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SEPTEMBER 2017

IN DEFENCE OF DIESEL A fuel worth fighting for?

INDUSTRY

GUD Holdings acquires Holts

AUTOMECHANIKA JOHANNESBURG 2017 New format trade fair is set for lift-off

REMANUFACTURING GAINS TRACTION Popularity grows for replacement parts

FRANCHISING IN SA

Growth despite the economic downturn SADFIA: LEADING THE WAY IN DIESEL TECH RMI UPDATE: PARTINFORM VISITS PORT SHEPSTONE; NIEMAND TAKES www.automobil.co.za OVER MIWA REIGNS; GUD ACQUIRES HOLTS; MOTOR DEALERS UNDER INCREASING PRESSURE; SEE NASCAR IN BELGIUM

SEPTEMBER 2017

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www.automobil.co.za


CONTENTS – SEPTEMBER 2017 COLUMNS

P30

5 Driver’s Seat: Jakkie Olivier, CEO of the RMI 7 Editor’s Letter: Wynter Murdoch 9 Hot Stuff! New product showcase 60 Frequently Asked Questions: Answers from RMI experts 66 Tailpiece: Diesel under the microscope UPDATES 12 News 30 SADFIA to the fore

Editor: Wynter Murdoch wynter@thefuture.co.za

Sub-editor: Peggy Lendrum peggy@thefuture.co.za Design and layout: Heinz Bawa heinz@thefuture.co.za

P42

34

RMI Review

Partinform wows Port Shepstone; Niemand takes over MIWA reigns; GUD acquires Holts; Motor dealers under increasing pressure; See NASCAR in Belgium

Reporters: Ryan de Smidt ryan@thefuture.co.za

COVER STORY

Reuben Van Niekerk reuben@thefuture.co.za Publisher: Richard Lendrum richard@thefuture.co.za Production: Mabel Ramafoko mabel@thefuture.co.za

While there has been an increase in the number of franchises operating in South Africa, lack of economic growth during 2016 has affected turnover – and it appears to be taking longer for start-ups to break even

28

Corolla production under consideration?

The assembly line used to build one of SA’s motoring icons, the Toyota Corolla, is operating at barely 20% capacity. The company’s CEO, Andrew Kirby, says ways are being investigated to fill the hole

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P66

Automobil is the official journal of the Retail Motor Industry Organisation (RMI) which hosts 13 constituent associations: ACRA (component remanufacturers); ERA (engine re-builders and automotive engineers); MDA (motorcycle, scooter, quad and jet-ski/outboard engine dealers); MIMA (Motor Industry Manufacturers’ Association); MIWA (the full spectrum of workshop operators); MPEA (wholesale and retail part dealers); NADA (new and used car and truck dealers); VTA (vehicle testing); SADFIA (diesel pumproom operators); SAPRA (Fuel resellers, convenience store and car wash operators); SAMBRA (collision repairers and automotive refinishers); SAVABA (vehicle body builders) and TDAFA (tyre dealers and fitment centres).

Automobil is available to purchase from the publishers at R25 a copy. Automobil is produced and published monthly by Future Publishing (Pty) Ltd for the Retail Motor Industry Organisation. The views and opinions expressed in the publication are not necessarily those of the publishers or the Retail Motor Industry Organistion. While precautions have been taken to ensure the accuracy of advice and information contained in editorial and advertisements, neither the publishers nor the Retail Motor Industry Organisation can accept responsibility for errors, misrepresentations or omissions, or for any effect or consequence arising therefrom. Permission to republish any article or image or part thereof must be obtained in writing from the publishers.

www.automobil.co.za

Franchising

FEATURES

RMI Automobil’s Editorial Sub-Committee: Chairman: John Ellmore; Gary McCraw, Gideon de Klerk, Denice Grobler, Danelle Van Der Merwe, Wynter Murdoch, Greg Surgeon, Jakkie Olivier, Jan Schoeman

© Future Publishing (Pty) Ltd

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P46

Advertising Sales Executives: Enver Lawangi, Greg Surgeon, enver@thefuture.co.za greg@thefuture.co.za Future Publishing (Pty) Ltd 247 Jan Smuts Avenue, Dunkeld West, Johannesburg PO Box 3355, Rivonia, 2128 Tel: +27 (11) 803-2040

SADFIA is a small, highly specialised sector of the motor industry whose main function is the repair and servicing of diesel fuel injection systems

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Get set for Automechanika

Automechanika Johannesburg will strongly feature trucks, transport and logistics when the new format aftermarket trade show gets underway on September 27

Speak with one voice

merSETA calls for national consensus in dealing with challenges associated with what it describes as the inexorable march of technology

In quest of quality

The past decades have seen major changes in the type of quality control measures introduced by the auto industry

Innovative TRW tech cuts stopping distances

An advanced silicate coating applied to friction material of replacement

50

Remanufacturing gains traction

Locally remanufactured replacement parts are becoming popular as quality assured, cost effective alternatives to new parts

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58

brake pads has been shown to cut stopping distances of vehicles

Understanding lease agreements

Whether you are a landlord or a tenant, make sure that the lease agreements you sign comply with South African law

Adapting to change

How do small and medium sized business owners respond to challenges that technological as well as other developments appear to be forcing on them?

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BENEFITS OF BELONGING A short summary of the benefits of RMI membership

The RMI has represented the retail motor industry and its members for more than 100 years. With more than 7 500 member businesses, our unity is our strength. RMI representation at often volatile and disruptive centralised wage negotiations. Professional industrial relations advice by expert specialists, ensuring procedural and substantive fairness when disciplining staff. Industry labour relations seminars focused on the rules, agreements and industry-specific topics that affect retail motor industry businesses. Chairing of disciplinary hearings and AUTOMATIC entry and representation at the CCMA, DRC and Labour Court. Representation at various MIBCO and Industry-related Boards and committee structures.

Affiliation to reputable organisations recognised by Government, big business, consumers and relevant stakeholders like Business Unity SA (BUSA). Protection against one-sided legislative changes or new laws and regulations. Exceptional CPA support and member assistance during defence cases at the National Consumer Commission (NCC) and the Motor Industry Ombudsman of South Africa (MIOSA). Facilitation of a business-to-business complaint where both parties are RMI members, with a complaint resolution rate in excess of 95%. Quality and Standards function – representing the retail industry at various South African Bureau of Standards (SABS) committees and working groups. Representation at the National Regulator for Compulsory Specifications (NRCS), defending our industry when compulsory specifications and standards are compromised.

The informative Automobil magazine and weekly web letters that facilitate two-way communication and create consumer and industry awareness. The RMI is regularly invited to comment on industry topics by both print and broadcast media, and participates in and hosts numerous conventions and shows. Associational accreditation ensures ongoing development and implementation of commercial value propositions specific to the association. Training needs and representation via merSETA and W&RSETA. We actively drive industry-wide training and apprenticeship issues through our position on the merSETA Board and our involvement with the Technica manuals. Representation at the Moto Health Care Fund, Industry Provident Funds and the Sick, Accident and Maternity Pay Fund. The RMI offers industry-specific products like RMI4BEE / RMI4LAW / RMI4OHS /RMI4SURE.

Need to get hold of the RMI? Turn to Page 8 of this issue for all the contact details

4 SEPTEMBER 2017

www.automobil.co.za


DRIVER’S SEAT

Evolve or stagnate – the choice is yours Jakkie Olivier, CEO of the RMI, explains the many ways in which the Organisation can help small businesses in the automotive aftermarket take care of challenges and ease burdens

A

lbert Einstein’s definition of insanity is to continue doing the same thing over and over again expecting different results. Consider the many challenges that plague any of South Africa’s small businesses – various pieces of legislation that need to be dissected and complied with; where to place resources to remain compliant; training employees and following daunting procedures to claim back training grants or access funding; and finding the time to properly administer myriad issues that arise daily to maintain a profitable enterprise. In contrast to many big companies which have paid resources at their disposal to cope with the tasks, most small businesses do not have the time or reserves available to deal with such matters effectively. The good news, however, is that small businesses in the automotive aftermarket have the RMI on their side to take care of challenges and ease burdens. One of the aims of the Organisation is to help small business owners attain their goals with limited effort so that they can focus on running cost-effective, profitable operations.

All it requires from members to make the most of the RMI’s membership benefits is to attend sector-specific meetings aimed at shaping the future of small business. That doesn’t mean weekly or even monthly meetings – it simply means attending regular sessions to get involved and make your voice heard. The RMI and its 13 constituent associations are currently hosting Annual General Meetings around the country, which are focused on the interests of member businesses. Decisions that are made at these meetings will determine, in more ways than one, the future of your business. Much has been written recently about the Competition Commission's investigation into restrictive business practices in South Africa and barriers to entry. This includes the automotive sector and the RMI and its affected associations are actively participating in the process to ensure that the Automotive Industry Code of Conduct, which is being drafted in terms of the Consumer Protection Act, includes vital input from RMI members with a view to safeguarding the best outcome for the industry.

Previously, I’ve explained details of the RMI’s New Thinking Model, where we provide a focussed, association-specific value offering to our members. We are convinced that the plan will revolutionise the benefits that RMI members enjoy. It’s critical for members to understand the benefits associated with this change and how they can influence the future of the industry. Apathy and non-participation by members in associational and organisational events is a common trend, yet it has been shown over and over again that members who attend meetings and actively participate in the affairs of the Organisation are better off, better equipped for ongoing business challenges, are at the forefront of innovation and developments and are the first to reap the benefits of belonging. We appeal to all to support the RMI by making your voice heard to experience the real value of belonging – invest your time so that you can improve and enhance your future.

For information on the RMI and its workings, visit www.rmi.org.za or call 011 886 6300

www.automobil.co.za

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CONSTITUENT ASSOCIATIONS Who do they represent and what are their objectives?

T

he RMI is a proactive, relevant, retail and associated motor industry organisation recognised as the leading voice in South Africa’s automotive aftermarket, serving the daily needs of its members and playing a key role in enabling motor traders to deliver top class service to motoring consumers. Here are the associations which fall under its umbrella… ACRA (Automotive Component Remanufacturers’ Association) ACRA represents component remanufacturers involved in the remanufacture of safety-critical components and radiators, an ever-growing industry in which keeping abreast of change is crucial for business owners. ERA (Engine Remanufacturers’ Association) ERA represents motor engineers who re-machine, rebuild and remanufacture engines in South Africa. ERA members promote the reuse of engines, parts and components in a manner that is green and sustainable. ERA members create employment and skills development opportunities, directly in their own machine shops and indirectly through suppliers to the industry and component manufacturers. MDA (Motorcycle Dealers’ Association) MDA represents members who are motorcycle dealers – these members benefit from an extensive array of value-add services and products such as commercial insurance, labour legal assistance and representation, consumer dispute resolution, and a strong relationship with the Association of Motorcycle Importers and Distributors. MIMA (Motor Industry Manufacturers’ Association) MIMA members are Parts, Equipment and Component Manufacturers and suppliers to Original Equipment Manufacturers and the automotive aftermarket that exports into Africa and other countries in the world. MIWA (Motor Industry Workshop Association) MIWA, the largest association within the RMI, strives to keep its members informed about the ever-changing auto repair industry, thereby ensuring that vehicles are repaired to acceptable standards designed to make them perform better and safely on South African roads. MPEA (Motor Parts and Equipment Association) MPEA represents South Africa’s auto part traders, including wholesalers, retailers and independent operators in the replacement motor parts industry. Genuine replacement parts are available at accredited MPEA spares outlets at affordable prices, backed by the manufacturer’s warranty. NADA (National Automobile Dealers’ Association) NADA represents the interests of business people who own or operate new vehicle franchise dealerships and qualifying used vehicle outlets. NADA is committed to the image enhancement of the retail motor business, facilitating the interface between dealers and OEMs/distributors, building relationships between dealers and customers and bringing relevant industry issues to the attention of government.

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TA

Vehicle Testing Association

VTA (Vehicle Testing Association) The VTA represents private vehicle testing stations that are committed to operating within the law in accordance with the Road Traffic Act and the relevant SANS standards. In this highly regulated environment, the association represents the interests of its members at government working groups and is committed to enhancing the reputation of the industry in all the spheres. SADFIA (South African Diesel Fuel Injection Association) SADFIA members operate fully equipped pump rooms aimed at providing cost-effective service solutions for owners of diesel powered vehicles seeking fuel injection system testing, repair or replacement. SAMBRA (South African Motor Body Repairers’ Association) SAMBRA is an active leader in the motor body repair industry and consolidates, communicates and regulates repair standards in the motor body repair industry. SAMBRA ensures the provision of technical and business skills training that meets the demands of the industry and instils confidence in consumers and industry stakeholders. SAPRA (South African Petroleum Retailers’ Association) SAPRA represents and promotes the interests of petroleum retailers in South Africa and fosters strong relationships with the Department of Energy, oil companies, banks, financial institutions and other stakeholders that have an impact on the sustainability of the service station industry. SAVABA (South African Vehicle and Bodybuilders’ Association) SAVABA members are professional, certified and regulated vehicle body builders in South Africa who manufacture commercial vehicle body applications (tanker, coal, refrigerated trucks and trailers) and bus bodies (commuter and tourist type). Members manufacture using the latest equipment and highly trained staff to ensure strict compliance with SABS standards and other legal specifications. TDAFA (Tyre Dealers' and Fitment Association) The TDAFA is the only representative body for tyre dealers nationally. The association works on all issues relevant to tyres and the fitment industry. Strategically, the TDAFA is positioned as an intermediary between government, the tyre industry and consumers and is recognised by government and industry leaders as the legitimate voice representing tyre dealers. RMI contact details Head Office: 011-886-6300 | www.rmi.org.za Surrey Square Office Park, 330 Surrey Avenue, Ferndale, Randburg, 2194 Rmi Regional Offices: Highveld: Randburg: 011-886-6300; Northern: Pretoria: 012-348-9311; KwaZulu-Natal: Durban: 031-266-7031; Eastern Cape/Border: Port Elizabeth: 041-364-0070; Western Cape: Cape Town: 021-939-9440; Free State/Northern Cape: Bloemfontein: 051-430-3294

www.automobil.co.za


GM withdraws, Isuzu moves in

A

s this month’s edition of Automobil was about to go to print, General Motors announced that Ian Nicholls, president and managing director of the US company’s business units in sub-Saharan Africa, had been appointed head of its Chevrolet brand in Southeast Asia. Though Nicholls will continue to oversee the withdrawal of General Motors from South Africa, he took up the reigns in his new job – which encompasses markets in Thailand, Indonesia and Vietnam – at the beginning of the month, based in an office in Bangkok. There he reports to Stefan Jacoby, one of GM’s executive vice presidents and president of GM International. “Southeast Asia is a focus of GM,” said Jacoby. “Chevrolet has been able to develop a strong image in the region

as an American brand, and we are seeing continuous sales growth in key emerging markets such as Vietnam. “With Ian overseeing the region, we will continue to transform our business by simplifying our structures to support the growth of Chevrolet and garner greater efficiencies.” With Nicholls gone, day-to-day management of GM South Africa falls to Michael Sacke, who has been appointed Chief Operations Officer in addition to his duties as Chief Financial Officer. Sacke will manage the day-to-day operations of the company through its transitional period, with GM scheduled to close its doors locally in December. It will then vacate its Struandale premises in Port Elizabeth to make way for Japanese manufacturer

EDITOR’S LETTER

Isuzu, which has bought the plant. Except Sacke won’t go, since in January he will become Chief Executive Officer and Managing Director of Isuzu Motors South Africa, where he will lead the team that will manage the brand’s first market outside of Japan in which it has total ownership of manufacturing and distribution operations. In that role he will report to Tokyo-based Haruyasu Tanishige who, in addition to his current role of Senior Executive officer for the Sales Division of Isuzu Motors in Japan, will be appointed to the position of Chairman of Isuzu Motors South Africa. Wynter Murdoch Editor

Head Office: Tel: (011) 466 6619 Fax: (011) 466 1034 Address: 40 Monte Carlo Crescent, Kyalami Business Park Durban: Tel: (031) 569 4141 Fax: (031) 569 2506 Address: Unit 7 Constantia Park, Chris Hani Road, Redhill, 1415 Cape Town: Tel: (021) 552 5569 Fax: (021) 552 5584 Address: Unit 2, 14 Esso Road, Montague Gardens, Cape Town Web Site: www.eurospares.co.za E mail: accounts@eurospares.co.za

www.automobil.co.za

SEPTEMBER 2017

7


NEWS

SPEAK TO US RMI EXECUTIVES

RMI PARTNERS

 hief Executive Officer: C Jakkie Olivier jakkie.olivier@rmi.org.za

RMI4Sure 0860-104-202 RMI4Law 0861-668-677 RMI4BEE 0861-764-233 RMI4OHS 012-998-7139

Chief Operations Officer: Jan Schoeman jan.schoeman@rmi.org.za Financial Director: Renee Coetsee renee.coetsee@rmi.org.za Company Secretary: Gary McCraw gary.mccraw@rmi.org.za

RMI BOARD MEMBERS

Jeánne Esterhuizen (President) Barry Canning (Vice-President) Ferose Oaten Jakkie Olivier Bruce Allen Lindsay Bouchier

DIRECTORS MIWA Pieter Niemand pieter.niemand@rmi.org.za NADA, MDA Gary McCraw gary.mccraw@rmi.org.za VTA Joy Oldale joy.oldale@rmi.org.za SAMBRA, SAVABA Edwin Martin edwin.martin@rmi.org.za

RMI REGIONAL OFFICES

Danelle van der Merwe Brand and Communication Manager danelle.vandermerwe@rmi.org.za

Highveld: Randburg: 011-886-6300

Julian Pillay Regulatory Compliance Manager julian.pillay@rmi.org.za 011-886-6300 | www.rmi.org.za Surrey Square Office Park 330 Surrey Avenue Ferndale Randburg 2194

8 - MAY 2015

TRAINING Louis van Huyssteen louis.vanhuyssteen@rmi.org.za SADFIA, ACRA, ERA Attie Serfontein attie.serfontein@rmi.org.za TRANSFORMATION Joy Oldale joy.oldale@rmi.org.za

Facebook.com/AutomobilSA

SAPRA Vishal Premlall vishal.premlall@rmi.org.za

RMI HEAD RMI HEADOFFICE OFFICE

Neo Bokaba HR Manager neo.bokaba@rmi.org.za

TDAFA, MPEA, MIMA Hedley Judd hedley.judd@rmi.org.za

@AutomobilSA

Northern: Pretoria: 012-348-9311 KwaZulu-Natal: Durban: 031-266-7031 Eastern Cape/Border: Port Elizabeth: 041-364-0070

www.rmi.org.za

Western Cape: Cape Town: 021-939-9440 Free State/Northern Cape: Bloemfontein: 051-430-3294

TA

Vehicle Testing Association

www.automobil.co.za


HOT STUFF Ray-Ban teams up with Ferrari

NEW PRODUCTS

The perfume of speed Many motorsport enthusiasts are likely to have heard about the great and famous aroma associated with Castrol R – the perfume of speed as it was once described. Used in two- and four-stroke engines in pre- and post-war years, the oil was as much revered for its smell as for its lubricating properties. “We’ve had so many calls to bring back the original Castrol R – the very same oil that was so popular all those years ago,” says Giovanni Schule, spokesman for SA Wholesale Import & Exports, official agents for Castrol Classic.

Wear the look of a champion! Ray-Ban has teamed up with Ferrari to offer of variety of different sunglass styles adorned with the legendary Italian brand’s Prancing Horse motif. From original Aviators and Wayfarers to the striking Scuderia Ferrari RB 4228M, the glasses encompass steel or carbon fibre frames, classic green, crystal or mirror lenses and include Ferrari red or yellow detailing on temples and nose pads. For information log on to https://onlinestore.ferrari.com

www.automobil.co.za

He’s committed to a large order of Castrol R 40 SAE 40 4T Racing Engine Oil and limited stocks are available. The oil is castor based – hence its distinctive aroma – and can be used for classic car or motorcycle applications. It is said to offer superior oiliness compared with mineral oils. According to Schule, it is used in racing engines, gearboxes and as a two-stroke mix. “Castrol R40 provides the ultimate in lubrication for both car and motorcycle engines under race conditions. It offers the best possible performance coupled with reliability and safety at ultra-high engine speeds and temperatures,” he says. For information call Giovanni on 011 465 8294 or 082 786 3044, or log on to www.castrolclassic.co.za

SEPTEMBER 2017 -

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YOU DO LIFE.

WE CARE FOR IT.

10 - SEPTEMBER 2017

www.automobil.co.za


WE KNOW WHAT’S IMPORTANT TO YOU… We have designed our options based on the needs of you, your family and staff members. After all, we are the scheme for the South African Retail Motor Industry.

Have you made the choice to join us yet? Visit our stand in Hall 6 at the Automechanica Show to discuss your healthcare needs.

0861 000 300

www.motohealthcare.org.za.

www.automobil.co.za

SEPTEMBER 2017 -

11


NEWS

BMW’s Ndebele art car for SA to paint interior panels for a BMW 7-Series. The vehicle was on display at the Frieze Art Fair which took place last year in London, with her original BMW 525i Art Car forming part of the exhibition – held at the British Museum – to highlight her role as a leading South African artist.

N

debele artist Esther Mahlangu was the first woman to create a BMW art car, turning a 525i sedan into a unique and colourful work on wheels. Twenty-six years later, she was once again commissioned by the BMW Group

BWW Group South Africa is now the proud owner of Esther’s specially commissioned panels, which have been installed in a 750Li Individual. The vehicle forms part of BMW Group South Africa’s Heritage Collection and will be displayed at arts and cultural events around the country.

Intel plans driverless vehicle tests The first vehicles will be deployed later this year in Arizona – where Uber and Waymo are already testing self-driving cars – with the area’s driverless fleet expected to grow to more than 100 vehicles before December.

W

ith its newly minted, $15,3-billion (about R203,96billion) acquisition of Israeli technology company Mobileye in hand, computer chip maker Intel announced last month that it is building a fleet of fully autonomous (Level 4) vehicles for testing in the US, Israel and Europe.

12 - SEPTEMBER 2017

Intel’s goal is to develop for production by 2021 autonomous-drive technology that can be deployed in any vehicle of any type no matter where in the world it is geographically located. To that end, the company’s initial trial fleet will include multiple car brands and vehicle types built around a core “car-to-cloud” system that combines Mobileye’s computer vision, sensing,

“I am so glad that BMW brought my art back to South Africa,” says Esther. “The car is beautiful and will be shared with the people of the country for many years to come.” According to Esther, the Ndebele patterns she used on the panels marry tradition to the essence of BMW. “When BMW sent me the panels to paint, I could see the design in my head. I started by painting the small ones first to get the feel of the surface and then it was easy as the design follows the lines of the panels.” Tim Abbott, CEO of BMW Group South Africa, says the company is delighted to share Esther’s legacy with the people of South Africa. “Esther embraces her traditional heritage passionately and has dedicated her entire life to the development and promotion of Ndebele art,” he says.

fusion and mapping competencies with Intel’s expertise in open compute platforms, data centre technologies and 5G communication. BMW and Fiat Chrysler are the first vehicle manufacturers to join the project, the former being a founder member and the latter revealing last month that it had become an active partner, with Waymo already using Chrysler vehicles in the trial. Auto suppliers Delphi and Continental are also part of the initiative. In a statement, Harald Krüger, BMW’s chairman, said the fact that Fiat Chrysler had become a partner in the alliance reinforced the path to successfully creating the most relevant, state-of-the-art, cross-OEM, Level 3 to 5 autonomous drive solutions on a global scale.

www.automobil.co.za


Suppliers warned on electrification

T

hreequarters of the world’s Top 100 automotive suppliers may not survive global industry disruption associated Paul Eichenberg with the electrification of vehicle powertrains unless they make plans now. So says Paul Eichenberg, an automotive strategy consultant with 25 years of experience working with Fortune 500 auto suppliers. “The years between 2020 and 2030 will be the decade of electrification, and if suppliers don’t develop an e-mobility strategy and make investments now to operate in that decade, they risk becoming road kill on the global automotive highway,” Eichenberg maintains. He says vehicle electrification is coming much faster than most industry analysts expect – being accelerated by increasing regulations to reduce CO2 emissions, ongoing battery technology and cost breakthroughs, and the diminishing opportunity to economically improve internal combustion engines. The former chief strategist for Magna Powertrain and Magna Electrification says unless suppliers rethink their approach and secure electronics and software competencies, few will succeed in the auto industry’s electrified future. “I’m afraid many auto supplier CEOs are so focused on operational optimisation and this quarter’s earnings that they are not seeing the future, so they are missing the opportunity presented by the disruptive force that will sweep the auto industry,” Eichenberg says.

www.automobil.co.za

Electrification technologies, he predicts, will affect almost all vehicles produced by 2030. In looking at the current automotive supply chain, he says many traditional auto suppliers are making strategic errors because they: • Lack an understanding of where the industry is going; • Are looking at the wrong time horizon and are waiting too long to focus on the coming of electrification; • Are betting on the past, investing in a dying portfolio of products, rather than the future; • Have the wrong organisational model with no electronics backbone, scale or platform; • Employ the staff with the wrong skill sets, or • Are seeking safe returns on deployed assets short-term instead of the high reward potential of transitioning to a digital future.

At Magna, Eichenberg helped the business to double revenues to $7-billion from 2006 to 2014. He says automakers in Europe are already focusing on technologies that will help them to meet the next regulatory hurdle for emissions – proposed Euro VII rules – which are expected to come into force between 2025 and 2030. He expects the radical focus shift will spread to manufacturers in China, North America and the rest of the world soon, opening up huge opportunities for suppliers who can provide the electric backbone for all major automotive systems, including batteries, electric drive motors and power electronics. On the flip side, he says the shift to e-mobility will jeopardise the longterm future of companies that supply components only for internal combustion driven vehicles..

Imperial buys UK dealer group

S

outh Africa’s Imperial Holdings has announced that it has bought UK-based automotive dealer group Pentagon Motor Holdings – Mark Lamberti, which operates CEO of Imperial 21 retail sites Holdings in Derbyshire, Nottinghamshire, Lincolnshire, Yorkshire and Manchester – for R493-million. In a statement, Imperial said its wholly owned vehicle division, Motus, had indirectly acquired all of the shares in Pentagon. The buy-out is effective from September 1. “Imperial has strong global partnerships with leading vehicle

manufacturers and we are delighted to expand our international retail footprint into the passenger and light commercial vehicle market in the UK through the acquisition of Pentagon by Motus,” said a statement issued by Imperial’s group chief executive, Mark Lamberti. The statement quoted Osman Arbee, CEO of Motus, as saying the acquisition was consistent with the company’s strategy to deploy capital and its vehicle retail expertise in pursuit of growth and returns beyond South Africa’s borders. Pentagon, established in Derbyshire in 1991 as a Vauxhall franchise, has grown across the UK to represent a number of leading car and light commercial vehicle manufacturers, among them Peugeot, Seat, Mazda, Kia, Renault, Fiat, Alfa Romeo, Nissan, Mitsubishi and Jeep.

SEPTEMBER 2017

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NEWS

Merc and Laureus celebrate Women’s Month

I

n honour of Women’s Month, Mercedes-Benz South Africa (MBSA) and the Laureus Sport for Good Foundation last month hosted a female-only panel during a breakfast at its Mercedes-Benz Lifestyle Centre in Bedfordview. Participants included Dr Phatho Zondi, CEO at Sport Science Institute of South Africa; Ntambi Ravele, Chairperson of Boxing SA; Deshun Deysel, world renowned mountaineer and Sanani Mangisa, a South African hockey player and Olympian. A number of powerful messages were expressed at the session, highlighting the roles that women play in leadership development.

MBSA is a patron of the Laureus Sport for Good Foundation, contributing to the initiative’s Youth Empowerment through Sport (YES) programme, which, over the years, has produced a number of young women leaders.

“Through this partnership, we aim to make a lasting contribution to the development of youth through sport; supporting positive social change in the communities where Laureus is active,” said Nadia Trimmel, Vice-President of Mercedes-Benz Vans Southern Africa.

In defence of diesel

T

he head of Mercedes-Benz Cars and chairman of the Daimler group has vowed to “fight” for diesel following fresh allegations of collusion and diesel emissions cheating within the German vehicle industry.

The report suggested that Daimler was “counting on diesel” as it worked on improving its electric vehicle technology (and cutting its costs) in a bid to meet increasingly stringent emissions regulations.

A recent report in Automotive News suggested that German automakers had been working together to fix the prices of diesel emissions treatment systems for years, ultimately using systems that were not fit for purpose.

“We are convinced, like the rest of the car-making industry, that we are headed toward electric mobility,” Zetsche said. “Until that happens, further reductions in CO2 will be achieved through combustion engines, and here the diesel will play a significant role.”

The allegations come in the wake of the Volkswagen Group’s admission that it had installed cheat devices in some of its diesel powered cars and follows an announcement by governments in France and the UK that plans would be put in place to ban the sale of internal combustion engined vehicles by 2040 in a bid to cut pollution. “Diesel is worth fighting for,” said Dieter Zetsche quoted in a report in Automotive News.

14 - SEPTEMBER 2017

Zetsche refused to comment on the latest collusion allegations. “The car industry is currently causing headlines, and they’re not good ones. I know a lot of people want more clarity now, but we can’t comment on speculation.” Meanwhile, Japanese manufacturer Honda has joined Europe’s defence of diesel by announcing it will launch a new super-efficient 1,6-litre i-DTEC oil-burner for the British-built Civic range.

The engine, scheduled to be launched in March next year, is one of the first units to be officially tested under the Worldwide Harmonized Light Vehicle Test Procedure fuel consumption and emissions cycle, with Honda claiming fuel consumption figures of 3,7 litres/100km and emissions of 99g/km. The diesel powertrain has a new NOx Storage Converter system with larger catalysts and a higher content of noble metals – silver, platinum and neodymium – that store nitrogen-oxide gas until the regeneration cycle. A soot sensor detects when the regeneration cycle is required, extending exhaust component life. Assembled at Honda’s UK plant in Swindon, the engine will be available in variants of the 10th generation Civic. It will be coupled with nine-speed automatic transmission. For more on the diesel debate, see P66

www.automobil.co.za


Driven by

ANALYSES

Diagnostic Solutions from Bosch: BEA 750 www.automobil.co.za

www.bosch.co.za NOVEMBER 2017 -

15


Accolades for Conti

C

ontinental’s new PremiumContact 6 tyre for mid-range and luxury-class cars has received two internationally renowned design awards. The juries of both the IF Design Award 2017 and the red dot design award 2017 have recognised the tyre for its design qualities. Ulrich Behr, who was involved in developing the new PremiumContact 6, said: “We’re extremely pleased about both these awards. Your first thought when considering modern tyre design is usually directed at the tread pattern, an important aspect given that it has to meet ever-increasing expectations with regards to the safety, handling and comfort characteristics. “But the sidewall design also has an important part to play. Not only does it carry the information the consumer needs – most of which is required by law – but through its design language it also helps to give the tyre its own identity which, in turn, must align with the family look of the company’s various product lines.” The two design awards are among the world’s most prestigious industrial design accolades. They specifically reward design qualities that benefit the end user. In both cases the award winners are selected by a panel of independent international experts. The accolades are the latest for the PremiumContact 6. The tyre recently won AutoBild magazine’s tyre test with the shortest braking distances on wet and dry roads, beating 51 competitors. It was also awarded the Eco Champion title for its environmental performance.

16 SEPTEMBER 2017

GM and PSA finalise deal General Motors and Groupe PSA, manufacturer of Peugeot and Citroën, have announced the close of the sale of GM’s Opel/Vauxhall business to the French company. The deal is perceived as the latest and most significant in a series of actions GM has taken to strengthen its global enterprise and position itself for the future. “We’ve taken another bold step in our ongoing work to transform GM. The transaction allows us to sharply focus our resources on higher-return opportunities as we expand our technical and business leadership in the future of mobility,” said a statement released by company president Dan Ammann. In a separate statement, Carlos Tavares, Chairman of PSA, said the closing of the deal represented “the birth of a true European champion. We will assist Opel’s and Vauxhall’s return to profitability and aim to set new industry benchmarks together.” A statement released by Opel said the brand was planning a leaner management structure which would aim to unlock economies of scale and synergies with PSA regarding purchasing, manufacturing, research and development. The goal would be to generate a positive operational free cash flow by 2020 as well as an operating margin of two percent by 2020 and six percent by 2026.

Opel CEO Michael Lohscheller said the company would continue to make Made in Germany technology available across the globe. “The combination of our strengths will enable us to turn Opel and Vauxhall into a profitable and selffunded business. We have set ourselves the clear target of returning to profitability by 2020.” Opel announced a new management team, installing PSA executives Remi Girardon as head of manufacturing and Philippe de Rovira as new chief financial officer. “Opel and Vauxhall are committed to building a strategic plan with Groupe PSA’s support, aimed at re-establishing economic fundamentals. The Opel and Vauxhall teams will present this plan in 100 days and will ensure its execution,” Lohscheller said. Tavares said the performance plan would be carried out in parallel with PSA’s Push to Pass initiative. “The teams are focused on achieving the objectives. We have confidence in the momentum that these strategies will create, to the benefit of all stakeholders,” he said. Still to be concluded is the PSA Group’s acquisition of GM Financial’s European operation, which is subject to validation by different regulatory authorities and is planned for the second half of 2017.

www.automobil.co.za


JAGUAR XF

DYNAMIC, EVEN WHEN STILL.

One glimpse of the Jaguar XF and there’s no mistaking it for anything but a performance car. With its taut, athletic exterior made more pronounced by its beautiful curves and F-TYPE inspired design cues, the XF truly stands apart. Once you step inside, you’ll experience the contemporary style, exquisite craftsmanship and exceptional comfort that make XF so seductive. Distinctive lines. Dramatic beauty. No wonder XF turns heads, even when it’s stationary.

LOWER EMISSIONS From 114g/km CO 2 HIGHER FUEL ECONOMY Up to 4.3l/100km LOWER TOTAL COST OF OWNERSHIP 2 years or 34,000km

Contact your nearest Fleet & Business centre to arrange a test drive: Jaguar Centurion: Jaguar Bedfordview: Jaguar Umhlanga: Jaguar N1 City:

(012) 678 0044 (011) 621 6300 (013) 571 2620 (021) 595 7100

Jaguar Sandton: Jaguar The Glen: Jaguar Constantiaberg:

(011) 548 0500 (011) 682 5400 (021) 710 0900

jaguar.co.za/fleet-and-business

www.automobil.co.za

SEPTEMBER 2017

17


“The Multi-brand workshop”

AUTO CHECK CENTER

www.autocheckcenter.com

ACC is a full-service concept that does not limit the entrepreneurial freedom of the owner or operator. This franchise is highly individualistic, expressing unique approaches to vehicle servicing and repair. The ACC franchise brings a ready-made, tried and tested formula as a ‘conversion package’ for workshops catering to older-model vehicles. ACC has a streamlined business model equipped with strategic business tools and enterprise-wide assistance.

“A New Generation of Service”

AUTO CARE & DIAGNOSTICS

www.acdworkshop.co.za

Auto Care & Diagnostics (ACD) is a national network of independently owned workshops specialising in vehicle service, maintenance and repairs plus providing the latest in automotive diagnostic solutions, thereby catering for the changing needs of vehicle owners. ACD facilities are conveniently located and differentiate from competitors by providing first class customer care. The Franchise has a nationwide network of over 75 franchises and the ACD workshop group is contracted to major fleet and aftermarket warranty companies, as a preferred service provider in the field of vehicle maintenance.

“Trust the Diesel Specialists with your vehicle”

DIESEL FUEL INJECTION SPECIALISTS

www.adco.co.za

ADCO is a unique workshop franchise for diesel fuel injection specialists. The national footprint over 20 franchisees, offers a network of professional technicians specialising in diesel fuel injection and related services, ensuring guaranteed workmanship nationwide. ADCO outlets specialise in diesel pump sales and service, turbocharger sales, injector sales and service and diagnostics applicable to relative pump repair.

“The Battery Change Experts”

BATTERY EXPERTS

The Independent Battery outlets control 50% of the “Do it for me” battery market. The Battery Hub Franchise is a specialist battery outlet that is equipped to take advantage of this opportunity in the DIFM battery market. The battery Hub Franchise offer’s batteries’ in the passenger vehicle, heavy duty, marine, motorcycle and utility areas.

www.batteryhub.co.za “The Competent partner within the Automotive Air-conditioning industry”

AUTOMOTIVE AIR-CONDITIONING SPECIALISTS

18 SEPTEMBER 2017

Behr Hella Service has a national network of approximately 31 Service Partners, expanding monthly, of automotive air conditioning service and repair centres. As part of this organization Behr Hella Service is in a unique position to service the local aftermarket with the widest range of air conditioning related products which fully comply with international Original Equipment standards set by vehicle manufacturers. www.automobil.co.za


Paving the Franchise Way Contact our Franchise Head Office on 011 879 6000 2 Gordon Avenue, Meadowview Business Estate East, Linbro Park 2090 “Heavy Duty: Sales, Service & Fitment

CLUTCH & BRAKE SPECIALISTS

CBS has been servicing the clutch and brake industry for more than 50 years. With experience in both the heavy and light vehicle market there is nobody better positioned to take care of your brake and clutch needs? There are over 20 stores in key locations country-wide ready to offer you professional service expected from a highly specialised workshop like CBS.

www.cbsclutch.co.za “The primary supplier of Ferodo commercial vehicle linings “

WITH YOU ALL THE WAY

www.ferobrake.co.za

Established in 1965, Ferobrake has a long-standing history of being amongst the market leaders in it’s field of expertise. With 25 dealers nationwide, Ferobrakes enjoy the benefit of exclusive pricing on Ferodo vehicle linings. Ferobrake is the primary supplier of Ferodo commercial vehicle linings to the transport industry. Ferodo linings are supplied by Maxifren, a division of Aftermarket Solutions and they also manage the marketing of the Ferobrake brand.

“Your car deserves the best”

For the love of cars

www.midas.co.za

Midas is a retail store designed around the needs of any vehicle owner focusing on various product ranges from parts and accessories through to lifestyle equipment. There are over 300 franchised outlets in Southern Africa. All our products from the approved suppliers are guaranteed for a full 12 months against manufacturer’s defects on a national basis. The aim is to guide consumer perception and encourage them to associate quality branded products that are guaranteed, with Midas franchises.

“Put the spark back in your drive”

AUTO-ELECTRICAL SPECIALISTS

www.motolek.co.za

Motolek is a unique workshop franchise for auto electrical specialists. There are over 40 Franchises country-wide, offering a network of professional technicians specialising in auto-electrical and related services ensuring guaranteed workmanship nationwide. The Motolek franchise of autoelectrical specialists continues to commit to the training and investment necessary to service the wide range of electronic fuel injection and engine management systems in the market.

“No matter what you drive, keep it cool”

ENGINE COOLING SPECIALISTS

www.silverton.co.za www.automobil.co.za

Service excellence - providing our customers with peace of mind since 1949. Silverton Radiators has been in the engine cooling business for more than 60 years and if there is anybody who understands engine cooling than it’s us. For fast, friendly and efficient service let the professionals help you. There are more than 110 Silverton Radiators dealers spread across Southern Africa so where-ever you are there is a Silverton Radiators dealer near you. SEPTEMBER 2017 - 19


Time in business

COVER STORY

Franchising in South Africa

While there has been an increase in the number of franchises operating in South Africa, lack of economic growth during 2016 has affected turnover – and it appears to be taking longer for start-ups to break even. Wynter Murdoch reports

I

n the Franchising Association of South Africa’s latest annual report, outgoing chairman Naas du Preez observes that, despite the downturn in the country’s economy, the franchise industry has continued to grow – though not at the same pace as recorded in previous years. He says a marked increase in the number of franchise systems and outlets in 2016 – 21% as opposed to 13% the previous year – could well be attributed to the inordinate number of new and international brands which have established themselves in South Africa. The increase has, however, not come with a corresponding increase in turnover (6%) which, in his view, can be attributed to the lack of growth in the South African economy. “The slow-down in turnover is supported by the fact that it appears to be taking a little longer for a franchise business to break even, but the potential for growth remains strong with franchisors exhibiting an extremely high level of optimism with many intending to expand their franchise systems,” he says. According to industry experts, the situation is little different in the automotive sector, with socio-economic factors and tough trading conditions taking their toll on franchised outlets.

20 - SEPTEMBER 2017

That said, opportunities still exist for brands to grow and thrive.

1 in 2 (44%)

have been in business for more than ten years

62%

for more than 5 years, with an average of years.

7,8

Profitability and Break Even

6.8

million

Average annual turnover claimed

14%

Average gross profit - a marked decline . Within the from last year’s of first year of operations, franchisees expect to break even.

22%

47%

Optimism

82%

(72% last year)

Franchisees are optimistic about the future of their businesses. One in ten intends selling their franchise within the next 12 months, but most do not.

Challenges Main challenges facing franchisees are: * finding the right staff, * being able to offer consistently good service, * growing the business with new customers and * marketing the business. Relationship with Franchisor The relationship with the franchisor is rated as very good at but a decline in the ratings since last year .A good relationship = supportive/helpful, open communications, high confidence. A poor relationship = lack of support.

72%

(80%)

As Du Preez points out, the tenacity of the sector – Recommending their franchise with its great entrepreneurial spirit – 4 Four out of five franchisees (81%) extremely/very likely to out of recommend their brand of franchise to others. 65% are proud to contributed a healthy 11,6% 5 belong to their brand; consider it a good business; desirable product/ brand/service; yielding high returns. to the country’s GDP in 2016, while its FASA Annual Report 2016- Page 6 employment numbers rose from 323 519 According to a survey conducted by the to 329 245. Franchise Association with support from Sanlam, the estimated turnover of South But experts say the recessive economic Africa’s 35 000 franchise outlets totalled climate – which has been exacerbated R493,19-billion in 2016. While one in by the country’s downgrade to junk 10 franchisees intended to sell their status, weakening exchange rates, businesses within the next 12 months, volatile fuel prices, rising electricity most were optimistic about the future of and food costs – has put pressure on their operations. consumers to reduce spending. According to the survey, main challenges That, in turn, has led to stiffer facing the sector included: competition within the sector as buyers * Finding the right staff; search for the best deals. With many * Being able to offer consistently good opting to buy down, profitability margins service; have suffered – impacting on overall * Growing the business with new turnover and, for start-ups, lengthening customers and the break-even point. * Marketing the business.

www.automobil.co.za


Franchisor / Franchisee research 2016

Continuity planning

Size of the sector

757

35 000

AND OVER

size of sector

franchise outlets

franchised systems

Estimated turnover

Contribution to GDP

R493,19

11.6% of GDP

GD

billion

Breaking even and a further

1

2

3

4

1 in 4 franchisors estimate that...

month 1

month 2

month 3

month 4

month 5

month 6

47%

it takes up to 6 months before a new franchise breaks even...

mentioned it can take up to 1 year

Sustainability of franchisors

1

2

Financial Martlé Planning Keyter,

3

5

4

The fact that 4 out of 5 franchisors have been in business for more than 6 years...

This is a testament to the sustainability of these businesses.

54%

have been in operation for longer than 10 years

Previously disadvantaged individuals – franchise ownership

18%

26%

Percentage ownership by Previously Disadvantaged Individuals (PDI)

Increase in number of employees

323 519

FASA Annual Report 2016 - Page 5

Though 72% of respondents rated relationships between franchisees and franchisors as very good in that they were supportive and helpful with open communication and high confidence, the number was 8% lower than that for the equivalent question the previous year.

to

329 245

With that in mind, what types of franchising opportunities exist in the automotive sector? Here are three examples of what well-known franchise brands can offer:

However, Du Preez says: “The survey confirmed the sound contribution by the franchise sector to the South African economy, not only in terms of GDP, but also with regard to business establishment and creation of employment via key franchise practices.

Car Service City Established in 2004 as the first franchise offering in the Car City Holdings’ stable of business opportunities, today it is joined by other franchises in the group, including Car Wash City and Auto-Mate Service Centres.

“There is no question that franchising is playing and can continue to play an

The aim of the Car Service City franchise is to provide best quality service or repairs

www.automobil.co.za

DOWN

323 519

32%

16%

329 245

The total number of employees up from

even bigger role at affordable prices, 42% targeting vehicles in growing South which are no longer covered by service or 34% Only 34% have made plans down from 42% Africa’s economy, maintenance plans, or which are in nurturing out of warranty. Customers benefit Surety protection entrepreneurship from a six-month or 10 000km and small business workmanship guarantee. and, Of theabove all, in the majority have surety protection and/or buy and sell creating jobs.” According to agreements. a statement, venues suitable for establishing an outlet Du Preez adds should offer sufficient off-road parking Employee Benefits provision that, in spite of for 12 to 15 vehicles and prominent security offered by signage displays. While a basic service Funeral Cover Healthcare Retirement a franchise brand, centre occupies 280 to 320sqm, an the successDOWN of a outlet that fitsDOWN the company’s superior DOWN business relies on category needs to occupy upwards of Provision for ill health or frailty the franchisee’s 380sqm and be located in a high traffic 70% (down from 75% ) have made provisions thirst and ability area with street frontage. 30% who have not in case of ill health or frailty OR, made provisions in case to innovate – of ill health or frailty particularly in trying A typical outlet will be manned by the 70% times. “By its very franchise owner or branch manager, 30% nature, franchising an administrative secretary, at least is entrepreneurial one qualified mechanic supported by Who will take the franchise over? and forwardworkshop assistants, one car washer thinking. While and a general cleaner. socio-economic franchisors hope that a family member / factors and tough Every franchisee, branch manager children will take over trading conditions and secretary is required to attend affect businesses, specifically designed Car Service there are always City training courses which last from Knowledgable person takes over business Supports planning those who do two to four weeks. Infinancial addition to well in tough secretarial and managerial functions, 37%includes all Car times and those the franchisee’s training who, by default, Service City procedures and standards, thrive on the back financial controls, administrative 22% of challenging requirements and procedures and staff hope someone who knows the business 22% of franchisors (down from 37%) conditions,” he said. management.Only supports Franchisees with financial planning will take over

19%

When it comes to business ownership: and by women it is

MISA’s CEO for Operations

Ongoing training regarding products and systems ensures that franchisees are kept abreast of developments within the car service industry. Car Service City employs both traditional and non-traditional advertising formats, with promotions rolled out at regular intervals, whileHead Office support includes a roving Car Service City company manager who is charged with FASA's helping franchisees outgoing chairman, in day-to-day Naas du Preez management.

SEPTEMBER 2017

21


COVER STORY Car Service City franchisees should possess a successful business background with particular emphasis on interpersonal skills and financial management. Franchisees that are not knowledgeable about the car servicing industry are advised to employ a wellinformed manager.

Supa Quick Supa Quick was founded in 1986; an initiative of what was then Firestone South Africa. Initially comprised of a small collective of tyre retailers, it was registered in 1989 as a separate company and promptly continued its innovative streak by expanding its product offering to introduce a one-stop shop concept – still one of its strengths. In 1998 Supa Quick was drawn into the Bridgestone stable and continues to benefit from the global Bridgestone association. Today, Supa Quick is described as a closeknit alliance comprising the franchisor, franchisees and strategically selected supply partners. The company’s focus is value creation, maximising skills and service delivery to meet market demands and satisfying stakeholders. All Supa Quick stores are franchised in accordance with a business format franchise model. Via its national footprint, the company is dedicated to providing complete customer solutions, delivering excellent service, expert advice and workmanship. Regarded as an expert in automotive parts replacement, Supa Quick’s product range includes tyres, wheels, batteries, shocks and suspensions, brakes, exhausts and tow-bars. In addition to servicing the man-in-the-street, Supa Quick is also a long-standing service provider to major car fleets, leasing and contract hire companies. By virtue of the nature of the business, the customer base incorporates

22 SEPTEMBER 2017

owners and users of passenger, light commercial and SUV motor vehicles. A suitable location for establishing a Supa Quick outlet is a retail hub with high economic activity with other motor related businesses within the immediate vicinity. Every Supa Quick franchisee is required to complete a Franchisee Induction Programme at the company’s SETA accredited training centre. All Supa Quick staff members are required to attend the course where they undergo training in customer relations, sales, marketing, product knowledge and technical aspects. On-going technical training is provided on-site by a team of managers, while suppliers provide product-specific training and instruction. Prospective franchisees should ideally have experience in the retail tyre fitment industry, but applications from candidates with a strong retail background are also welcomed.

PG Glass A well-established, strong brand, PG Glass is respected and trusted by the insurance industry – the major stakeholder in South Africa’s glass replacement sector. Sustained investments in maintaining the PG Glass brand strength ensure that PG Glass franchises remain preferred and trusted solution providers. Over 15 000 calls are received by 20 PG Glass agents each month. These leads are processed and distributed to PG Glass franchises daily, providing franchisees with a steady stream of orders. Service providers within the PG Glass network ensure that the company is able

to offer national account holders and insurance companies a comprehensive solution across South Africa. A PG Glass franchise ensures that the members participate in the significant revenue streams derived from centrally negotiated national deals. Membership of the PG Glass Network also provides franchisees with the opportunity to participate in company’s strategy, obtain benchmarking data and benefit from the collective wealth of knowledge and experience. A comprehensive operations manual provides franchisees with documented guidelines and operating procedures. The recently implemented SAP enterprise resource planning system ensures that each PG Glass franchise operates and transacts efficiently and smoothly. Leads are immediately distributed from the PG Glass website to the cell phones and inboxes of franchise holders. The PG Glass Call Centre processes and streamlines insurance claims, authorisations and payments, leaving franchisees to serve customers and fulfill promises profitably. Since the PG Group manufactures, sources and distributes glass, PG Glass franchisees are assured of access to a wide range of leading edge products and technology – and product training and support. Product marketing collateral is available to all PG Glass franchisees, with technical expertise supplied on request. While PG Glass will facilitate a franchise acquisition process, the sale of a franchise is negotiated between the prospective buyer and the existing PG Glass franchise. New franchisees are required to pay a start-up fee to PG Glass to cover the initial training, administration and set costs. The start-up fee is determined by the size of the franchise to be acquired.

www.automobil.co.za


Driven by PASSION

Secure the future of your workshop! Choose one of the Bosch workshop concept solutions As a Bosch workshop concept partner you can offer your customers first-class quality and you can profit from distinct advantages when partnering with Bosch:         

Internationally recognised brand Distinctive corporate identity Effective marketing and advertising programme Comprehensive technical support portfolio, including ESI[tronic], Bosch diagnostics, technical training, hotline and field support Quality automotive parts at competitive prices Customer retention programme National Deal Partner support programme Fleet program

www.boschservice.co.za Share the success of a strong brand in the workshop market. For more information, visit our Website or call Customer Careline

0861-267-247 www.automobil.co.za

JUNE 2017 -

23


FRANCHISING

Bosch’s franchising concept

Make full use of the latest technological advances – and turn them into competitive advantages

T

he Bosch Group’s strategic objective is to deliver innovations for a connected life – improving the quality of life worldwide with products and services that are innovative and spark enthusiasm. This makes the tag line “Invented for life,” as true now as when the company was started by Robert Bosch in Stuttgart in 1886. Our solutions for the automotive industry The highly connected, fast paced, technology-based world we live in provides companies with numerous opportunities. At Bosch, we understand the challenges that our customers face. Our solutions for the automotive industry can help you make full use of the latest technological advances – and turn them into competitive advantages. We offer a range of products and services that allow you to distinguish yourself from the competition and offer significant value and benefits to your own customers.

Excellence in automotive parts, diagnostics and workshop concepts Africa is a thriving market for all industries, but especially for the automotive sector. Within Robert Bosch Automotive Aftermarket, Sales Southern Africa is responsible for sales, marketing and technical services for the entire region, which includes South Africa, Namibia, Angola, Botswana, Zambia, Zimbabwe, Malawi, Mozambique, Swaziland, Lesotho. The division’s business concept includes the Parts, Diagnostics and Workshop Concepts. Our Automotive Technical Training Centre is affiliated to the automotive aftermarket worldwide training structure.

As a Bosch workshop concept partner you can offer your customer first-class quality and you can profit from distinct advantages when partnering with Bosch. Share the success of a strong brand in the workshop market. For more information, visit us at Automechanika – contact Antoinette.Dafel@za.bosch.com to meet the Bosch Team.

Technical training is offered in the fields of Engine Management, Electrical, Electronics, Braking, Mechanical Service and Diesel using input from both the AA technical training database, as well as locally adapted material for South African specific vehicles.

Bosch has always been a value-driven company. Our values reflect the manner in which we run our business: Our professional ethics in dealing with our business partners, investors, employees and society at large.

Our vision is to establish Robert Bosch South Africa - Automotive Aftermarket Division as the supplier of choice to 1st, 2nd and 3rd trade level customers of the automotive aftermarket in Southern Africa.

As one of the world’s largest independent parts suppliers to the automotive industry, we significantly contribute toward making driving ever safer, cleaner and more economical.

We will achieve this by responding to their needs and expectations for product, service and process excellence in automotive parts, diagnostics and workshop concepts.

24 SEPTEMBER 2017

Drive your business forward with Bosch through the automotive evolution and stay ahead of the pack. Bosch offers various workshop concept solutions meeting your individual needs.

www.automobil.co.za


TM

www.automobil.co.za

SEPTEMBER 2017 -

25


Est. 2004

e-CAR Nationwide Service Centres Maintaining Independence

e-CAR’s national network of automotive service centres remains a popular destination amongst motorists that require value for money products and services. Since our launch in 2004 we have been able to ensure the sustainability of a substantial number of independent workshops around the country. We firmly believe in assisting independents with the skills, tools, parts and contacts they need to remain in a market that is highly competitive said e-CAR’s Development Manager Rollen Ryan. One of the major contributors to the success of e-CAR’s network in South Africa remains the brand’s partnership with the Diesel-Electric organisation. “There is a growing proliferation of makes and models coming to South Africa from all parts of the world – India, China, USA, Europe, etc. This makes it difficult for many independent workshops to remain competitive as they will struggle to keep an inventory that’s stocked to repair the variety of models we have access to locally,” Ryan said. He added that e-CAR remains committed to its partner brands – ATE, Bosch, Gabriel, GUD, Hella, OSRAM, RAM, Sachs and Valvoline. “We’re not your traditional franchisor, which looks to eradicate a business’s identity, style or culture. We are here to enable small and medium size workshops to grow its market share through the establishment of a corporate identity.” The e-CAR Club, which consists of some 15 000 members, gives members the added benefit of peace of mind while travelling in their cars and allows for 24 hour roadside assistance as well as medical and legal assistance. The Club also encourages repeat business and promotes the e-CAR brand.

SPECIAL REPORT This feature is sponsored by e-CAR


BENEFITS OF e-CAR • A Corporate Identity offering visual impact

• National campaigns across all channels including radio, TV, website and social media • Local and regional marketing campaigns • Beneficial rates for Bosch diagnostics equipment and training via Robert Bosch SA • Backed by nine leading automotive brands • Fast, effective cost estimations • Merchant relationship with two national fleets

JOINING REQUIREMENTS OF e-CAR • e-CAR Corporate Identity and signage • Owner must be a qualified technician • Be affiliated with the AA and RMI • Professional office management system • Affordable monthly contributions towards the e-CAR advertising and promotions fund • Workshop with an under-cover area of at least 250m2

e-CAR CUSTOMER PEACE OF MIND • When motorists see the e-CAR signage, they see a general workshop they can trust and that has substantial backing from an established name in the industry • There is integrity in all transactions and no risk of having left their vehicle in the hands of unqualified technicians • Plus there is the benefit of a national warranty

ADDED VALUE TO e-CAR MEMBERS • Loyalty purchase incentive • Logistical support from Diesel-Electric as a service network partner • National and regional representative council • Repeat business from motorists

20375498203

CONTACT DETAILS Tel: 086 000 3227 Email: info@e-car.co.za / Website: www.e-car.co.za e-CAR ALWAYS FITS TOP QUALITY PARTS


INSIDE LINE

Corolla production under consideration? The assembly line used to build one of South Africa’s motoring icons, the Toyota Corolla, is operating at barely 20% capacity – and the company’s CEO, Andrew Kirby, says ways are being investigated to fill the hole. David Furlonger reports

C

ould Toyota SA be reconsidering local production of the formerly allconquering Corolla? The company’s Prospecton, Durban assembly plant has built more than one-million Corollas since 1975. Production of the latest model, the 11th generation, began in 2014. The car is a South African icon. Or rather, it was. Like the rest of the mid-market car segment, Corolla sales have shrunk significantly since new-vehicle buying patterns began to change in 2014. Since then, new car customers – encouraged by the economic downturn – have bought cheaper, entry-level models, including Toyota’s own Etios which is imported from India. As a consequence, Prospecton production of Corollas is operating at barely 20% of capacity. In 2016, the plant built 17 728 cars, a fraction of the 84 000 units for which it’s designed. The picture is no brighter this year. Compare that with Toyota SA’s current glory-boy, the Hilux bakkie, and its Fortuner sports utility vehicle sibling. Last year’s production of 93 063 units represented more than 75% of the 120 000 unit potential. However, because of the Corolla shortfall, total plant production was only just over half of its 220 000 unit capacity. Including 12 500 Quantum taxis, the facility built 123 000 vehicles excluding Hino trucks, which are reassembled at Prospecton and accounted for separately.

28 SEPTEMBER 2017

Corolla production included two models: the latest generation Corolla and the Quest, a cut-price derivative based on the superseded model. Local sales numbers also incorporated those pertaining to the related Auris, which is an imported model. Even though an eventual recovery in the local market will drag up Corolla sales, Toyota SA CEO Andrew Kirby obviously doesn’t expect dramatic benefits. He told a recent motor industry conference that the company was investigating new products to fill the hole left by the Corolla. He offered no indication as to whether it would be a brand-new vehicle or localisation of one already sold here. Pointedly, he also avoided a statement on the long-term future of Corolla.

If the choice is to localise an imported product, one assumes it would also be chosen with both local and export demand in mind. Corolla, once touted as a major export product, is anything but these days. In the six months from February to July, Toyota SA exported just 568 Corollas, compared with 20 076 Hiluxes and Fortuners. The picture is a bit sunnier locally but still a mismatch. Over the same six-month period, the company sold 8 462 Corollas (including Auris), against 24 398 Hiluxes and Fortuners. Hilux, even without the Fortuner, is South Africa’s biggest-selling vehicle of any description – a position once held by Corolla. Ridiculous as the idea seems, given its history, the Corolla these days represents a low-volume product in a market where automotive investment policy encourages

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big numbers. Even if Toyota SA and its Japanese parent decide to stick with local Corolla production, numbers such as those which I’ve quoted must come into their future investment reckoning. In principle, the next Corolla generation is due in 2021 – a year after the current, incentive-driven Automotive Production and Development Programme (APDP) ends. Like other companies, Toyota SA is awaiting the outcome of industry-government talks on a successor, which is likely to run to 2035. Speaking at the conference, Kirby was quick to downplay fears that European countries’ stated intention to phase out traditional petrol and diesel vehicles from their markets over the next two decades will hurt his company’s prospects in the regions. Toyota SA exports to 28 European countries, several of which have declared their long-term commitment to bar the traditional internal combustion engine by 2040. “There is no danger of us being phased out of those markets,” he said.

DON’T LET A DIRTY WINDSCREEN BUG YOU

Volkswagen SA spokesman Matt Gennrich summed up the attitude of most companies with big European order books when he said: “We have no idea what products we will be building here in 2030, never mind 2040. “Whatever happens, we will adapt the product to suit local market requirements, as we do now. So we may be building very different products for different markets at that stage. But it is all speculation.”

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Given the current implosion of African markets, which should be the key targets for local vehicle manufacturers, it’s important for Europe to remain accessible. Africa’s new-vehicle sales have plummeted in the last three years and, though economist Lumkile Mondi expects them to eventually realise their consumer growth potential, he admits it won’t be by tomorrow. “Governments have to address their infrastructure issues. But you also need governments with budgets. Some countries are cash economies where governments can’t collect taxes,” he said.

JHB Expo Centre, Nasrec 27-30.9.2017 Hall 6 – Stand E07

What’s more, the fact that a Southern African freetrade agreement is already four years behind schedule is evidence of David Furlonger some of the is the industrial challenges editor of facing economic Business Day growth and and Financial co-operation in Mail Africa.

E+I 4918

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Tel: +27 (0)11 386 7100 SEPTEMBER 2017 29 www.spanjaard.biz


ASSOCIATION OF THE MONTH

The South African Diesel Fuel Injection Association (SADFIA) is a small, highly specialised sector of the motor industry whose main function is the repair and servicing of diesel fuel injection systems. Attie Serfontein, director of the RMI’s newly formed REMAN Cluster – which includes SADFIA, the Engine Remanufacturer’s Association (ERA) and the Automotive Component Remanufacturers Association (ACRA) – reports

W

hen it comes to diesel fuel injection systems, SADFIA leads the way with regard to speciality repairs, quality assurance, warranted workmanship and client satisfaction.

Members of SADFIA participate in an inter-industry warranty system regarding repair work and they subscribe to a Code of Ethics and repair classification system which governs warranties.

The association is fully committed to the RMI’s vision and its mission is to maintain the integrity and stability of South Africa’s diesel fuel injection industry by always striving to provide excellent service – carried out by qualified technicians – at a fair and reasonable price.

Accredited membership of SADFIA allows proprietors to display the RMI Code of Conduct through which the association undertakes to provide products and services at reasonable prices, and to honour both the letter and spirit of any guarantees that accompany the sale of those products or services.

SADFIA has played a key role in the establishment of high standards of workmanship in the industry and was the motivating force behind the formulation of SABS Code 0166 for the reconditioning of diesel fuel pumps.

SADFIA membership accreditation not only gives members full access to all SADFIA and RMI trade and labour services, but it also facilitates the use of corporate branding within member establishments and on stationery items.

30 - SEPTEMBER 2017

Accreditation ensures customer peace of mind and is regarded as an important marketing tool for member businesses. In the intensely competitive modern business environment, today’s motor industry entrepreneur has to be able to rely on professional and efficient support and infrastructure which not only meets but also anticipates needs within the sector. Dedicated SADFIA website The introduction of the SADFIA website – www.sadfia.org – with the kind assistance of Robert Bosch SA and Africa Automotive Aftermarket Solutions, has helped to increase the association’s value proposition to members. The dedicated, interactive portal allows paidup members to:

www.automobil.co.za


KEEPING THE WHEELS TURNING MEMBERSHIP ACCREDITATION not only gives members full access to all SADFIA and RMI trade and labour services, but it also facilitates the use of corporate branding within member establishments and on stationery items. Accreditation ensures your customers peace of mind.

KEEPING THE WHEELS TURNING

SADFIA membership is probably one of the most important marketing tools which you’ll ever have access to, through which to make your business grow and build your company’s image. In the intensely competitive modern business environment, today’s motor industry entrepreneur has to be able to rely on professional and efficient support and infrastructures, which meet and even anticipate his or her needs. SADFIA can fill that role today through a variety of products and services that include: •

Networking with various local and overseas bodies on various issues with the view to improving the local market. • Interaction with fellow diesel fuel injection workshop entrepreneurs through meetings. • SABS representation – Participate in discussions with SABS to ensure that member interests are protected and that onerous specifications and practices are not unilaterally implemented. • Differentiation from non-members through Accreditation and the Code of Conduct we promote the prominent display of aforementioned insignia. • Timeous participation in media publications to enhance the position of RMI/SADFIA in the marketplace. • National inter association conventions for purposes Chris le Roux (secondoffrom left), one of diesel fuel injection industry stalwarts honoured member networking andthe product/service by SADFIA at a recenteducation. meeting of the REMAN Cluster, with (from left) Attie Serfontein, • Dissemination of information on RMI products and Louis Van Huyssteen and Du Plessis servicesDirk to member network. • Support in the mediation process of members and consumers in upholding the Code of Conduct. • Ongoing dissemination of information to members through the website and email database. • Communicate with other members • Support in industrial relations networking, Kyalami, where extensive representation at DRC, CCMA and labour court. and suppliers and source parts and opportunities for networking CONSUMER PROTECTION ACT makes the South • Negotiation of wages and substantive issues with consumer amongst the best protected information;Trade Unions by the RMI. helped toAfrican create tight business tiesbusiness? in the world. How does this effect your • Access to health and retirement funds. • Advertise• obsolete parts partners within the sector. Website: We would and love tospecialised hear your feedback with other Just one of the reasons to become a member or as to your requirements to include member benefit participate in the road shows held by SADFIA to services to fellow members; of theyouRMI who attended areas such as buy/sell/source, find a member, Members support in industry. member discount, commercial collective arrangements, advertising opportunities, online news- the event See • Access a monthly newsletter; had advantage of a 35% our the website for more information. letters, industry news with archives, feedback and more. • View supplier specials and technical discount on standard rates for TruckX or

information; • Share and request technical, repair and related industry information. SADFIA, through its association with the RMI, various committees and a network of regional and branch offices, seeks to assist its members by: • Rendering quality services and benefits; • Helping to improve market conditions; • Communicating effectively with both national and provincial government authorities on all matters that impact member businesses; • Recognising and affirming the right of customers to courteous, prompt and honest service; • Providing dynamic input regarding training of current and future manpower needs within the industry; • Combatting the use of counterfeit parts in the fuel injection industry; • Ensuring high standards of ethics through the accreditation of member businesses. Recently, SADFIA represented the RMI at the TruckX & FleetX trade show at

www.automobil.co.za

FleetX conferences. At the association’s stand, SADFIA’s experts offered advice and guidance with regard to all manner of diesel fuel injection systems and provided much needed information regarding RMI-related inquiries. Engine Management and Fuel Injection System Qualification The association, together with other industry stakeholders such as merSETA, concluded in July last year the framework for a Development Quality Partner (DQP) qualification for engine management and fuel injection system mechanics which is currently being circulated for comment and assessment. The intention is to implement the qualification in the interests of providing a better skilled workforce for members of the industry. SADFIA wishes to thank its members and all stakeholders who participated in formulating the framework.

Honouring our members At a meeting of the REMAN Cluster held in June, SADFIA took the opportunity to pay tribute to members who have serviced the industry for many decades, among them: • Roy Bastick of Bastick Engine Rebuilders, Cape Town, who has been involved since 1950; • Chris Le Roux of Electro Diesel, who has been involved since 1955; • Allan Y Brink of Allen Y Brink Engineering, Pretoria, who has been involved since 1970; • Solly Ferreira of Queenstown Engineering, Queenstown, who has been involved since 1980; • Jonty Gluckman of Mafika Engineering, Johannesburg, who has been involved since 2001. Paying tribute, the association pointed out that though those who were honoured remained committed to excellence within their particular fields, it was important

SEPTEMBER 2017 -

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ASSOCIATION OF THE MONTH

to recognise the role they had played in creating and structuring the industry, for today’s successes were directly linked to decisions and choices made yesteryear. “We salute you for your dedication and wish you well for the years to come. May you all be blessed with good health and lots of laughter. Thank you for the legacy you’ve created and, in so doing, set the road for the years ahead – we will not fail you,” read the tribute. SADFIA at Automechanika The REMAN Cluster – including SADFIA, ERA and members of the turbocharger remanufacturing fraternity, met recently to discuss a combined conference to be held at this month’s Automechanika trade fair in Johannesburg. It was agreed that the central conference topic would revolve around the theme, The Technology Driven Future of the

Internal Combustion Engine, with subject matter encapsulated by a number of experts through the involvement of partners such as Federal Mogul, Sasol and Mahle. The conference is scheduled to be held on September 29.

However, a related conference – which will focus on Clean Energy and Efficient Diesel Technology – will be held at Automechanika on September 28, involving Government partners, Denso, Delphi and Hartridge.

“Abandoned Solutions offers a LEGAL, COST FREE solution TO ALL DEALERS/WORKSHOPS/PANELSHOPS” WHAT WE DO?

Abandoned Solutions (Pty) Ltd offers various Motor Vehicle Dealerships and Workshops the opportunity to sell their claims with regards to outstanding invoices and monies where the dealership has rendered services and invoiced for work already, quoted, finished or assessed, in their workshops and where the owner of the vehicle has simply: • Failed to pay, • Is uncontactable & uncooperative or willing to settle • Abandoned their respective Vehicles • Passing onerous risk on to the dealership forcing them to store various unwanted vehicles • Occupying valuable rented workshop space by leaving their unwanted vehicles on the Dealerships Premises. Abandoned Solutions simply buys the outstanding claim by negotiating an acceptable price from the dealership and removes the vehicle with immediate effect, whilst taking ownership of the outstanding claim or invoice.

HOW IT WORKS? • • • •

Both Parties, simply negotiate the price per claim that the dealership is willing to sell at (Willing buyer willing seller principal) Contract per claim is finalized and the monies are paid immediately (effecting the sale) The vehicles are collected immediately or by way of arrangement (Removed as promised) Abandoned Solutions is now rightfully the owner of the claim or outstanding invoice (Dealership is free of the liability and no longer the rightful Creditor of that particular claim rather that ownership has passed to Abandoned Solutions Pty ltd) Abandoned Solutions will trace the client at its own risk and have the claim settled in full (this is how we make money and bring value to the Dealership) - AUGUST 2017

32

SOLUTION OFFERED •

We at Abandoned Solutions offer a quick, cost free solution to these problems.

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www.automobil.co.za

JULY 2017 -

33


RMI UPDATE

Niemand takes over MIWA reigns

T

he RMI has announced that Pieter Niemand has been appointed Director of the Motor Industry Workshop Association (MIWA). The appointment became effective on July 1. Niemand has been involved in the motor industry for 10 years. “I was very fortunate to start my working career under the guidance of the late Dr Anton Rupert, an industrialist and a phenomenal business personality. He believed in specific business principals which I still to this day practice, and which I believe has led to success,” he says.

Pieter Niemand, newly appointed Director of MIWA

Niemand adds that though the motor industry is complex and demanding it is also rewarding. “I became involved

in the industry from a business rather than technical perspective and have had the opportunity to grow over time, with historical and current responsibilities in an ever-changing environment forcing me to be more involved in a practical manner. “I really love the industry and fortunately, my job has been made easier through the support and assistance of Retail Motor Industry Organisation (RMI) members who serve the Organisation in its various structures.” Over the years, Niemand says the most notable changes in the industry have come from developing technology. “The advent of CanBus information systems to transfer instructions from the driver to

GUD acquires Holts

G

UD Holdings has announced that it has acquired car care product company Holts – which it will rename GUD Chemicals – with a view to marketing and distributing brands such as Holts, Prestone, Redex and Simoniz throughout Africa. Chris Haworth, CEO of GUD, says the acquisition is in line with his company’s strategic objectives of being a leader in the manufacture and marketing of premium quality automotive products. “The Holts brand and its extensive product range has a premium quality heritage that stretches back 98 years. The company is a great addition to the GUD stable

34 SEPTEMBER 2017

James Hooman, Managing Director of Holts (left), with Chris Haworth, CEO of GUD Holdings following the announcement of the deal since it further complements our existing product offering.” Haworth said he was delighted that the Prestone brand had been included in the acquisition. “Its reputation as the number one coolant and antifreeze product in the USA is

testament to its efficacy and quality. We aim to grow the Prestone brand in South Africa as well as in African markets.” GUD’s aftermarket brands include, GUD Filters, Fram Filters, Indy Oil and Safeline Brakes.

www.automobil.co.za


the various parts of the vehicle helped to change the industry,” he says. Along with that the methods of induction that have evolved over the years to improve fuel efficiency and emission controls have allowed for increased performance from smaller and smaller engines, with the use of turbochargers and superchargers in various forms either individually or in combinations with each other. “What this means is that technicians who perform servicing or maintenance tasks have to be well-versed in the technologies employed in the vehicles of today, as opposed to just knowing about oldfashioned points, plugs and condensers. “The increased efficiency of oil lubricants and filtration, the removal of leaded fuel, the evolution of ignition systems have all lead to another major change in the industry over the years – service intervals.

“Whereas, in the past, service intervals of 5 000km needed to be adhered to we now see intervals exceeding 30 000km. This has impacted on the level of business to be had in the workshop environment.” According to Niemand, with the rate of change having been so rapid in recent years one can but only wonder where the next decade will lead the industry as far as the internal combustion engine is concerned – especially since electrically driven developments are looming rapidly. As the Association Director of MIWA, Niemand’s responsibilities include elements of facilitation, management, investigation, development, sales, guidance, training and administration. “The industry demands continuous improvement, which demands guidance at all levels. As MIWA’s director I am required to remain abreast of developments and

provide assistance to the association’s members in navigating these demands.” He says, as the biggest association within the RMI, MIWA has a prominent role and responsibility to fulfil, creating structures to serve as references for members conducting business on a day-to-day basis. “The MIWA brand is now a recognised and trusted brand in both the eye of industry and certainly the consumer. We have gained tremendous respect as experts in the industry and it is of utmost importance to maintain the positive momentum. “My aim is to focus on specific objectives and priorities to create a culture where MIWA members will want to be part of the inner circle of a well-informed and structured business unit. “MIWA is its members and the members are MIWA. We need to stand together as a collective voice,” he says.

See NASCAR in Belgium!

F

ans of Federal-Mogul Motorparts are in for a special treat as the high-quality aftermarket car parts brand launches a special social media campaign to reward them. Followers of the company’s Champion brand Facebook page are invited to take part in a competition granting two participants the chance to win $50 vouchers for Amazon

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purchases every single week, over a period of eight weeks. The weekly winners will also be included in the competition’s grand prize draw – a trip for two to the NASCAR Euro Series event in Belgium in October. All users have to do to participate in the #AlwaysChampion and #RoadToNASCAR competition is enter their details on a Facebook page form.

Lucky draws will be held every week for eight weeks, with the 16 winners automatically considered for the grand prize draw, the winner of which will be announced on Sunday, September 10. According to Federal-Mogul, the Champion brand of high quality ignition products includes spark and glow plugs, control units, coils, wires, and filters for the aftermarket.

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RMI UPDATE

Growing pressure for motor dealers

B

esides having to operate in tough economic conditions, motor dealers in South Africa faced increasing business management pressure, according to Gary McCraw, director of the National Automobile Dealers’ Association (NADA). In a recent address in Gauteng at the NADA/Sewells MSXI Business of the Year (BOTY) Roadshow, McCraw sketched the rapidly changing environment in which motor businesses operated. Additionally, he presented feedback involving recent meetings between the Competitions Commission and NADA and added details about proposed legislative changes Government was considering under the Financial Intelligence Centre Act. McCraw described the latter as “onerous to dealerships” if implemented as proposed, and said NADA would be engaging with authorities to consider the negative and costly impact that the proposed changes would have on dealerships. His opening remarks got the audience’s attention as he listed unexpected happenings – global and local – which had occurred between the mid-year BOTY Roadshow in 2016 and this year’s event. These included: • Donald Trump becoming president of the United States. • President Zuma firing Finance Minister Pravin Gordhan and subsequently announcing a Cabinet reshuffle at midnight. • Malusi Gigaba’s appointment as Minister of Finance. • Theresa May losing her majority in the British Parliament in a snap election meant to strengthen her position.

36 - SEPTEMBER 2017

Gary McCraw • General Motors disinvesting from South Africa. McCraw said the events helped to illustrate how necessary it was for dealer management to be aware of the changing world around them so they could make changes to the way they did business and planned for the future.

John Templeton John Templeton, Market Head Operations at Sewells MSXI, provided delegates with details on several useful methods of managing automotive dealerships in changing times, when margins were under pressure and volumes weren’t rising. He said the situation was particularly concerning for dealers who sold luxury car brands.

He went on to surprise many delegates by showing how several key economic indicators, such as exchange rates, the oil price, fuel price and CPI had, in fact, improved over the past 12 months. He urged leaders in the industry to instill positive attitudes in their areas of influence.

Templeton said the tough trading environment meant it was increasingly difficult for dealers to absorb overhead costs solely through after-sales income.

McCraw provided background on the meeting with the Competition Commission and explained that the body was proposing the introduction of a code of conduct for the motor industry which would focus on restrictive trade practices, consumer rights of choice and financial barriers to market entry.

“Tight expense management has to be linked to ensuring all members of the executive team – including heads of the parts and service operations – are made aware of financial processes and given the required business management skills to ensure their areas of responsibility do not become a drain on the overall wellbeing of the dealership.”

He said engagement with the Competition Commission by NADA on the proposed code would continue over the coming months.

The BOTY roadshow in Johannesburg followed similar sessions in Cape Town and Durban.

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HEAD OFFICE merSETA House, 95 7th Avenue, Cnr Rustenburg Road Melville Johannesburg, 2092 Tel: 010 219 3000 Fax: 086 673 0017 EASTERN CAPE

What is a learnership?

What is an apprenticeship?

A learnership is a structured learning process for gaining theoretical knowledge through an accredited training provider and practical skills in the workplace leading to a qualification registered on the NQF. A learnership is outcomes-based and not time-based and allows for recognition of prior learning. Learnership duration varies but the average is about 12 months.

The apprenticeship system is a well-known technical training system, which covers both practical and theoretical components offered in listed trades. Once you have completed your training, you will need to pass a trade test to qualify as an artisan.

Who is eligible to enter a learnership programme? Any person, employed or unemployed, may apply to register for a learnership: Ÿ If you are employed, you may register for a learnership

programme within the sector where your company or organisation operates; or

Ÿ If you are unemployed, you may register for placement in a

learnership programme at your local labour centre or with employers in your area.

The Department of Labour refers unemployed individuals, who meet the minimum criteria, to employers looking for learners. How does one apply for a learnership programme? Ÿ If you are employed, find out which learnerships are

available in the sector in which you work. Upon deciding which learnership programme is appropriate, you will need to enter into an agreement with your employer stating your rights and responsibilities as a learner; or

Ÿ If you are unemployed, you must register your profile at the

nearest Department of Labour office, after which you may be referred to employers who may be looking for learners to enter learnership programmes.

Who is eligible for an apprenticeship programme? Any South African citizen, 16 years or older. There are different admission requirements for the various trades. Competence in Maths, Science and English will enhance your chances of selection. How does one apply to enter an apprenticeship programme? Ÿ If you are unemployed, you may apply to a company that is

offering an apprenticeship programme; or

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37


RMI UPDATE

Partinform visits

Port Shepstone

T

he KZN South Coast town of Port Shepstone last month played host to the Partinform Road Show, continuing the organisation’s aim of promoting the use by the automotive aftermarket of good quality parts and services around South Africa. The event was held at the town’s Civic Centre and was well attended by more than 80 guests from the local automotive community. The quiz show highlight indicated that visitors had asked many questions at the various members’ stands, with attendees interested in finding out about all they could about the brands on display. The winner joins others from preceding events at Partinform’s end of the year go-kart race organised by MCP Rental Karts. Other prizes for the evening were sponsored by Monroe, Holts, RAM and Schaeffler. As always, there was intense competition between the Partinform exhibitors as to which brand would receive the award for the most impressive stand of the evening. After much deliberation, the committee decided that Monroe’s display would take the honours. Partinform’s Road Shows – which are supported by the RMI – continue to be popular among members of the country’s automotive aftermarket community with events being perceived as interesting and informative. The focus is on the advantages of using quality brands and services when providing parts and spares for the service, repair and maintenance of vehicles. The RMI stand attracted much attention in Port Shepstone with a number of visitors asking question about the organisation. The next Partinform show will take place on September 28 at the Automechanika trade fair at Nasrec, Johannesburg.

38 - SEPTEMBER 2017

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Audi Genuine Parts Genuine Parts engineered for your Audi. Carrying the promise of progressive engineering to its core, Audi Genuine Parts are as distinct as the brand they represent. All parts originate during the development of each model, ensuring that each individual part fulfils its task precisely and reliably. For genuine quality and impeccable safety you expect from the perfect Audi experience, contact your nearest Audi dealership.

Clutch Pressure Plate Part No. 038-141-033-C

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Release Bearing Part No. 01E-141-165-D

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R5,286.62

David Furlonger

www.automobil.co.za

SEPTEMBER 2017

41

O&M CAPE TOWN 96245/E

R5,876.47


EVENTS

Get set for new look AUTOMECHANIKA! Automechanika Johannesburg 2017 will strongly feature trucks, transport and logistics when the new-format aftermarket trade show gets underway at the Johannesburg Expo Centre, Nasrec, on September 27

S

erving not only South Africa but also the Sub-Saharan African region, and occurring only every two years, this year’s Automechanika Johannesburg trade fair for the automotive aftermarket represents the fifth edition of the show. For the first time, it will be co-located with related exhibitions; Futuroad Expo, Africa’s first truly international commercial vehicle show and Scalex Johannesburg, serving the logistics and materials handling sectors – another first as it is the pioneer trade and business platform for the road transport-focused logistics sector. This uniquely-positioned, three-showsin-one event provides a powerful business platform where the combined synergies of the automotive, truck, transport and logistics industries present an unprecedented value proposition for participating exhibitors and trade visitors. The show organiser and brand owner of Automechanika Johannesburg, Futuroad Expo and Scalex Johannesburg is Messe Frankfurt South Africa, a subsidiary of Messe Frankfurt Exhibition GmbH, Germany. The South African company is headed by CEO Konstantin von Vieregge, a seasoned marketing executive with extensive marketing experience in the automotive sector. The fact that the NAAMSA-supported Futuroad Expo is part of the offering at Automechanika Johannesburg is seen as

42 SEPTEMBER 2017

a significant development by the industry. Futuroad Expo is a new generation commercial vehicle show that has evolved from the erstwhile Johannesburg Truck & Bus Show, which was held alongside the Johannesburg International Motor Show which was last staged at Expo Centre in 2013. “The fact that Futuroad is now a four-day business-to-business trade show with a large, potential Sub-Saharan trade visitor reach is more appropriate for local truck and bus manufacturers and distributors than the previous 11-day consumerfacing event,” says Joshua Low, Group Exhibitions Director. This year’s Automechanika Johannesburg will mark the fifth time since 2009 that the world-renowned brand for the automotive aftermarket has been staged in South Africa. Over the years the biennial trade fair has established itself as a “must visit” event for key players in the motor and related industries. It has grown not only in stature locally and internationally, but also in terms of the number of exhibitors that participate, as well as trade visitor attendance. Automechanika’ s Truck Competence sub-brand, which distinguishes exhibitors offering products and services to the fleet and trucking sector, will once again be a feature at Automechanika Johannesburg, as it has at most global Automechanika trade fairs for the past five years.

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Industry Workshop Association, Road Freight Association, SA Bus Operators Association, Fuel Retailers’ Association, Tyre Dealers and Fitment Association, Engine Remanufacturers Association and the Autobarn Group.

Truck Competence, which focuses on replacement parts, accessories, services and garage equipment for trucks and buses, signifies the growing importance of the transport sector for aftermarket service providers. At the Automechanika show in Frankfurt, birthplace of the trade fair brand, more than 1 000 of the record number of 4 820 exhibitors offered components, replacement parts, tools and equipment for servicing and maintaining trucks and buses in the retail sector. The Truck Competence identification sign – an orange logo – appears on all the relevant display stands where products and services for the truck and transport sectors are displayed, promoted and demonstrated. Automechanika Johannesburg, Futuroad Expo and Scalex Johannesburg enjoy support from leading industry associations in the motor, transport, and logistics sectors in South Africa, and several conferences and events hosted by trade associations will take place during the fair as part of the Automechanika Academy Programme. The all-encompassing business spectrum of the co-located shows is illustrated by the participation of associations such as the Retail Motor Industry Organisation, Motor Industry Staff Association, Collision Repairers Association, SA Motor Body Repairers Association, Motor

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Additionally, the Automechanika Innovation Awards Competition is aimed at bringing to the fore innovative products and services that are perceived as being beneficial to the country’s motor industry, pioneering the way for less time consuming ways of servicing not only aftermarket requirements, but those of other industry partners, too. Equally, exhibitors relish the opportunity to showcase, demonstrate and promote what they have on offer and trade visitors rejoice in the fact that this business-only event – with free online visitor registration – provides them with a once-in-twoyears opportunity to take stock of their businesses, appraise themselves of new developments and trends, new products and services and the opportunity to make investments to increase their own business efficiencies and profitability. Whether you are an exhibitor with a great value proposition to offer or a trade visitor with passion for business and improving market share and profitability, Automechanika Johannesburg, Futuroad Expo and Scalex Johannesburg are where you must be! • Free online trade visitor registration now open at: www.automechanikasa.co.za www.futuroad.co.za www.scalex.co.za Discounted airfares available from South African Airways at www.flysaa.com promo code AUTOMECJNB. Automechanika Johannesburg opens on Wednesday, September 27 and runs until Saturday, September 30.

SEPTEMBER 2017

43


CAREER DEVELOPMENT

‘Speak with one voice’ In a report published recently in merSETA’s official magazine, Achieve, the organisation calls for national consensus in dealing with challenges associated with what it describes as the inexorable march of technology. Here’s an extract organisations to map out a cohesive strategy to meet the challenge.

I

nstead of structured debate, South Africa’s national dialogue on the Fourth Industrial Revolution is convoluted and fragmented. While distinct discussions and debates are taking place across the country, efforts are disparate and national consensus is not being embedded in our economic and financial psyche. We know there is massive change afoot – but we are not speaking with one voice. Traditional specifications for jobs and career development are rapidly flying out of the window. The time has come for government, labour, employers, academia, community and civic

44 SEPTEMBER 2017

Jobs are being lost on a daily basis due to a host of factors, including high input and labour costs, cheap imports and skills shortages. In the first quarter of 2016, more than 100 000 jobs were shed, while Statistics SA recently revealed that employment shrank by 48 000 jobs during the first quarter of this year.

Skills and innovation are the currency of the future. Knowing this, the merSETA is pursuing its successful partnerships with a host of institutions with a view to increasing research capacity in the country’s manufacturing sector, availing innovative research, supporting postgraduate studies and increasing workplace and virtual-reality training spaces.

Further, the manufacturing industry’s contribution to gross domestic product has decreased to 11,3% compared with 19,7% in 1993.

Among others, we have partnerships with 19 national and provincial government departments, 38 TVET colleges, 15 NPOs, five trade unions, five employer organisations and two international organisations.

We cannot be the victims of the inexorable march of technology. We must bind together and prepare our workforce for mammoth changes that include automation, artificial intelligence, virtual training and innovation around the Internet of Things.

These partnerships force the merSETA to keep up to date with the latest technological and innovative ideas as it is the partnership outputs that form the vanguard of the future. Tough times are ahead and we need tough thinking to creatively solve the challenges.

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www.automobil.co.za

SEPTEMBER 2017

45


TECH TALK

whether it would need further work to make it acceptable, or whether it should be scrapped.

IN QUEST OF

QUALITY The past decades have seen major changes in the type of quality control measures introduced by the auto industry. Jake Venter looks back on history

Q

uality control through the checking of auto parts after manufacture cannot on its own guarantee a quality product. Factors like good design and adequate testing also play a major role. This basic fact took a long time to sink in. The collapse of most of the famous British nameplates can be blamed on inferior design and, especially, on an almost complete lack of endurance testing of parts. In the early days, when most auto items were manufactured by hand, the worker was responsible for checking his own craftsmanship. If the quality was not up to standard the boss would soon come down on him. Later, when machine tools were introduced, quantities of parts produced in a day increased to such an extent that the old system could not cope. The development led to the introduction of specially-trained quality control inspectors. They could accept or reject a part only if they knew exactly what was acceptable and what was not. This, in turn, meant that the design department had to offer guidelines. Forty-five years ago, when I was the resident engineer for the Chrysler engine-machining plant outside Pretoria, every part had a drawing that showed

46 SEPTEMBER 2017

its shape, dimensions and tolerances. The drawing also carried references to factory manuals where the material to be used, the fabrication method, testing procedures and other standards were laid own. The drawing was the key to a complete record of what made a part acceptable. This meant that if a part was rejected for not conforming, it could have failed because of any one or more of the aspects outlined above. Every morning, members of the production department were told how many engines they were to produce and, if the total fell short, they had to work overtime. During the day various machined parts were inspected by quality inspectors and rejected parts were put to one side. Every afternoon at 4pm I would meet representatives from the quality control and production departments to discuss the scrapped parts. The discussion was aptly named a scrap meeting because we also scrapped amongst ourselves. Production wanted to get as many parts as possible accepted; quality control wanted to fail as many as possible to maintain standards; and I had to decide whether a failed part could be accepted,

Discarded parts were pounded into pieces by workers using heavy hammers. Rejected crankshafts did not usually need pounding – they had already been broken by a heavy-handed operator who had fed the grinding wheel too fast. Human error was what caused most parts to be rejected. The system works well if you’re producing 100 engines a day, but as quantities increase the relatively long period that elapses between making parts and deciding their fate becomes very costly. Statistical Quality Control Statistical quality control came to the rescue by offering charts, indexes and decision methods that showed quality trends at a glance and made defect prevention easier. Individual component inspection was no longer necessary. Statistical methods were initially introduced just after World War I and the first control chart was introduced by Shewhart in 1924. Later statistical process control (SPC) techniques were introduced by Deming, Dodge and Romig, but very few automotive companies adopted them until after World War II. The Japanese Experience At the end of the war the Japanese industrial system was in ruins, and the American administration realised that the only way to avert chaos would be to help industry to get back on its feet. William Edwards Deming, an American engineer, statistician and management consultant, was brought in with a view to improving production methods and quality control. He delivered his first talk, titled Statistical Product Quality Administration, in Tokyo in 1950. It created so much interest that he was inundated with requests to visit plants and teach statistical quality control. As a result, many Japanese regard Deming as one of the inspirations for the economic miracle that occurred between

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1950 and 1960, when the country rose from the devastation of war to become the second largest economy in the world – only recently overtaken by China. In 1951, Deming was honoured in Japan through the establishment of the Deming Prize, which was initially designed to award Japanese companies for major advances in quality improvement. Subsequently, the Japanese Union of Scientists and Engineers, which organises the awards, has opened the competition to the rest of the world, with recognition for individuals as well as organisations. The Toyota Lean Production System Henry Ford is credited as the first person to combine an assembly line with an integrated production process. Using special-purpose machines and employing go/no-go gauges to check dimensions, he speeded up production processes. While his system worked extremely well to produce a single model like the Model T in a single colour (black), it could not cope with a diversity of models that had different specifications. In the middle 1920s other manufacturers were able to bring to market a variety of derivatives while Ford plodded on with the Model T. The Toyota Motor Corporation was founded in August 1937 and, before start-up, Kiichiro Toyoda – son of the founder – and plant engineer, Taiichi Ohno, made a study of Ford manufacturing methods. They saw the disadvantages of the system and realised that it would be possible to combine a continuous in-process flow with a wide variety of product offerings. Accordingly, they devised the Toyota Production System. Instead of using a dedicated machine to produce one particular part quickly, accurately and cheaply, they introduced self-monitoring machines that were adaptable enough to enable quick set-up and tooling changes so that each could make small volumes of many different parts.

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In this way they set about achieving low cost, high quality and a high variety of parts while maintaining fast throughput times so as to be able to respond quickly to changing market trends. These days, Toyota’s Lean Production System is based on the principle that the factory makes only what is needed, when it is needed and in the quantity needed. This means high quality parts can be produced efficiently and consistently. Outside suppliers as well as in-plant manufacturing divisions deliver supplies so that they arrive just in time. The American Six Sigma System This is a set of techniques and tools for process improvement that was introduced by engineers Bill Smith and Mikel J Harry while working at Motorola in 1986. The system uses mainly empirical and statistical methods to improve quality management, and follows a defined sequence of steps to reduce, for example, process cycle times, pollution and costs with a view to increasing customer satisfaction and profits. Six Sigma aims at: • Continuous effort to achieve stable and predictable process results; • Processes that have characteristics that can be measured, analysed, improved and controlled;

• Achieving sustained quality improvement by commitment from the entire organisation, but particularly top management. The system differs from previous quality improvement initiatives in the following way: • There is clear focus on achieving measurable and quantifiable financial returns and an increased emphasis on strong and passionate management leadership and support. • There is clear commitment to making decisions on the basis of verifiable data and statistical methods rather than assumptions and guesswork. It’s possible to combine the Toyota Lean Production System with the American Six Sigma system, and several companies have done so – but it’s important to realise that the Toyota system involves all the workers while the Six Sigma system puts more emphasis on decisions made by top management.

Jake Venter has worked as a mechanic, as an engineer in an engine assembly plant and as a lecturer, but now prefers journalism.

SEPTEMBER 2017

47


TECH TALK

Innovative TRW tech cuts stopping distances

8975 TRW-ZF Cotec Brake Pads 840x940.indd 1

04/07/2017 15:27

An advanced silicate coating applied to the friction material of replacement brake pads has been shown to cut stopping distances of vehicles, according to the developers, TRW, the Active and Passive Safety Division of automotive giant, ZF

T

RW, a global pioneer in the design and manufacture of complete OE braking systems, has developed COTEC, an advanced silicate coating applied to the friction material of replacement brake pads, which has been shown to significantly cut stopping distances. According to the developers, COTEC enables improved contact between brake disc and pad that can stop vehicles up to seven metres quicker than other premium brake pads during the first few stops following a pad change – known as the bedding-in period. “This innovative technology means that TRW out-performs all major competitors during the bedding-in period of the pad, when the friction coefficient is lower than usual, as verified during independent testing by RDW Netherlands,” says a statement.

accessories that installers need to fit fast and keep jobs moving through the garage. “With 97% coverage in South Africa, installers can serve almost any vehicle, bringing enhanced safety across the vehicle parc.” TWR is the Active and Passive Safety Division of ZF, which acquired the company in May, 2015, in a move that CEO, Stefan Sommer, later described a milestone in terms of ZF’s long-term strategy. “The timing was perfect – not only with respect to the financial framework, but also in view of market requirements. With the new structure, we are perfectly placed to become a truly global integrated systems supplier and hence are superbly equipped to shape future automotive megatrends,” he said. Since the TRW acquisition, ZF has focused on activities that include the digitisation

of mechanical components; e-mobility and the reduction of road accidents and emissions. “Safety is a major factor in the journey toward autonomous driving,” says Sommer. “We’ll be facing a whole new set of challenges for which we’ll have to find the right answers and develop the right products. Our engineers are working vigorously to address these demands.” COTEC represents one of the first new safety products to come to market since the takeover. In a related development, ZF and WABCO last month won Europe’s CLEPA Innovation Award for Breakthrough Safety Technology for jointly developing the prototype of Evasive Manoeuvre Assist (EMA) for commercial vehicles – an industry first system which connects active braking and active steering capabilities to help trucks avoid collisions.

The statement adds that TRW brake pads meet ECE R90 standards and are supplied with new clips and all

48 SEPTEMBER 2017

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www.automobil.co.za

JULY 2017 -

49


TECH TALK

Remanufacturing gains traction Locally remanufactured replacement parts are becoming popular as quality assured, cost effective alternatives to new parts, says Frank Rovelli, CEO of Probe Corporation compliance with OEM performance specifications.” Frank Rovelli, CEO of Probe Corporation

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hrough the lifecycle of a vehicle, the amount customers are prepared to pay for replacement parts tends to vary. Once a vehicle is out of service plan or warranty, the choice between genuine replacement parts, quality alternative brands or, at the lower end of the scale, cheap imported parts, is weighed up. Enter quality controlled, remanufactured parts designed to provide a cost effective option. Probe, a leader in rotating electrics, is currently one of the few local companies to remanufacture automotive parts under careful, quality controlled International Standards Organisation (ISO) standards to Original Equipment Manufacturer (OEM) specifications. Probe’s CEO, Frank Rovelli, says that a variety of reasons – from cost effectiveness to environmental sustainability – make remanufacturing viable. “Remanufacturing is gaining traction around the world; local companies are stepping up their capabilities driven by market demand as the use of rebuilt parts steadily increases.” Rovelli says remanufacturing refers to the re-building of used products to the exact specifications and quality of the original, manufactured product. “Parts must be completely disassembled, cleaned and examined for wear and breakage,” he says. “Parts that are worn out beyond economical repair and non-functioning components are replaced with new or remanufactured components. Units are then reassembled and tested for absolute

50 - SEPTEMBER 2017

Rovelli says it is important to consider alternatives to imported products to remain competitive. “Import costs are high in South Africa, and we further deal with transport and currency fluctuations. About 30% of a part’s landed cost comprises duty, import, transport and holding costs. “Therefore, it makes absolute sense to renew older products that would otherwise be scrapped. Savings on import duties can be passed onto all tiers of customers, including resellers and the direct public. “Reduced inventory reduces holding costs and overhead absorption, while adding value to the products ultimately increases margins.” According to Rovelli, a rebuilt part normally costs 50% to 75% of the cost of a comparable new replacement and carries the same warranty. Probe further offers a “core return-credit programme” to customers, which effectively means they can trade-in a defective part to offset the cost of the replacement. Probe has increased its remanufacturing component to 15% of sales and has set a target of 50% by the end of 2019. The majority of products currently remanufactured are starters, alternators and Horton engine-cooling, spring-applied clutches. Do customers have concerns about remanufactured parts? “A properly rebuilt automotive part is the functional equivalent of a new part and is virtually indistinguishable from an out-of-the-box equivalent,” says Rovelli. “In fact, we are

required by law to clearly label parts as ‘remanufactured’ so that they are not mistakenly accepted as new.” Beyond the commercial benefits, Rovelli says Probe is committed to remanufacturing as part of ensuring a sustainable future and has taken a conscious decision to limit or reduce the impact of manufactured products that add to harmful emissions. “Remanufacturing limits the negative impact on the environment, given that no raw materials are required in the remanufacturing process,” he says. “It gives a product numerous lives instead of just one, thereby saving on raw materials. “Automotive and truck parts are kept out of the re-smelting process longer because of remanufacturing. As a result, millions of barrels of oil or comparable forms of energy are saved and air pollution is reduced. Landfills are spared from the dumping of iron, aluminum and copper because of the monetary value the industry places on parts.” According to Rovelli, perhaps the biggest plus for local re-manufacturers is that of job creation. A team of workers with a variety of skills must be in place to actively seek and source products from the market, correctly identify and sort core items, scrupulously dismantle and rebuild the product, and finally test it before it is packaged and sold. “It’s clear that remanufacturing will become a mainstream business in automotive segments,” concludes Rovelli. “As South Africa does not manufacture starters and alternators locally, this gives industry a way to remain competitive.” Web Address: www.zf.com/za

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AUGUST 2017 -

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SEPTEMBER 2017

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LABOUR

The saga of deemed employment While a recent Labour Appeal Court finding may bring finality to the controversial issue of deemed employment, the Constitutional Court may decide otherwise. Douw G Breed, a director at Barnard Inc Attorneys, Centurion, discusses the possibilities

I

n a recent article I focused on a controversial labour provision – deemed employment. The provision has been a contentious topic of discussion for some time and, in that article, the Labour Court’s finding in a matter involving Assign Services was dissected and discussed.

the employees of both the TES and the client for purposes of the LRA. In order to fully understand a TES, the principle should be defined as employees who work at the client of the TES for a period not exceeding three months.

However, following publication and, as anticipated, the finding was referred to the Labour Appeal Court (LAC) which ordered the original judgement to be set aside. Also, a review application was dismissed.

In certain circumstances, the three month period could be extended, for example, when an employee is on maternity leave for a period longer than the stipulated period or, if an employee is performing work in a category where the bargaining council / sectoral determination determines otherwise.

For purposes of understanding the new position taken by the courts, it is prudent to revisit Section 198A(3)(b)(i) of the Labour Relations Act (LRA). It is also essential to establish whether an employee earns above the threshold as determined in the Basic Conditions of Employment Act. Section 198A (3)(b)(i) of the LRA reads as follows: “For the purpose of this Act, an employee: (a) Performing a temporary service as contemplated in subsection (1) for the client is the employee of the temporary employment services in terms of section 198(2); or (b) Not performing such temporary service for the client is: (i) Deemed to be the employee of that client and the client is deemed to be the employer; and (ii) Subject to the provisions of section 198B, employed on an indefinite basis by the client.” The Labour Court distinguished between the following two positions: 1. Sole Employment Position: Temporary Employment Service (TES) employees are deemed to be the employees of the client only for the purpose of the LRA; 2. Dual Employment Position: TES employees are viewed and considered to be

54 SEPTEMBER 2017

In the Assign Services case, the Labour Court held that the Arbitration Award – in which the commissioner ruled that the “deemed employment provision” was one supporting the sole employer position – was reviewable and should be set aside. The Labour Court did not refer the matter back to the Commission for Arbitration and instead dealt with the matter in the specific forum. The Labour Court was of the view that the commissioner erred in his finding and that the “deemed employment provision” was one which supported the dual employment position. After much speculation regarding the outcome, the matter was referred to the LAC. The basis of appeal, was essentially, an issue concerning the correct interpretation of Section 198A(3)(b) (i) and the effect thereof. The LAC held that the main purpose of the introduction of section 198A(3)(b)(i) was to provide protection to vulnerable employees of the TES: It was of the view that those employees could, at times, be abused by the TES. It further held that protection offered against unfair dismissals and unfair discrimination should not be construed as support in favour

of the dual employment provision – employees employed by both the TES and the client. The purpose of the protection offered is to ensure that employees of the TES are not treated differently to employees of the client. The sole employer provision also restricts the TES to a pertinent temporary employment service and, consequently, the TES will remain the employer for so long as that the employee is employed in a definite temporary position or until the employee is deemed to be the employee of the client. It was reaffirmed by the LAC that the sole employer interpretation was in line with the main purpose of Section 198 and Section 198A as outlined in the memorandum that accompanied the LRA Amendment Bill as tabled in Parliament: “The amendments further regulate the employment of persons by a TES in a way that seeks to balance important constitutional rights. The main thrust of the amendments is to restrict the employment of more vulnerable, lower-paid workers by a TES to situations of genuine and relevant ‘temporary work’, and to introduce various further measures to protect workers employed in this way.” Operation of law gives effect to the employment relationship between the client and the worker so placed and, consequently, the dismissal of the worker will have no bearing on the employment relationship between the worker and the client. As a result, it is clear that the Act supports the position of the sole employer provision as this is in line with the purpose as contemplated by the LRA, thereby ensuring that vulnerable employees receive the required protection. Once again, this may (or may not) bring finality to this controversial issue. It could be anticipated that an application for leave to appeal to the Constitutional Court will be filed and, if leave to appeal is granted, the debate will continue.

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LEGAL EAGLE

Understanding lease agreements Whether you are a landlord or a tenant, make sure that the lease agreements you sign comply with South African law. Eloise Cilliers, an attorney at Barnard Incorporated, Centurion, explains why

C

ommercial lease agreements are often drawn up by landlords who use templates sourced from the internet and which may contain provisions which are not recognised by South African law. If you are landlord to such an agreement, you must carefully weigh your options before taking legal steps to impose the terms of a contract. If you are a tenant, all is not lost because, despite the signed written contract being in place, clauses may not be enforceable. Whether you are a landlord or a tenant, you must ensure that the contents of your lease agreements comply with South African law. If acting on invalid contractual terms, landlords may suffer the consequences of an unkind court judgement with a concomitant order of costs. In turn, if tenants are not aware of validity of terms, they may suffer damages by not utilising legal remedies available to them. There are various statutory and common law provisions applicable to contracts – but how would a person not educated in the intricacies of the law be able to identify invalid contractual terms? A good starting point would be to look for clauses which could result in court action and which usually include words or phrases such as “summarily,” “without notice” and “in its own discretion.” This said, not all contractual terms containing those phrases would be unenforceable. It must be kept in mind that it is a fundamental principle of South Africa’s legal system that no person is allowed

56 SEPTEMBER 2017

to take the law into his or her own hands. This principle is also true in the law of contract and is recorded in case law as far back as the early 1900s (Nino Bonino v De Lange 1906 TS 120.) If a contract allows a party thereto to take the law into his or her own hands – in other words to do that which only a court is allowed to do – the contravening provision is invalid. A contract cannot allow one party to be the judge of whether a breach of contract has been committed and allow him or her to act on that decision without first obtaining the go ahead from a court. For instance, without the authorisation of a court, a landlord cannot dispossess a tenant of a property or of a right incidental to the lease of that property. Courts will not accept such action and a deprived tenant will, in all probability, be successful should he or she approach a court for a restoration order. The correct procedure would be for a landlord to approach the court with regard to claims for damages, specific performance or eviction. In some instances, the Consumer Protection Act (Act 68 of 2008) also applies to commercial lease

agreements. Tenants and landlords need to familiarise themselves with provisions of the Act that may have an impact on their lease agreements. A consumer – as defined by the Act – includes small to medium size businesses, excluding juristic persons whose asset value or annual turnover, at the time of entering into the lease agreement, equals or exceeds R2- million. A supplier is a person who markets any goods or services and therefore – in terms of the Act – a landlord falls within the definition of a supplier. Since Sections 48 and 49 deal with unfair, unreasonable or unjust contractual terms, standard clauses in commercial lease agreements which limit the liability of landlords with respect to claims for damages by tenants – or any other terms which could be exceptionally favourable to the landlord – may be deemed to be unfair, unreasonable or unjust. It is advisable, therefore, that both landlords and tenants understand the contents of the contracts they enter into and educate themselves as to the consequences should they act in accordance with invalid provisions.

RMI4law members enjoy the benefit of legal advice from an attorney 24 hours a day. If you would like to join RMI4law, contact 0861 668 677.

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SEPTEMBER 2017

57


BUSINESS MANAGEMENT

Adapting to change How do small and medium sized business owners respond to challenges that technological as well as other developments appear to be forcing on them? Pieter Scholtz discusses some key points

I

watch with keen interest developments taking place in many industries – including the motor industry. The rate at which technological developments are shaping the future is almost mindboggling. These technological changes will have a profound impact on our businesses and how we run them, as well as on how we invest our time and hard earned cash in future. So, how do small and medium sized business owners respond to challenges that technological as well as other developments appear to be forcing on them? Some key points are worth considering: • Know when to embrace change We know the saying – the only thing that is constant is change. However, the rate at which change takes place today

is exponential. Knowing when to adopt to Working on your business requires you to plan time to be able to keep up with change is very important. developments as well as creating time for Not all change is good and business you to reflect on new developments and owners need to ensure that they are the impact they are likely to have on your keeping themselves abreast of major business. developments. Wisdom is going to be a critical component in deciding the • Employ the right people following: Many business owners are likely to find o Is your company leading change? it impossible to stay ahead of change. o Is your company an early adopter of A key strategy, therefore, is to employ change? people who understand what changes o Is your company applying a “wait are necessary to remain sustainably and see” approach to developments profitable. Next would be to free them up taking place? to work on opportunities to capitalise on developments. Each of these decisions requires careful thought as well as an understanding of In closing, developments within the motor the benefits and implications of each industry are going to have a profound approach. Under most circumstances it impact on consumer behavior. The will be beneficial to business owners if availability of Uber has already resulted in they seek counsel from external advisors a number of younger generation families to ensure that all factors are considered. moving from a traditional two-car family to a one-car unit. • Data explosion The amount of data available for Also, I have heard a number of people ask businesses today is growing exponentially. why they should spend a large sum now It’s no secret that 90% of all data that on new but older technology vehicles when exists today was created over the past two they could sit it out and jump into state-ofyears. For small business owners, having the-art cars when they become mainstream. access to all this data – or being able to analyse it – is not always possible. The key here is to keep an eye on trends and ask yourself how they impact your As a business owner, you need to make business model. Is there a gap that can be time to read articles that are relevant exploited? Working with an external coach to your industry or business. Create a or consultant will provide you with an file or folder where you can access this unbiased view of what needs to be done in information at a time that suites you best. the business.

Pieter Scholtz is the Co-Master Franchisor in Southern Africa for ActionCOACH, the fastest growing and largest business coaching company globally. Pieter and his partner Harry Welby-Cooke developed ActionCOACH across Southern Africa, which now boasts over 40 franchisees. He is also a certified, leading business and executive coach. He has successfully assisted countless business owners to significantly grow their profits and develop their entrepreneurial skills. www.actioncoach.co.za / 012 665 1015.

58 SEPTEMBER 2017

www.automobil.co.za


A COMMERCIAL VEHICLE SHOULD BE RELIABLE.

BUT WHAT DO YOU RELY ON, WHEN YOU NEED TO REPAIR IT?

MAHLE supports the Right to Repair Campaign. www.automobil.co.za

SEPTEMBER 2017

59


FAQs

The RMI’s experts answer your questions

Q. What is the minimum depth of tread required by law on a motor vehicle’s tyres? A. South Africa’s Road Traffic Act Regulations stipulate that, for a tyre to be considered legal, a tread pattern may not be level with a tread depth indicator – usually set at 1,6mm by tyre manufacturers. However, regulation 212 (j) (i) states that if a tyre is not equipped with a tread depth indicator, it must display across its breadth and across its entire circumference, a pattern which is clearly visible, and which has a tread depth of at least 1mm.

Be aware, though, that most reputable tyre manufacturers as well as motoring magazines have shown in tests that 1mm of tread on a tyre does not displace sufficient water to provide safe stopping distances on wet roads. In fact, tread depths of below 3mm have been found to increase stopping distances. The message is clear: do not drive vehicles with tyre tread that has worn close to minimum legal tolerances. It is highly dangerous!

Q. What is the difference between a Service Plan and a Maintenance Plan? A. A Service Plan is a non-insurance contract that is designed to cover the cost of your vehicle’s scheduled major and minor services as stipulated in your manufacturer’s handbook. It will not cover mechanical failure or anything other than the items needed for a standard service. A Maintenance Plan is a non-insurance contract that has been designed to cover your vehicle’s scheduled major and minor services, as well as maintenance and mechanical repairs required as a result of normal wear and tear.

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Therefore, for any tyre sold in South Africa that includes a tread depth

indicator, the former rule applies. For tyres without tread depth indicators, the 1mm rule applies.

Ctrack Fleet Tracking and Recovery offers everything you need to run a more productive fleet and save up to 20% on fuel and maintenance costs. 0860 333 444 • sales@ctrack.co.za • www.ctrack.co.za

60 SEPTEMBER 2017

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Head Office: Tel: (011) 466 6619 Fax: (011) 466 1034 Address: 40 Monte Carlo Crescent, Kyalami Business Park Durban: Tel: (031) 569 4141 Fax: (031) 569 2506 Address: Unit 7 Constantia Park, Chris Hani Road, Redhill, 1415 Cape Town: Tel: (021) 552 5569 Fax: (021) 552 5584 Address: Unit 2, 14 Esso Road, Montague Gardens, Cape Town Web Site: www.eurospares.co.za E mail: accounts@eurospares.co.za

TECH COLLEGE AD 210x130 2/15/17 8:30 AM Page 3 C

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MEMBERUPDATE

The RMI welcomes these new businesses into membership

Mem Trading Name

Street City

A

Mem Trading Name

Street City

Hi-Q Montana

Pretoria

AC Auto Services

Durban

Howard’s Mechanical Auto Electrical

African Spear Engineering Solutions

Durban

J

Auto Magic Alberton

Alberton

JBA Trading

Nelspruit

K

Auto Power Clinic Autorama Springbok

Springbok

B

Goodwood

Paarl

C

Kwa Mashu Fitment Centre

Kwa Mashu Marburg

Cape Town

Roodepoort Margate

Mokopane Panel Beaters

Mokopane

P

Wonderboom

G

Paarl Pinetown

Pathukwa Trading

Pretoria

Pelma Truck Repairs

Garage 10

Bellville

Cape Town

PGSI Group Head Office

Garden & Organics

Blackheath

Pro Acts Panel Beaters

Guardian Freight

Cape Town

Pro Tech Auto Recoveries

H Hi-Q Alberton

Alberton

Hi-Q Allandale

Pietermaritzburg

Hi-Q Kimberley

Kimberley

Polokwane

Pretoria Kempton Park Margate

Pinetown

Tjiane Twin Brothers

White River

Trailer Wize

Cape Town

Truck Rebuild Specialists

Quick Lane Tyre & Auto Centre

Witbank

Pietermaritzburg

V Volvo Truks PE

Port Elizabeth

Xpro Auto & Diagnostics Pretoria

Pretoria

Touch Up Trading

Q Quick Lane Silverton

Pretoria

The Rustman

X

With a membership of 7 500, the RMI provides a very effective collective voice that gives members considerable clout in negotiating better trading conditions. As the lead voice in the motor industry, the RMI is a member-driven organisation that constantly seeks solutions to concerns raised by members in the day-to-day running of their businesses.

Pretoria

Thabiso Auto Electrical

Pro-Tect Mkondeni

BENEFITS OF BELONGING

64 SEPTEMBER 2017

Tau Fleet Services & Trading Thavhela Holdings

Paarl Auto Clinic Panel-Rite Autobody Repair Centre

Fuel Dog Garage

Middelburg

T

Margate Panelbeaters & Refinishers

F

Centurion

S

Vereeniging

M

East London

Randburg

RSA Racing Superbike Shop

Suzuki Vereeniging

Pietermaritzburg

E L Auto Body Works

Rolling Dents

Smart Panel Shop

CSM Motor Sport

E

Centurion

Sfiso Auto Body Parts

LD Auto Sound

Maitland

Stanger

Revo Technik SA

Lalatladi Polokwane Bronkhorstspruit

DMB Auto Repairs

Ramzo Kuruman

L

Cosmos Auto Body Repairs D

Street City

R Rekyles Auto

Groblersdal

KZN Power Steering & Brakes

BP Paarl

Mem Trading Name

Durban

Xtreme Auto Clinic

Randburg

ADVERTISERS AUTOMOBIL - SEPTEMBER 2017 EDITION CLIENTS

CONTACT WEBSITE

PAGE

Abandoned Solutions

011 450 0550

N/A

32

Aer O Cure

011 444 6454

www.aerocure.co.za

OBC

Africa Automotive Aftermarket Solutions

011 879 6000

www.aaas.co.za

18,19 & 55

Audi Parts

086 0434 838

www.audi.co.za

40 & 41

Autocosmos Biz (Electrolog)

012 327 6210

www.autocosmos.co.za

64

Automobil Association Technical College

011 799 1068

www.aa.co.za

61

CDK Global

011 998 6000

www.cdkglobal.co.za

65

Ctrack

012 450 2222

www.ctrack.co.za

60

e-CAR

011 341 0445

www.e-car.co.za

26 & 27

Eurospares

011 466 6619

www.eurospares.co.za

7 & 61

GUD Filters

031 910 3111

www.gud.co.za

51

Gumtree South Africa

011 100 8600

www.gumtree.co.za

45

Highveld Garage Equipment

012 330 0540

www.hge.co.za

39

Jaguar Fleet & Business

012 450 4000

www.landrover.co.za

17

Kigima Auto Electrical Training Centre

012 327 2586

www.kigima.co.za

66

Mahle Aftermarket

+4911 501-13204

www.mahle.com

59

Merseta

010 219 3000

www.merseta.org.za

37

Moto Health Care

0861 000 300

www.motohealthcare.co.za

10 & 11

Motor Industry Staff Association

011 476 3920

www.misa.org.za

57

NUS Trading

011 706 4451

N/A

9

Probe Corporation

011 453 0924

www.probegroup.co.za

33

Robert Bosch

011 651 9600

www.bosch.co.za

15 & 23

Silver Falcon Trading

083 628 2288

www.hurricaneauto.co.za

62 & 63

Snap On Africa

031 569 7637

www.snapon.co.za

IFC

Spanjaard

011 386 7100

www.spanjaard.biz

29

Trysome Auto Electrical

011 823 5650

www.trysome.co.za

49

Volkswagen Parts

086 0434 737

www.vw.co.za

52 & 53

Willard Batteries

011 706 7184

www.willard.co.za

25

ZF Services South Africa

011 457 0000

www.zf.com/za

www.automobil.co.za

48 & IBC


NEVER LET ANYTHING COME BETWEEN YOU AND YOUR CUSTOMER With Mobile Service Advisor you can get a little bit closer to your customers.

Find out more visit: WWW.CDKGLOBAL.CO.ZA/MSA www.automobil.co.za

SEPTEMBER 2017

65


TAIL PIECE

Diesel under the microscope Though the global diesel engine industry is perceived to be under threat, the technology will continue to develop, according to a recent study conducted by a US-based market researcher

T

he global automotive diesel engine industry is currently in a state of flux. Major developments that affect the multi-faceted industry occur frequently, which makes the understanding of trends difficult, says Gleb Mytko, a senior analyst at US market research company Freedonia. He says that while many motor manufacturers have scaled back their diesel engine operations and have increased spending on electric model research and development, others have doubled down on diesel technology. “Most, if not all, of the uncertainty is due to emissions testing cheating scandals that have roiled the industry.” Mytko points out that in July, Germany ordered the recall of more than 22 000 Porsche Cayenne diesel models after inspectors working for the transport ministry found software that was used to mask nitrogen oxide (NOx) emissions. A short-term registration ban was imposed on the models. “The action represented the latest in a series of similar government

interventions in countries around the world that have put manufacturers in a negative light and which have called into question the commercial viability of automotive diesel technology,” he says. Mytko says that earlier in July, Daimler’s Mercedes-Benz subsidiary voluntarily recalled more than three million diesel cars in Europe in order to address concerns about emissions. “Software updates to be implemented by the company to fix the problem are expected to cost more than $250-million (about R3,37-billion),” he says. Despite the recall, Dieter Zetsche, CEO of Daimler, issued a statement that said diesel was worth fighting for due to its low levels of emissions and high performance. “Zetsche sees no reasons to forego the advantages of diesel,” says Mytko, pointing out that politicians and industry leaders in Germany – which is the leading supplier of automotive diesel engines globally – came together in the same month to try to save the country’s automotive diesel engine industry.

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“After the summit, participants announced plans to update the software of more than five million light motor vehicles to reduce NOx emissions. In the US, where diesel models account for a small share of light vehicle sales, GM plans to introduce oil-burning versions of two SUVs later this year. Mazda, too, will begin

to offer diesel versions of its bestselling CX-5.” According to Mytko’s research, gains for the diesel engine market will be largely driven by growth in China and other developing nations, where he expects production of motor vehicles to climb at a strong pace. He says the increasing use of more technologically advanced engines will also contribute to growth, with sales of diesel engines continuing to perform well through to 2020. “Global light and medium and heavy motor vehicle production is forecast to increase at a healthy pace during the next five years. In addition, diesel models are expected to capture market share from other types of light motor vehicles in a number of industrialising nations with less stringent emissions standards, such as Russia and Thailand. “Through 2020, a variety of high-end, better performing automotive diesel engines will be developed around the world, adding to market gains in value terms. ” Mytko adds that while world sales of agricultural, construction and mining equipment have declined in recent years, global product demand is expected to recover in the short term as activity grows in those sectors. “In response, manufacturers will ramp up production, generating additional diesel engine demand. . “As the world’s stocks of these machines expand, sales of aftermarket diesel engine products will grow,” he maintains.

Now Accepted

facebook.com/kigimatrainingcentre 66 SEPTEMBER 2017

www.kigima.co.za

www.automobil.co.za


Coming to the South African Whether he’s playing in his jazz band or IAMa manual in September writing for a new brake pad, Guido wants every audience to enjoy the 2017! same thing: a great performance. Tests This is Guido Orth-Gauch, Technical Author at TRW.

recorded by Guido show that our new Visit the ZF stand at friction coating cuts stopping distances Automechanika JHB on new pads by up to 7 metres. For a truly great performance, rely on True Originals.

Watch Guido’s story at: www.trwaftermarket.com/brakepads

TRUE ORIGINALS

www.trwaftermarket.com/brakepads ZF Services SA +27 11 457 0000 - @ marketing.grm@zf.com As part of ZF Aftermarket, every TRW part is built to meet the challenge, just like the

dedicated people around the world who bring them to you. Backed by a global network www.automobil.co.za of aftermarket experts, TRW products set the standards for safety and quality.

SEPTEMBER 2017

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Automobil September 2017