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Motor vehicle dealers in South Africa selling both new and used vehicles are well prepared for the reopening of sales following an announcement by the Minister of Trade, Industry and Competition, Ebrahim Patel. This is the confident message from Mark Dommisse, Chairman of the National Automobile Dealers Association (NADA). This organisation has more than 1,300 members and makes up 85% of all new vehicle franchise dealerships in SA.
“A limited number of personnel in the various dealerships have been preparing the facilities in terms of the stringent COVID-19 virus sanitation and safety rules since this was permitted, basically from Level 4,” explained Dommisse. “The new directive will permit the buying of new and used vehicles, trade ins and vehicle servicing. All arrangements with the dealerships, including test drives, will be by appointment,” says Dommisse.
Vehicle manufacturing, under strict limitations, has been permitted since 1 May and component and vehicle makers are ramping up production in terms of strict government regulations. Now they are able to sell these locally manufactured, as well as imported vehicles through retail channels in addition to exporting to destinations outside of South Africa.
“Dealers are a vital cog in the entire automotive ecosystem which includes interaction with a host of partners such as the finance houses and service providers including marketing support and vehicle transport companies. It is going to take some time to get all the systems and processes up and running, particularly as only 30% of employees are allowed on dealer premises from 13 to 23 May, after which the staff complement can be lifted to 60% until 6 June, when full staffing is permitted,” he added.
Initially the majority of interactions between dealer personnel and customers will be conducted digitally via the internet, eCommerce or telephone. Personal contact will be kept to a minimum and only by appointment in strict hygiene and social distancing conditions. Home delivery of vehicles with full sanitisation will be mandatory. Roadworthy assessment and testing centres will now be open to facilitate the sale of used vehicles.
The national lockdown has taken a heavy toll on all sectors of the local motor industry and saw retail vehicle sales in April plunge 98.4% compared to April 2019 with only 574 units reported as sold to the Department of Trade and Industry. The effect on built-up vehicle exports was massive too, with a fall of 97.3% and only 901 vehicles shipped. The automotive industry is not only a major contributor to the GDP – almost 7% in 2019 – but also a major taxpayer.
The majority of domestic consumption is driven by NADA and its members, so the longer the retail sector of the industry was unable to participate in the economy the more dire it made the situation.
“While we expect job losses in the sector, the effect on retail businesses would have been even more devastating if there had been a further delay in the issuing of a directive to permit trading. We are grateful that the dealers nationwide are now able to provide services to their customers and potential buyers, albeit on a limited scale at present,” concluded Dommisse.