Motor Industry News
By Steve Kessell, Operations Director, Collision Repair Association of South Africa (CRASA)
Comments from CRASA on the recent events in the industry regarding a Santam procurement consultant resigning amid pressure from the panel-beating industry.
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Filum Ho, who was recently appointed as Santam’s procurement consultant, resigned with immediate effect on Wednesday evening (31 July) after collision repair associations and a political party said that his appointment might be a conflict of interest. This stemmed from Ho’s stake in Autoboys – a supplier of aftermarket spares and glass – and his stake in Apollo Studio – licence holder for GT Motive, a quotation system for vehicle repair both a competition issue raising conflict of interest. Implementation roll out within Santam of these platforms are the raised concerns. Through extended testing this equates to around 20% reduction in cost of claim without justification. On this premise industry will collapse and cease to exist in any form of regulated compliance.
He blamed a handful of so-called individuals for the large protest action that was to come against Santam asking for his resignation. This market directive of work steering was never made mention of and neither was the major point of driver safety and quality standards in automotive repair. The claim that non-transformed mega workshops were to blame for this action is unfounded and misses the point completely. All the body shops – no matter what size, but especially the larger ones – have to conform to BBBEE regulations to receive direction of spend by Santam and other short-term insurance companies in South Africa.
The end-goal needs to be addressed, and the blame game must fall to the wayside. The technology explosion already seen in today’s vehicles, and those still to come, cannot be repaired with poorly trained technicians and sub-standard equipment. Vehicle repair must be done by competent professionals to get a vehicle back to its pre-accident condition and ensure that all safety critical equipment like airbags, lane-assist and all the other necessary safety features that are included in cars today, are able to work in the event of future accidents. Vehicle manufacturer warranties, the most critical related to liability also need to be taken into consideration if the vehicle is still under warranty as well.
Recent media comment from Mr Ho stated “My appointment as a consultant at Santam was never simply about driving cost savings. It was to help Santam leverage emerging technologies and [about] redesigning business processes to be more efficient.”
Efficiency and effectiveness is the primary outcome of damage quantification against correct identification of part numbers and unit cost together with prior determined factual labour time work units to undertake restoration where an element of sustainable margin is earned for business continuity. With respect, GT Motive has a long way to go in assurance of vehicle model support, correct value on paint and the allowance of fair repair time without the need for unwarranted admin burden and delay which gives rise to unnecessary cost. Procurement direction to HDI operators is a simple allocation and how will software achieve this outcome over logical sense.
Further Mr Ho claims a 43% gross margin earned on the Santam motor book in the latest media release. When has a sustainable exercise been undertaken on Motor Body Reparier (MBR) earnings to prove fair and equitable income needed for equipment investment and most importantly skills training, lacking serious consequence in the body and panel repair industry?
Where does the liability of safety stand? With the repairer, and as such, they should be enabled to do their job and not have to worry about political and vertically integrated money-grabbing opportunities of big business, who already make more than their share in profits from the motor industry pie.
Sadly the safety of the customer comes last and not first, as it should, in this narrative. Industry professionals have deemed it just another profit grab against the market. Do the insurance industry understand the rights of consumers and “fix right first time” with all the new technologies or is there a complete disconnect?
Further communication about the Collision Repairers Association of South Africa (CRA) made by Mr Harris of SAARAA, about the lack of transformation across the body shop industry is also without foundation.
The industry should have kicked up more of a fuss a few years ago when Santam first introduced its procurement policy with Autoboys. There were already a plethora of small parts operators from the previously disadvantaged sector, able to step into this space. At which point does BBBEE become enrichment and not empowerment? With a nett profit of R4 billion posted by the short-term insurer – more than the entire collision repair industry makes altogether – perhaps we should follow the money trail to find out more.
As a postscript, we need only to look at the RT46 campaign, where Wesbank had to stop giving vehicles to small businesses for repairs as it was taking too long for the cars to be restored, and then sub-standard work was seen on top of this time frame. SAPS had to ban small scale panel beaters from repairing state vehicles as police stations were without vehicles for months when taken for mechanical or repair problems. When will we learn our lesson?
A customer doesn’t care about BEE points when they get their vehicle repaired. They only want to know that it’s safe to drive and won’t affect their resale value and warranty. Let’s stop dancing around the race card and address the truth – who will have blood on their hands if the vehicle is in another accident and hasn’t been repaired correctly due to nominated service providers, be it parts supply, quotation or repair? Will that family member care when they stand next to the body about to be buried? That’s how serious this is! Money over the value of life.
In North America, you are able to see that insurers across this huge market, have been halted for work steering and using dominance in that market place with around 10 new pieces of legislation now in place for various States. These changes have been made in 2023 and 2024. We should take cognisance of these positive changes abroad and in turn adopt them here on our own soil. Something has to be done to protect the South African customer at the end of the day.
There is, and always will be, a relationship between collision repairers and the insurance industry. The question should be – have we lost our moral compass in the pursuit of pleasing share-holder’s profits at all costs?
Article Credit to Auto Refinisher.
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