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Category: SAMBRA

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Why do modern cars crumple up when they crash – A good thing or not?

Have you ever jumped from a significant height with straight legs? It’s not a comfortable feeling is it? That’s because there’s nothing to absorb the shock that’s been created, and so that shock has the potential to cause great damage. That’s why bent legs help: they help to absorb the shock.
The same principle applies when you have a car accident. Of course, stepping out of a vehicle that looks much like a crumpled tissue is sure to make you wonder just how safe you are. Most of us would feel more secure if we believed we had the protection of a rigid, unyielding tank. But, in fact, the opposite is true.
According to Richard Green, National Director of SAMBRA (South African Motor Body Repairers’ Association) an association of the Retail Motor Industry Organisation (RMI), most car manufacturers develop crumple zones on automobiles because they help to absorb the shock of an impact and to make sure that the force of the impact is absorbed within the crumple zone, rather than being transferred to the safety cell which surrounds the driver and passengers.
This is a delicate balancing act. Green points out, “On the one hand, a car’s frame has to be strong enough to resist a certain amount of force, but too much resistance may lead to injury for the car’s inhabitants. Getting this balance right means considering the size and weight of the vehicle. You also need to think about the force that may arise if a car collides with a moving object as opposed to a stationary one. All of these dynamics must be taken into account,” Green says.
He adds that it’s not all up to the vehicle manufacturer. The driver and passenger also have a role to play, by ensuring they are wearing seatbelts. “If not, the idea of a safety cell is compromised,” Green explains. “No matter how carefully a car’s crumple zones are designed, it’s inevitable that some force will remain unabsorbed. However, when you wear your seatbelt, you make sure that this is mitigated as far as possible.”
This raises another question. If crumple zones make sure that most of the force of impact is absorbed, or at least directed away from those inside the car, why not make the whole car a crumple zone? The answer to this, says Green, is because the ceilings, floors and doors folding on the passengers would spell certain disaster. “That’s why the crumple zones are usually located at the front and back of the car, while the passenger cabin is far more rigid. Not that passengers are completely exposed or vulnerable, though. Where crumple zones handle external force, airbags ensure the driver and passenger do not make contact, upon impact, with the rigid dashboard or steering wheel inside the car,” he says.
The capsule where inhabitants sit, the safety cage, is also reinforced with pillars running the length of the car (from floor to ceiling), side impact bars, the roof and the floor itself. These features ensure that the safety cage maintains its shape in the event of a collision.
Crumple zones have, in fact, been a key part of car design since as far back as 1932, when they were first introduced by Bela Barenyi, an engineer for Mercedes-Benz. Although cars have obviously changed and evolved dramatically since then, Barenyi’s concept of a vehicle sectioned into a rigid central zone surrounded by the front and back crumple zones remains unchanged.
Numerous tests have shown that a crumple zone can stop a car upon collision in 0.2 seconds as opposed to 0.1 second if the car, theoretically, did not have crumple zones. “In this scenario, the crumple zone therefore literally cuts the force of the crash in half. All told, it means that you really have nothing to worry about if your car is severely damaged in a crash. Although it seems very wrong that an expensive item should fold in on itself in this manner, your car is doing exactly what it should – and making sure that you remain as safe as possible,” Green concludes.

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SAMBRA applauds insurers for proactive support to motor body repairers

The South African Motor Body Repairers’ Association (SAMBRA), whose members are responsible for repairing over 80% of all insured repair claims in the country, has applauded the proactive measures announced by Hollard Insure and Momentum Short Term Insurance (MSTI) this week to relieve pressure on the highly stressed automotive aftermarket.
Richard Green, national director of SAMBRA, an association of the Retail Motor Industry Organisation (RMI), put out an urgent appeal to the insurance sector, through SAIA at the end of March requesting alternate payment and fee arrangements for at least the next 30 days.
Green says Hollard Insure responded yesterday by implementing several solutions for the motor repair fraternity. Marvin Tshezi, Head: Claims Procurement for Hollard Insure said that they were particularly sensitive to SME businesses that are exposed to cash flow risks, amplified because of the current situation.”
Cash flow relief initiatives from Hollard to support motor repairers include paying invoices for all completed jobs where the clients have not yet collected their vehicles; offering interim payments for all repairs that are currently in progress, subject to work in progress reviews and lastly, giving repairers’ the option for Hollard to pay their parts suppliers directly without impacting the repairer’s commercial arrangements, margins and profitability.
Momentum Short Term Insurance has also announced interim relief for the motor repairers offering liquidity assistance and volume discounts. They will be suspending settlement discounts in totality on all repairs that have not gone through final costing, for the next three months. In a notice to repairers’, MSTI said they realised that the lockdown would mean a sharp decrease in claims volumes and acknowledged that even post lockdown they expect, in all likelihood, to see a staggered approach for people returning to work, which may also impact claims frequency. MSTI confirmed that they were willing to engage with MBRs on an individual basis and make available 50% of the initial assessment costs upon proof that the vehicle is in the repairers’ workshop and parts have been ordered.
Green says if other insurers can follow suit, the industry will be in a much stronger position to ensure the sustainability of its businesses’ that are all predominantly small to medium-sized businesses. “Our discussions with the insurer sector are promising and we look forward to further engagement with some of our other big insurers,” says Green.
“We have always spoken about the critical need for collaboration in our industry and this has never been more critical as we navigate through this uncertain period and into the future,” he concludes.

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Outlook for SAMBRA

There will be some significant changes for the motor body repair (MBR) sector in 2020.
It’s not going to be business as usual says Richard Green, National Director of the South African Motor Body Repairers’ Association (SAMBRA), a proud association of the Retail Motor Industry Organisation (RMI) and the custodian of industry standards and sustainability in the sector.
SAMBRA, whose members are responsible for repairing over 80% of all insured repair claims in the country, interface with all the key players in the formal MBR sector including short term motor insurers; insurer intermediaries; OEM approval programmes; OEM and alternative part suppliers; paint and equipment suppliers and MBRs servicing that market.
Green anticipates a decline in intermediary participants in the short term insurance sector and an increase in direct motor insurance – potentially more effective business partners than intermediary-driven insurers.
“Direct insurance models better suit our industry, as the current system is administratively ineffective and expensive,” he says.
He also predicts OEM approval programmes will remain an integral part of the industry, though the form may change dramatically. “We must not lose the connection between our two industries, as the connection is essential to ensure continued skills development without it repair quality will suffer. SAMBRA will continue to focus on cost reduction of these programmes,” he says.
If OEMs wish to maintain the current part supply levels, they will need to seek more effective and production efficient mechanisms. “The cost of premium vehicle parts is currently not sustainable and alternative parts manufacturers have already made significant inroads into the genuine parts market. Unless OEMs produce creative and effective alternatives, the erosion of their market share will continue. An additional impact is the increase in effective repair technology which allows MBRs to repair panels that were previously replaced.
SAMBRA’S right of lien will, in our view, negate insurers’ parts purchase/ payment strategy,” says Green.
In the paint and equipment sector, more local production is a necessity as only a small percentage of paint and equipment supplied to the MBR market in South Africa is locally produced. “There has never been a better time to be in the collision repair industry – because of the opportunities arising through consolidation. There’s a five-year window, and the clocks have already been ticking for two or three years.
“OEMs need to encourage competition in the sector by approving a wider range of paints for application to their vehicles,” says Green.
Government needs to look at encouraging investment in this industrial sector. A fair, unrestricted and competitive business environment in the MBR sector will grow small businesses and stimulate employment. “As a sector we strongly reject any bias, no matter what form it takes and will robustly oppose any form of unfair business practice,” says Green.
But business growth won’t happen in the large MBR business sector. “We believe the real growth opportunity lies in small business sector that can remain agile in service offering, and will, in future, be multi-faceted under the same ‘roof’ focussing on Non-Structural Repair (NSR) MBR work and allied services. As an industry we are committed to working tirelessly with all of our business partners to ensure a sustainable trading environment.”
The MBR industry will need to regroup, regain sector independence and focus on production efficiencies by developing skill and using of best available repair technology to maximise profit margins. “We owe our customers the best possible level of repair quality and service and we owe ourselves the correct levels of ROI. We will achieve this by declining to work at unsustainable rates; by securing working capital by exercising our right of lien and by eradicating the senseless invoice discounting practices,” concludes Green.

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B-BBEE due diligence process creates additional strain on small business suppliers

Inconsistent vetting procedures and application of BBBEE rules within the insurance sector are creating problems for many smaller business suppliers within the motor body repair sector.
Richard Green, National Director of the South African Motor Body Repairers’ Association (SAMBRA), a proud association of the Retail Motor Industry Organisation (RMI), representing over a 1,000 motor body repairers and responsible for repairing over 80% of all insured repair claims, says these vetting inconsistencies need to be addressed.
Green says SAMBRA fully respects that if the requirement of the insurer is a certain level BBBEE score, members will utilise the services of specialists to create a programme that ensures that such a level is met, irrespective of the turnover or size of the business.
“These structures are all constructed utilising the directives of the current Act and verified by accredited agencies. However, we are still seeing many instances where these small businesses are simply being excluded from certain insurer’s work flow, whilst the same businesses are accepted by other role players in the industry and even by government itself for procurement purposes,” says Green.
Green says the issue is not the criteria being stipulated by the insurers. “A company is allowed to set its own criteria as that is the nature of a free-market business, but there needs to be a consistent application of B-BBEE rules so as not to be arbitrary. The real issue is therefore that insurers seem to set their own rules over and above the B-BBEE thresholds. This not only creates uncertainty, but also unnecessary additional costs for MBRs to try to comply with.”
The situation motor body repairers find themselves in is not dissimilar to the one car rental companies found themselves facing from the Airports Company of South Africa (ACSA). In that particular case the Imperial Group, which rents cars under the Europcar and Tempest brands, successfully challenged ACSA’s rental rules in the high court. The Supreme Court of Appeal ruled against ACSA saying “the Airports Company of South Africa (ACSA) cannot make up its own black empowerment rules” and said while it is rational to set targets to promote transformation, ACSA seems to have set its targets arbitrarily.
Green says small businesses on the receiving end of these practices are significantly compromised financially when they are excluded from the supply chain of bigger companies. This is exacerbated by the fact that they are also financially out-muscled should they opt for legal action. ”It is not a good strategy to lock horns under these circumstances as no court can force a client to buy from the small business even if the small business wins such a legal battle. It would be a case of winning the battle but losing the war.
“It is concerning to see that many SAMBRA members, even once they have taken expert opinion and have been verified by certified verification agents, are still regularly subjected to extreme scrutiny and excluded from work allocation.”
As an important custodian of industry standards, SAMBRA appreciates that specific business circumstances may vary from one business to another. “We encourage our members to obtain very specific guidance from a qualified and experienced B-BBEE consultant. Once that has been done surely then the outcome, as it is reflected and verified, should be respected by ALL insurers? There needs to be a level playing field with one set of rules everyone adheres to.”

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Making support for small business a priority

The forecast for growth in the South African job market for the first quarter of 2020 has hit a five-year low according to ManpowerGroup SA’s latest employment outlook. Payroll expansion is expected to be a mere 2%. Small businesses are struggling more than ever to stay afloat, while they are the most probable sector to take on unskilled labour.
Against this sombre backdrop, the South African Motor Body Repairers’ Association (SAMBRA) is concerned about the challenges facing the Motor Body Repair Sector, which is in an even more precarious position than it was 10 years ago. Without an absolute focus on growth, this will not change.
“What has changed in the Motor Body Repair sector however, is that there has been a substantial shift at business partner level toward a consensus-based business relationship, especially with the insurer sector and this is really positive,” says Richard Green, National Director of SAMBRA, a proud association of the Retail Motor Industry Organisation (RMI).
Green says SAMBRA and many of its alliance partners have, for a long time worked hard within varying forums to establish and empower large numbers of small black-owned businesses within the MBR sector. He says, regrettably the forums engaged in over the last 20 years have morphed in form, but delivered very little direct benefit to the intended recipients. “The reason, I believe, is simple,” says Green. “We are all guilty of staying in our comfortable cocoons! We talk the talk with the best intent but few organisations have sacrificed, collaborated unselfishly and delivered anything of real lasting value.
“Owning and operating a small business in the formal regulated sector is tough and the current failure rate high, but to ignore the importance of growth for small business in South Africa is folly. Only through maintaining and developing those we have and establishing many more, will South Africa and South Africans prosper,” he believes.
For 2020 Green says the corporate and government sector will need to adopt a far more unselfish, collaborative and transparent approach. “We need to embrace socially responsible capitalism. Big businesses need to convince shareholders to accept lower share value growth, at least for a period. Tremendous contributions are required by corporate SA to grow the pyramid base of small business service providers, which could in turn employ many thousands of South Africans. Without this mindset, the future is very bleak.
“We have all developed cocoons, thinking we are protecting our jobs, our businesses, and families but it is time for a sincere mindshift,” he says.
This will only happen if there are some significant changes, starting with the setting of fair and ethical standards for entry into the sector. Green says this must include compliance to a universally accepted accreditation system but must not include restrictive insurer panels of any sort. “We must be able to open all manufacturer approval programmes to any qualifying business so that we can truly honour client choice within a communication environment. Clients in turn need to be well-informed, especially regarding the pitfalls of poor service provider choice.”
Green says businesses need to do everything possible to eradicate unnecessary or excessive costs, be they capital or administrative in nature, and make small businesses’ invoices a key priority. “Corporates need to make prompt payments to small business and remove any barriers to achieving the goal of access.
“Finally, on skills development, we need to ensure that initiatives are accessible to all, using technology to extend that reach and place a long term focus on developing skills and enabling those newly-skilled individuals to gain entry into the market.”
He confirmed SAMBRA’s commitment to working tirelessly with its members and to increase their business efficiencies substantially so that their service offering contributes to excellent service, repair quality levels and the removal of any unnecessary costs.
“South African business, and the MBR sector in particular, is positioned to either fail dismally or succeed tremendously in their contribution to the growth of small business in SA,” concludes Green.

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The future of the South African Motor Body Repair industry

Anyone currently active in the Motor Body Repair (MBR) sector, who has their head buried in the sand thinking they can continue to do business as usual, will probably be out of business in three years. This applies to each of the key players in the formal MBR sector including short-term motor insurers; insurer intermediaries; OEM approval programmes; OEM and alternative part suppliers; paint and equipment suppliers; and MBRs servicing that market.
This was the opening message from Richard Green, National Director of the South African Motor Body Repairers’ Association (SAMBRA), a proud association of the Retail Motor Industry Organisation (RMI), at the 2019 SAMBRA conference held at Emperors Palace this month.
“Short-term motor insurance will see a rapid decline in intermediary participants. MBRs fear the increase in direct motor insurance, yet they are potentially more effective business partners than intermediary-driven insurers. Direct insurance models better suit our industry, as the current system is administratively ineffective and expensive.”
“OEM approval programmes will remain an integral part of our industry, though the form may change dramatically, we must not lose the connection between our two industries, as the connection is essential to ensure continued skills development – without it repair quality will suffer. SAMBRA will continue to focus on cost reduction of these programmes,” says Green.
Green says for part suppliers, if OEMs wish to maintain the current part supply levels, they will need to seek more effective and production efficient mechanisms. The cost of premium vehicle parts is currently not sustainable and alternative parts manufacturers have already made significant inroads into the genuine parts market. Unless OEMs produce creative and effective alternatives, the erosion of their market share will continue. An additional impact is the increase in effective repair technology which allows MBRs to repair panels that were previously replaced.
“SAMBRA’S right of lien will, in our view, negate insurers’ parts purchase/payment strategy,” says Green.
In the paint and equipment sector, more local production is a necessity as only a small percentage of paint and equipment supplied to the MBR market in South Africa is locally produced.
Government needs to look at encouraging investment in this industrial sector.
“South Africans can produce goods locally, supply our local market and import to the same international markets we currently buy from,” says Green. “Our OEM counterparts already do so.”
OEMs also need to encourage competition in the sector by approving a wider range of paints for application to their vehicles.
The MBR industry will need to regroup, regain sector independence, focus on production efficiencies by developing skill and utilisation of best available repair technology to maximise profit margins. “We owe our customers the best possible level of repair quality and service, and we owe ourselves the correct levels of ROI by declining to work at unsustainable rates; by securing working capital; by exercising our right of lien; and by eradicating the senseless invoice discounting practices,” says Green. “An industry built on a foundation of exclusionary business practices will either collapse or change dramatically and forever. Qualifying accredited MBR businesses have been precluded from gaining access to market mainly through protected minimum membership of some OEM approval programmes and almost every insurer supplier listing. This cannot continue.”
A fair, unrestricted and competitive business environment in the MBR sector will grow small businesses and stimulate employment.
“Business growth won’t happen in large MBR business sector. I believe the real growth opportunity lies in small business sector that can remain agile in service offering, and will, in future, be multi-faceted under the same ‘roof’ focussing on NSR MBR work and allied services,” concludes Green.

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Labour rate inequality threatens MBR sector viability and employment

The historic practice of issuing Motor Body Repairers’ insurer Service Level Agreements (SLAs) with outdated labour rates is creating havoc in the Motor Body Repair Industry and threatening not only growth and employment, but the sustainability of the entire sector.
Richard Green, National Director of the South African Motor Body Repairers’ Association (SAMBRA) says, “If one extrapolates the labour rates offered some 17 years ago by 7% per annum, the current rates are at least 38% lower than they should be. This is a result of insurers either not increasing rates at all, or not increasing rates when the wages of workers are increased annually by an agreed negotiated margin,” he says.
An independent study among the dealerships of the major manufacturers in South Africa to determine the current labour rates charged by dealers underscores this problem and has confirmed staggering differences between the labour rates paid by insurers to members of SAMBRA and those commonly paid to Original Equipment Manufacturers (OEM)-appointed motor dealers.
Green says the study, which uses historically collected and collated labour rates, accurately reflects that the labour rates dictated by insurers in South Africa via SLAs with SAMBRA members, their appointed intermediaries and the other service providers working for those intermediaries, are in fact three times lower than the labour rates within the OEM dealers. The offer from insurers is on average R280 per hour to a SAMBRA member. The same offer to an OEM appointed dealer network is at least three times higher at approximately R840,00 per hour.
“The situation is further exacerbated when SAMBRA members are ‘asked’ to ‘discount’ the total value of their invoice further by between 2.5 and 10%. This discount equates to 20-30% of the gross profit of each repair,” says Green.
When one considers both sectors are operating in the same automotive industry; both are highly complex involved in repairing high-tech vehicles; both require substantive investments into their service/repair departments and both are dealing with quality and professional repairs (whether it be mechanical repairs, body and accident repairs) for increasingly demanding customers, it is difficult to rationalise the large price differential? “Why is the MBR sector treated differently?” questions Green. He says the absolute minimum rate in the MBR market should be at least R350,00 per hour.
SAMBRA represents almost 1,000 motor body repair businesses across South Africa delivering vehicle repair services for over 80% of all insured repair claims in the country.
Green believes the current rate difference is not sustainable. “It does not align expectations with the actual cost to deliver the type of service required.”
He says it is not SAMBRA’s intention to cause client discomfort at all, but rather to bring these two umbilically-linked industries of MBRs and insurers together to ensure equitable terms are introduced that will allow for the continued sustainability and growth of the sector. “It is SAMBRA’s responsibility to ensure a vital part of the automotive sector remains sustainable into the future. This necessitates a more forceful approach to save jobs and level the playing fields,” concludes Green.

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Promoting inclusivity in the motor body repair industry

At a time when there is increasing pressure on the retail motor industry to transform, SAMBRA, the South African Motor Body Repairers’ Association, a proud Association of the RMI, have just released its latest BBBEE stats showing of its total membership 94% hold a BBBEE ranking of between Level 1-4. Significantly, 51% of these members hold a Level 1 or 2 BBBEE ranking.

According to Richard Green, SAMBRA National Director, SAMBRA has been actively driving to open up the market to historically disadvantaged individuals by removing barriers to entry. This drive is supported by the Automotive Code of Conduct which encourages inclusion into an OEM network of motor-body repairers and encourages specific measures to provide the necessary subsidisation of capital, facilities, tools and equipment and training.

Green says opening up access to insurer supplier listings and OEM approval systems will go a long way to addressing this issue and is in fact critical to all businesses within the sector, as is the funding. 

At present there are approximately 120 black-owned and registered businesses within SAMBRA that require substantial assistance to graduate into the formal sector and this can only be achieved with substantial assistance in terms of finance and business management incubation. There are at least another 1,200 that operate outside of registered associations such as SAMBRA.

The challenge is always bigger for these small formal businesses that supply services to the insurance industry. “Remember that only approximately 30% of the vehicle car park in SA is insured. So the formal MBR sector all chase that business. This is complicated by the fact that insurers and manufacturers restrict the size of their ‘panels’. Small black businesses, fully compliant with set standards, find themselves being precluded from accessing business just because the insurers and manufacturers say they have ‘sufficient’ suppliers in an area. SAMBRA argues that: “surely if I am prepared, as a business person, black or white, to accept the investment risk and comply with accreditation criteria set by insurers and manufacturers, it is restrictive business practice to preclude me from servicing my clients?”

Current businesses, that have in some cases spent 20 to 30 years cultivating loyal clients, are precluded from doing so simply because the MBR business is not on the manufacturers approved listing or insurer supplier listing!

“We are developing a model within which corporate, state, quasi state and other related entities like the AIDC which is in a position to add value by financing new entrants can all participate. Presently, these entities do not collaborate with one another or seek out the experience and market knowledge of organisations such as SAMBRA to ensure the available resources are spent wisely. I have personally seen many millions of rands wasted and this can be avoided by using the collective wisdom and resources wisely,” says Green.

SAMBRA, in collaboration with SIYAKHA will hold an Enterprise Development conference at Emperors Palace on Thursday 17 October and it is hoped that the participants will emerge with a plan to achieve the ESD goals within the MBR sector.

“SAMBRA will continue to transform and develop black business owners in the sector but will need support from the industry to sort out problems with ownership and preferential procurement,” he concludes.

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