The current structure of the Motor Body Repair (MBR) sector in South Africa is poised to change dramatically, says Richard Green, National Director of the South African Motor Body Repairers’ Association (SAMBRA), a proud association of the Retail Motor Industry Organisation (RMI).
Over the last three decades there have been a number of factors which have impacted negatively on the profitability and sustainability of repairers.
Insurers and manufacturers have largely dictated where repairs can be carried out. Motor manufacturers have dictated how approved MBR facilities should look and most insurers have historically supported the manufacturer-approval systems and enforced the allocation of work within warranty to only approved facilities.
Green says for the MBR sector, this has led to substantially increased costs to accommodate extravagant facility upgrades, whilst duplication of cost in equipment requirements from various manufacturers, has further deteriorated profit margins of repairers who cannot recover these costs from insurers. It has also potentially increased the cost of repairs to the consumer.
Additional financial pressure has also come from insurers who, over the last five years, have streamlined their administrative support systems by transferring this function to the repairers without the requisite compensation.
The industry is due for an overhaul.
“Every economic environment has tipping points and I believe the formal MBR sector has reached its tipping point and is about to enter a disruptive phase,” says Green. “There is no doubt that the industry is ready and it is high time manufacturer-approval systems be opened to all MBRs who achieve the accreditation criteria set by manufacturers.”
If restriction on insurer supplier listings can be removed and rather base selection on adherence to a list of base criteria, as advocated in the draft Automotive Industry Code of Conduct, the market will be able to open up significantly and consumers will be able to choose where their vehicle is repaired post-accident.”
The upside of this is the substantial anticipated increase in smaller MBR businesses in South Africa.
Looking forward Green sees SAMBRA playing a much greater role in consumer education and the maintenance of post-repair quality audits to ensure clients rights to good quality repairs are maintained and manufacturers and their appointed dealers are not prejudiced.
“While we realise this new environment will not be without its challenges, it will ensure consumers are free to choose their own service provider and MBRs can finally compete on an even playing field without protectionist barriers of any sort,” says Green. “We will start to see new MBR entrants being able to enter the sector without being unfairly precluded and manufacturers and insurers will be able to limit their liability.
“The ultimate winner is the consumer who can expect a substantial increase in service levels and far more competitive offerings from short term motor insurers as well as manufacturers and their appointed repairers,” concludes Green.