The Collision Repairers Association (CRA) has submitted an application to the Competition Commission, seeking permission for its members to discuss and agree on rates, prices, and terms that are sustainable for the industry. The association represents about 169 motor body repairers, structural repairers, and panel beaters across the country. The CRA warns that the industry risks collapse if it is not granted the relief it seeks.
The exemption sought by the CRA aims to ensure that insurers and original equipment manufacturers (OEMs) allocate work fairly among auto body repairers. The association wants its members to collectively identify insurers that offer reasonable rates and terms, which would then serve as base rates for the industry. This move is necessary due to the increasing complexity of vehicle repairs, which requires specialised tooling, diagnostic equipment, and technician training.
The CRA attributes the need for an exemption to the surge in sales of Chinese and Indian vehicle brands in South Africa. The country's leading dealerships, including Motus, have reported a significant increase in sales of these vehicles, which require more complex and costly repairs. The CRA argues that the current insurer procurement practices are unfair and threaten the long-term sustainability of the independent collision repair sector.
The South African automotive aftermarket and repair industry is a significant economic pillar, estimated to be worth over R106bn. The CRA believes that balanced engagement with insurers is necessary to ensure that independent repairers remain financially viable, maintain industry capacity, and uphold consumer safety standards. The association's application seeks to address the bargaining imbalances that disproportionately affect smaller businesses.
The increased costs and investment requirements for repairing modern vehicles have imposed significant financial and operational pressures on collision repairers, particularly small businesses. The CRA's application reads that these developments necessitate commercially sustainable repair frameworks that adequately compensate repairers for the costs associated with repairing increasingly sophisticated vehicles.
The reputation of Chinese brands was recently tarnished when Chery Group SA issued a precautionary vehicle recall affecting 23,667 vehicles due to potential safety defects. The recall highlights the importance of ensuring that repairers are adequately compensated for their work to maintain consumer safety standards. The CRA's application aims to promote a sustainable and fair industry that benefits both repairers and consumers.
The Competition Commission will review the CRA's application and determine whether to grant the exemption. If approved, the exemption would allow auto repairers to collectively negotiate prices with insurers and OEMs, potentially ensuring a more sustainable and equitable industry. The outcome will have significant implications for the automotive aftermarket and repair industry in South Africa.
Key points
- The Collision Repairers Association seeks an exemption from competition laws to collectively negotiate prices with insurers and original equipment manufacturers.
- The industry faces significant financial and operational pressures due to the increasing complexity of vehicle repairs and the surge in sales of Chinese and Indian vehicle brands.
- The exemption aims to promote a sustainable and fair industry that benefits both repairers and consumers.
