Attention: Mr. Mziwodumo Rubushe

Transcription

1 TOYOTA SOUTH AFRICA MOTORS (PTY) LTD PO Box 481 Bergvlei 2012, Gauteng, South Africa Tel +27 (0) Fax +27 (0) The Commissioner Competition Commission Mulayo Building DTI Campus 77 Meintjies Street Sunnyside Pretoria 0002 Attention: Mr. Mziwodumo Rubushe Dear Commissioner RE: DRAFT CODE OF CONDUCT FOR COMPETITION IN THE SOUTH AFRICAN AUTOMOTIVE INDUSTRY VEHICLE REPAIR AND SERVICING AND PARTS SUPPLY The call for submissions dated 22 September 2017 refers. Toyota South Africa Motors welcomes the opportunity to comment on the draft code of conduct for the automotive industry. While we support the Competition Commission s noble intention to promote a transformed and inclusive automotive industry, we have reservations about some of the proposals that we believe will do more harm than good to the industry. Transformation Toyota South Africa Motors (TSAM) realises the need to transform the industry and fully supports the commissions objective of transforming the automotive industry in South Africa. As such TSAM has begun the process of formulating strategies that will ensure that all new Toyota dealerships will be at least 51% black owned, in addition, TSAM will launch satellite dealers, owned and controlled by previously disadvantaged individuals, satellite dealers will service smaller areas with potential. Depending on demand factors, satellite dealers will generally offer a combination of parts sales and service, used vehicle sales, or new vehicle sales. TSAM is aware of the importance of the minibus taxi industry to the economy of South Africa, therefore, in addition to satellite dealers, the strategy will also include stand-alone Taxi dealerships, this is a new concept and is currently under investigation. Reg. No. 1961/001767/07 Waste Tyre Regulations, 2009 Registration Number: TPREG0031GAU Chairman, President & CEO: A Kirby, Executive Vice-Presidents: M Iida#. Directors : D Finch, C Hamman, K Kato#, H Kosaka#, M Minai#, S Moodley, Y Takeshita#, H Tsumori#, N Ward. Secretary: Toyota South Africa (Pty) Ltd represented by Ms PC Reddy. #Japanese 07/2017

2 Removal of Barriers to Entry & Counter Anti-Competitive Behaviour The insinuation that the automotive aftermarket industry is uncompetitive is not correct and cannot be based on any credible data, South Africa s automotive aftermarket is a fiercely competitive industry, approximately two thirds of Toyota s Units in Operation are no longer covered by the manufacturer s warranty giving independent repairers ample opportunity to participate in the servicing and repair of these vehicles that no longer enjoy the Toyota complimentary service plan or are no longer covered by the manufacturer warranty. The removal of restrictions on the provision of maintenance and service work of vehicles whilst covered by the manufacturer s warranty would be counterproductive and undermine the progress of the automotive industry in providing employment and much needed skills development. Furthermore there is need to recognise and protect facilities and current investment in dealerships as well as protection of the Toyota brand that has been built through amongst other things, the quality of dealership facilities and equipment. SALE OF MOTOR VEHICLES The number of Toyota dealers in a specific geographic area is based on a number of factors including the economic viability of the dealer. TSAM fully supports the promotion of the ownership of dealers by HDI s and is actively formulating strategies to support this position. The high standards of the facilities in all Toyota dealers must be maintained, it is these standards that have given Toyota the reputation of quality and reliability. TSAM cannot allow Quality / Standards / Brand Image to be compromised by lowering dealership standards. MAINTENANCE, SERVICE AND REPAIR WORK TSAM welcomes customer choice, however, warranty repairs are undertaken to return a vehicle to the manufacturers original specification, therefore only parts approved by the manufacturer are to be used. This has significant implications on the safety and satisfaction of Toyota s customers. Toyota South Africa Motors cannot warrant work carried out on Toyota vehicles outside of the Toyota approved network. The Competition Commission correctly states in its definition of warranty that the OEM will replace or repair a component or part that malfunctions or suffers a factory defect. TSAM cannot authorize warranty work or pay for repairs to Toyota vehicles outside the Toyota network to repair manufacturing defects.

3 Services plans are complimentary and provide sustainability of investments & protection of jobs in the dealer network, they protect Toyota s customers against inflationary increases, reduce the customers total cost of ownership, and provide assurance to Toyota s customers that their vehicles will be kept in good running condition at little or no future cost. Additionally TSAM is concerned that the Competition Commission has not fully considered the intricacies and complexity around establishing the cause of failure of a part or component. The use of parts of matching quality during the warranty period opens the door to dispute in the event of consequential damage. ACCESS TO TECHNICAL MAINTENANCE INFORMATION TSAM currently charges a fee to Toyota dealerships for access to technical maintenance information, this fee would also apply to any 3 rd party repairer wishing to perform maintenance or repair work to a Toyota vehicle. Access to diagnostic troubleshooting software also attracts a fee to Toyota dealers, this fee would also be applicable to any 3 rd party repairer. There is no basis for offering free of charge either the technical maintenance information or the diagnostic troubleshooting software. Furthermore, TSAM cannot release to any 3 rd party any vehicle technical information relating to the security systems or safety systems of any Toyota vehicle. PARTS AND ACCESSORIES The purpose of the vehicle warranty is to return the vehicle to the manufacturer s specification in the event of a manufacturing defect or a malfunction during the warranty cover period. The use of parts of matching quality that have not been approved by the manufacturer will not return a vehicle to the manufacturers specification, therefore, TSAM cannot accept that parts of matching quality be used by Toyota dealers for warranty repair work. TSAM does not agree with the notion that the SABS has the capacity to test and approve parts of matching quality as fit for use in Toyota vehicles, further TSAM does not have the engineering specifications of parts, these are the property of the designer of the part. TRAINING TSAM demands that any technician that performs any work on any Toyota vehicle is appropriately trained. Toyota dealers are required to send their technicians to the Toyota Academy for training, technicians receive certificates and are required to re-certify periodically.

4 Toyota disagrees with the proposal that on the basis of training received from Toyota, independent repairers will be allowed to undertake repair work while a vehicle is covered by the manufacturer s warranty or service plan. Any repair or service done outside the Toyota network at any time in the life of a vehicle is done at the customer s risk. Furthermore, TSAM is concerned that certificates can be easily abused to convince the public that technicians are fully trained, customer safety must be the priority. The Competition Commission must fully consider the impact of independent repairers displaying fraudulent certificates. Alignment to the South African Automotive Master Plan In its current form the proposed code of conduct will erode the progress that the Automotive Industry has made and are in direct conflict with the objectives of the South African Automotive Master Plan and the post 2020 APDP. To ensure future sustainability of the automotive Industry, Government and Industry have embarked on various programmes including the APDP and the South African Automotive Mater Plan (SAAMP). These initiatives have been established to create a platform to drive industry competitiveness to enable future growth and achieve the challenging targets set by the SAAMP. The SAAMP advocates for an increase in the competitive levels of the motor industry to that of leading international competitors, the competition commission must align any initiatives to the SAAMP. Conclusion TSAM is committed to the growth of the automotive industry in South Africa and the growth of the South African economy as a whole. Of importance is the necessity for a Code to Take into Account the Following: - The practicalities attaching to the conduct of business within the automotive industry; - The common law and contractual obligations attaching to the OEMs/Importers; - Existing legislative enactments regulating the conduct by the OEMs/Importers of their operations; - The impact of the provisions upon the rights and/or obligations of third parties.

5 The manner and extent to which the Code impacts upon the role players should consider key issues such as product liability, safety, contractual relationships with parent companies and obligations of the parties to uphold the integrity of warranties remain critical factors where the interests of the role players must be protected. We would welcome the opportunity to have an audience with you further to clarify our position in greater detail as well as to understand the position of the Competition Commission and the way forward on this matter. Toyota South Africa Motors (Pty) Ltd