SAIA

South African Insurance Association

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Draft Competition Code of Conduct for the automotive Sector

On 22 September 2017, the Competition Commission (the Commission) published a Draft Competition Code of Conduct for the Automotive Sector (the Code) in the Government Gazette for public comment.

The Code seeks to address identified concerns in the aftermarket automotive industry and will bind various signatories such as Original Equipment Manufacturers (OEMs), government bodies and industry associations.

The Code followed the Commission’s extensive advocacy work and engagement with various stakeholders following concerns of anticompetitive conduct. The Code seeks to promote transformation and foster inclusive growth in the automotive industry.

The main outcomes of the Code include the increased involvement of small Historically Disadvantaged Individuals (HDI) service providers in the industry in in-warranty autobody repair work, service and maintenance work of in-warranty vehicles and original-equipment manufacturer (OEM) dealership ownership.

The Code also proposes:

  • the use of equal matching spare parts, in addition to OEM and identical parts, in the repair of motor vehicles; 
  • the removal of OEM restrictions in the sale and distribution of parts by retailers whether OEM-approved or independent; 
  • more price and product options for consumers in the sale of parts; and
  • consumer education and awareness of costs entailed in the purchase of a motor vehicle.
  • the SAIA consulted with its members by way of two workshops and also invited written comments from members in order to compile an industry submission to the Commission.

SAIA supports the objectives of the code however highlighted to the Commission some practical challenges and concerns that must be considered to ensure a successful outcome.

For more information contact:
Easvarie Naidoo, SAIA Legal Manager
Easvarie@saia.co.za