Networking, Collaboration and Progress. These were the three overriding themes for the 2020 AutoMatrix Industry conference which was held on board the MSC Orchestra last month. Over 340 delegates attended the event, including body shop owners, representatives from NAAMSA, SAIA, RMI, various OEMs, insurers, paint and equipment suppliers and other service providers.
The conference format included keynote addresses from SAIA’s Themba Palagangwe; Mike Mabasa, CEO of NAAMSA and Jakkie Olivier, CEO of the Retail Motor Industry Organisation (RMI), as well as interactive sessions during which delegates were able to engage with various guest speakers, resulting in the creation of a platform for networking, collaboration and progress.
Delegates were also treated to quality entertainment and a host of sightseeing activities. That did not detract however from the important discussions between the various stakeholders.
RMIs Jakkie Olivier, focused very specifically on the current Motor Body Repair landscape outlining the South African Motor Body Repairers’ (SAMBRA) role and the challenges facing the MBR sector, specifically the difficulties in running a sustainable, profitable SMME business in the MBR sector. He touched on the current employment outlook – which is at a five year low. He said when it comes to employment, jobs are going to come from the small to medium sized businesses which will help drive the economy so this is definitely the sector we need to focus on.
“Lack of profitability goes hand-in-hand with slow or a lack of upskilling due to the cost of training interventions to the business. With continuing technological transformation in the sector there is a mismatch between labour available and the skills required,” says Olivier. He showed how the cost of compliance has a huge impact on commercial sustainability – with research showing that 23% of SAMBRA businesses having at some point considered closing due to compliance costs. He questioned the need to revisit statutory regulation within the industry with only 16% of SAMBRA businesses believing that statutory regulation pertaining to their business is relevant. Olivier said many SAMBRA business owners believe that they could be more compliant with equipment and waste management matters, but that budget and skills are the key barriers to improved compliance.
Pay Before Release (PBR) was also a hot topic of discussion. Olivier said that the MBR sector was the only sector not to have exercised its right of lien over vehicles repaired. “PBR is a necessity with delayed insurer payment and their poor payment administration having a negative effect on the business’ cash flows. These added to the “staggering differences between labour rates paid between MBR and OEM-appointed motor dealers, both of whom require substantive investments to their business’. The result is that the MBR sector can no longer afford to pay artisans a wage that encourages entry into the sector or upskill their current workforce. “It is so critical we have fair, unrestricted and competitive business practices within the MBR sector.”
On a closing note Olivier stressed the importance of raising the SLA labour rates for the MBR sector. He said reviews 3 months prior to annual SLA renewals; timeous payments to SMME’s combined with reduced compliance and regulatory costs, and write-off values returned to more reasonable levels of around 75% will go a long way to sustaining this very important growth sector.
Neal Jackman, Director of AutoMatrix said the format of the conference proved to be a huge success and confirmed they had received numerous requests for a similar session to be repeated on a more regular basis. “We brought together the three key representative industry pillars – membership through RMI; OEMs through NAAMSA and the insurers through SAIA. The feedback from most of these leaders in the automotive industry indicates this kind of platform is vital to address key issues impacting the different sectors. Amongst others we looked at the future state of the industry, the impact of electric cars, transformation issues, Insurer procurement policies, write-offs, training, body shop optimisation, paint systems, profitability and others. The big advantage was individual business owners were able to attend and get a holistic view of the challenges and opportunities,” concludes Jackman.