A consideration of the guidelines for competition in the South African automotive aftermarket: how do they impact supply chain liability?
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Date
2020
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Abstract
The South African automotive aftermarket consists of various role players: Original
Equipment Manufacturers, original equipment suppliers, approved dealers, Original
Equipment Manufacturer approved motor-body repairers, insurers, insurer approved
motor-body repairers and Independent Service Providers. Due to the use of franchise
agreements and exclusive arrangements between Original Equipment Manufacturers
and approved motor-body repairers, participation in the automotive aftermarket has
generally excluded Independent Service Providers.
This has led to Independent Service Providers, particularly those who are Historically
Disadvantaged Persons, and consumers to make complaints to the Competition
Commission over the last ten years. These complaints have centred on the exclusion
of Independent Service Providers from participation in the automotive aftermarket and
their lack of access to original spare parts. The effect of these restrictive practices has
been to limit consumer choice and expose them to the high prices of original spare
parts in the automotive aftermarket, in breach of the provisions of the Competition Act
89 of 1998.
This Act regulates competition in South Africa and aims, amongst other goals, to
provide consumers with choice as to service provider, ensure competitive pricing, and
expand the spread of ownership in markets. The Competition Commission, as an
administrative body created to ensure compliance with the Act, is empowered by
s 79(1) thereof to indicate its policy stance on any matter falling within the ambit of the
Act. In line with s 79(1), the Competition Commission has published the Guidelines for
Competition in the South African Automotive Aftermarket.
The publication of the guidelines led to two questions which are the focus of this study:
firstly, what impact will these guidelines have on supply chain liability in the automotive
aftermarket during the in-warranty period and secondly, whether this impact will be to
the benefit of consumers. In order to answer these questions, this study considers
automotive supply chain liability before the publication of the Guidelines for
Competition in the South African Automotive Aftermarket, the role of the Competition Commission and its authority to publish these guidelines, the provisions of these
guidelines and their impact on supply chain liability during the in-warranty period.
Description
Masters Degree. University of KwaZulu-Natal, Durban.