Dear NADA Member,
Key Guideline Changes and Updates to the Guidelines for Competition in the South African Automotive Aftermarket
On the 27th of September 2024, the Competition Commission of South Africa published its revised guidelines on the automotive aftermarket following discussions with key industry role players including NADA.
In May 2024, the draft guidelines proposed a series of sweeping changes to the 2021 version and NADA provided detailed insight into our concerns over several of these. While some changes were incorporated in the September Guidelines, several of the more contentious elements were omitted.
Even in the final version of the Guidelines, certain clauses required further clarification from the Commission. Following consultations with our attorneys, these concerns were submitted to the Competition Commission for review and further amendments were made, with an updated document being released on the 13th of November 2024.
Below is a detailed summary of the salient amendments to the Guidelines as applicable to dealerships.
Effective Date of the Guidelines
We are pleased to confirm that the effective date for implementing the updated Guidelines has been revised to 27 March 2025. This extension allows all stakeholders sufficient time to develop and execute compliance plans.
Training on Competitively Sensitive Information (Clause 9.3.3(d))
- The term “commercially sensitive information” has been updated to “competitively sensitive information” in line with the Guidelines on the Exchange of Competitively Sensitive Information under the Competition Act.
- Since 1 July 2021, OEMs and Approved Dealers were required to conduct internal training to ensure employees understand how to handle competitively sensitive information responsibly.
- The revised guidelines enhance this requirement. The Commission has clarified that training should focus on employees with access to competitively sensitive information, including dealership executives and staff who interact directly with customers.
· Revised training to applicable staff members should be complete by 27 March 2025.
Unbundling of Maintenance and Service Plans for Used Vehicles (Clause 11)
- The updated Guidelines now apply to new, demo, and second-hand vehicles, requiring the clear separation of maintenance and service plan costs from the vehicle’s price at the point of sale.
- The Commission is insistent that OEMs, Approved Dealers, and financiers share the responsibility of ensuring customers are fully informed about the cost breakdown of vehicles and any Value-Added Products (VAPs) regardless of the vehicle being a new, demo or second-hand vehicle.
- Approved Dealers must ensure they have accurate information about maintenance plans, service plans, or VAPs associated with second-hand vehicles they sell, as transparency at the point of sale is essential for consumer protection.
· In the event of an OEM or 3rd Party being unable to transfer a service or maintenance plan to a replacement motor vehicle in the instance where the motor vehicle is written off by the Insurer, the OEM or 3rd Party must inform and notify the client of such.
Part Numbers to be included on quotations (Clause 12.2.3(k))
- Clause 12.2.3 requires that part numbers must now be included on all quotations and invoices
· Although the obligation to provide part numbers on quotes and invoices lies with the OEM, it is the Approved Dealer who will be providing such to clients and therefore we recommend that members consult with their OEMs on this key amendment.
We hope these updates clarify the changes and ensure a smooth transition for all. Thank you for your commitment to compliance and customer transparency.
Gary McCraw Brandon Cohen
Director Chairperson
NADA NADA
