks deferred loan repayments August Fleischman
to ensure a smooth operation for three months. From UIF, we Fourways Filling Station (Pty) Ltd
during the different alert levels have not received any payments. Bapsfontein
16 - JUNE/JULY 2020 www.automobil.co.zaWhat has been your biggest continue in this trajectory for the exponentially accelerated a level of
challenge, considering your medium foreseeable future. As the creative and innovative thinking that
sector and location? numbers increase, we recommend that now makes the traditional business
Survival of the business. business owners practice sanitisation model look archaic. One thing is
protocols more vigorously than ever certain – although we can’t be sure,
What help have you received before. It is further imperative that exactly, what the fuel station of the
during this time? citizens obey the President’s orders future will look like, we can be certain
UIF payments to staff sitting at home. to practice all cautionary measures. that it won’t have much in common
The oil company allowed us to order with the features we’re familiar with
smaller volumes. The banks offered SAPRA members are proud to today. Clearly business unusual appears
payment holidays on instalments. be able to service the public and to be the new norm and the early
emergency services during this time. change adopters will be winners.
What one thing would you While it is a stressful time for all,
have done differently to we are working to keep the moral
better assist your sector? of employees at stations up and we
To be able to sell at full capacity encourage the public to acknowledge
as the staff is already there – the sacrifice these people made
cigarettes, hot foods, etc. since the start of lockdown.
What creative solutions have It is also important to stress that SAVABA
you developed in order to while convenience stores are open, Jaco Bezuidenhout
survive the lockdown? in the spirit of the lockdown, we are Hydro Plant
Extended our cold foods product promoting responsible visits to these Silverton, Pretoria
range and added more groceries stores. We need to contain and control
items on the shelves. this outbreak any way we can. What has been your biggest
challenge, considering your
What are your predications for your We have observed many cases of non- sector and location?
sector for the remainder of 2020? compliance by business owners as a Ours was two-fold. Due to level
After lockdown we would be result of misinterpreted regulations 5 lockdown, our sector was not
running on 80% of 2019 volumes or, in some cases, disregard for permitted to operate. This meant
in 2020 and some service stations the regulations. The authorities that we could not complete any
and jobs will not survive. have been very active and there orders that we received and
are many examples where business started on before the lockdown
owners suffered penalties and fines. commenced. Secondly, as most of
Rather err on the side of caution, the OEM dealers were not allowed
if unsure contact our offices. to sell any commercial vehicles,
new orders were not coming in.
Business will never be the same and
we all must accept the ‘new normal’. What help have you received
Interestingly the challenges during during this time?
COVID-19 have to some extent The only help we received was the
accelerated this change. It has forced UIF – TERS grants from government.
business introspection, resulting in
business owners adopting leaner What one thing would you
Executive summary by Vishal management strategies, reduced have done differently to
Premall, National Director, SAPRA staff operations, repurposing of the better assist your sector?
The Coronavirus numbers in South product basket in the convenience I believe that, not only our sector,
Africa are now starting to increase store and relooking the offering on but the economy as a whole, would
at an exponential rate, and will a needs basis. The pandemic has have benefited if level 5 was not a
www.automobil.co.za JUNE/JULY 2020 - 17RMI
NEWS
complete and immediate lockdown but What one thing would you staff, keeping them advised on work
rather a staggered approach where have done differently to schedules and health requirements.
most businesses would be allowed to better assist your sector?
continue operating, even if only with It’s uncharted territory and I think What are your predications for your
10% or 15% of their staff compliment. everyone, including government, sector for the remainder of 2020?
are doing the best they can, given Business down 20%.My biggest challenge
What creative solutions have the circumstances. Armchair critics has been dealing with the landlord.
you developed in order to are of no use in this time.
survive the lockdown? Gary Friend
We had to streamline our production What creative solutions have Hi-Q Nelspruit
line to cope with fewer employees you developed in order to Mpumalanga
working on specific jobs. survive the lockdown?
We are trying our best to supply What has been your biggest
What are your predications and service as many essential service challenge, considering your
for your sector for the companies and their service providers sector and location?
remainder of 2020? as we possibly can. It may be our Confusion in what we may and may not
I predict very limited growth (if only hope for business survival. do. Confusion in what the customer
any) in our sector, as companies are thinks we may and may not do.
uncertain about the remainder of Les Richardson Purchasing of stock, paperwork, and
2020, and are holding back on new Supa Quick Silverton logistics. Getting staff to be responsible
purchases of commercial vehicles. Gauteng once they leave the workplace.
What has been your biggest What help have you received
challenge, considering your during this time?
sector and location? UIF, bank assistance, supplier
Implementing the COVID-19 assistance/relationships and all
plan with staff who have the RMI updates (thank you).
no interest in buying into it,
refuse to wear masks etc. What one thing would you
have done differently to
TEPA What help have you received better assist your sector?
Gary Nagoor during this time? Clean, polish, clean again. Sanitize,
Royal Vulcanizing Station (PTY) LTD Information on legal requirements clean again. Sanitize all touch points.
Kwazulu Natal from RMI but little help from Declutter the customer areas. Steam
OHS implementation. clean the showroom, rest rooms,
What has been your biggest equipment and tools every morning
challenge, considering your What one thing would you
sector and location? have done differently to Stuart Check
Unable to open for April 2020, better assist your sector? South Bay Tyres Truck
resulting significant losses. Offer/receive advice on cutting Division (Pty) Ltd
Major strain on cash flows. staff and no-work-no-pay to Eastern Cape
limit operational costs.
What help have you received What has been your biggest
during this time? What creative solutions have challenge, considering your
Assistance from UIF – TERS for you developed in order to sector and location?
April 2020. A few suppliers have survive the lockdown? Loss of revenue therefore having
granted instalment payments or Created emergency services to retrench staff, short time for the
increased percentage on early responses and outlined what remaining weekly paid staff and salary
settlement discounts, which constitutes essential services. cuts for monthly paid staff members. On
we sincerely appreciated. Created a WhatsApp group for top of that, very bad debtor collections.
18 - JUNE/JULY 2020 www.automobil.co.zaYou can also read
