The motor dealer’s voice

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Hand giving a car key. Auto repair service.

The National Automobile Dealers’ Association (NADA) is a well-known and well-respected voice for motor vehicle dealers in South Africa. Gary McCraw, the National Director, explains some of the association’s key objectives and activities

The National Automobile Dealers’ Association (NADA) represents and promotes the interest of almost 1 360 franchise and pre-owned motor vehicle dealers in South Africa.

The association’s priorities and objectives are identified and set via a well-established operational structure consisting of regional committees, sub-committees and task teams which report into the NADA Motor Retailers’ Forum and NADA National Executive Committee.

Many dedicated motor vehicle dealers and executives give up their valuable time to serve on the NADA structures, thereby ensuring that key critical issues which impact the retail motor vehicle dealership business environment are proactively addressed for the collective benefit of all members.

NADA would like to take this opportunity to sincerely thank all these individuals for their ongoing service to the association and the industry in general – their contributions are much appreciated.

Dealer business conditions

The motor vehicle retail business in South Africa is dynamic and highly complex, and business conditions are constantly evolving – made even more challenging given the increase in regulatory compliance which dealers have had to factor into their daily operations.

Unfortunately, over regulation has added unnecessary additional costs – which can no longer be absorbed – to motor vehicle dealers’ financial operating models. Regrettably, those costs have been passed on to the consumer, thus making motoring more expensive for the man in the street.

Given the recent political uncertainty and its negative impact on the South African economy, motor vehicle dealers are finding trading conditions extremely tight. They are having to maximise every opportunity to ensure that they remain financially viable and in a positive position to service a customer base whose expectations are ever increasing.

NADA is of the view that motor vehicle dealers are resilient and, by managing their costs and capitalising on every business opportunity over the next 12 to 18 months, they will emerge from this difficult period both stronger and leaner – just as they did during the 2009 economic crisis.

The NADA vision and role is to contribute to the growth, sustainability and profitability of motor vehicle dealer members by addressing non-competitive collective critical issues on their behalf, thus ensuring that the economic environment remains conducive to carrying out business.

Stakeholder relationship

NADA, over many years, has established extremely good working relationships not only with key industry stakeholders in business and labour, but with various government departments.

In this regard, the association has been successful in influencing changes to various pieces of legislation, thus reducing the potential impact on dealer operations. For example, the association has:

  1. Motivated the extension in the Learnership / Apprenticeship Tax Allowance for an additional five years with National Treasury;
  2. Negotiated with SARS, which reconfirmed and issued an additional opinion by which motor vehicle dealers were granted special dispensation whereby the determined value for fringe benefit tax calculation purposes could be based on the average cost of all stock in trade;
  3. Participated in the drafting of the Automotive Code of Conduct in terms of the CPA under the direction of DTI.

B-BBEE: Codes of Good Practice

NADA, together with other role players from the automotive industry, met with senior officials from the Department of Trade and Industry to highlight the key interdependencies within the automotive sector concerning compliance with new B-BBEE Codes and their impact on the dealer network.

NADA is currently involved in on-going workshops with the Department of Trade and Industry to try to find amicable solutions in respect of ownership, procurement and other key elements with which members are finding compliance difficult. Further engagements are scheduled for June 14.

Second-hand Goods Act: Exemptions

Following formal applications by NADA to the SAPS on behalf of its members for exemption from certain sections of the Second-hand Goods Act, 2009 (Act No. 6 of 2009) in terms of Section 42(2) of the Act, the association has been advised that exemptions will be published shortly in the Government Gazette.

The exemptions deal with clauses such as the seven-day holding period, storage of stock on a second premises and record keeping. More detail will be given once the exemptions have been published.

Competition Commission

NADA participated in the Competition Commission Aftermarket Workshop which was held in March, in terms of which the Commission presented its views on perceived exclusionary practises within the South African motor industry. The Commission also offered views regarding the drafting and implementation of a proposed Code of Conduct for the automotive industry.

At the workshop, NADA’s chairman, Bruce Allen, took the opportunity to present the association’s standpoint. His presentation was covered in the May edition of Automobil.

Following the workshop, NADA was invited by the Competition Commission to participate in the first meeting of the Drafting Steering Committee, which took place on May 17.

NADA is acutely aware that the final outcome of Competition Commission process will have a direct impact on how business will be done in the dealer environment following implementation of the proposed Code of Conduct. Therefore, the association has been actively liaising with members and researching the matter with a view to finding the best possible outcome.

Financial Intelligence Act

The FIC recently advised NADA that that it was its intention to remove category of Reporting Institutions from Schedule 3 and convert them to that of Accountable Institutions.

The revision implied that the status of motor vehicle dealers would change from “Reporting Institutions” to “Accountable Institutions” and the impact on the industry would be significant. Therefore, there was an urgent need to find common understanding on how to address the matter with the FIC.

NADA formally appoint Prof Angela Itzikowitz of Edward Nathan Sonnenbergs to provide legal guidance and an opinion dealing with the following:

  • The extent of the compliance requirements for motor vehicle dealers as Accountable Institutions;
  • Drafting of representations to FIC to retain the General Exemption Notice 1, Clause 4; and
  • Submission of a request for exemptions to certain elements in the FICAA for motor vehicle dealers.

Legal opinion is being finalised and NADA will in due course engage with the FIC on this extremely important matter.

2017 NADA DSI Survey

Fieldwork for the 2017 NADA Dealer Satisfaction Survey – the 22nd organised by the association – began in March and member dealers are encouraged to complete the research questionnaire.

Results of the NADA DSI are used as a management tools by various dealer councils, OEMs and importers to address areas of concern in the value chain and business relationship matters.

Due to high response rate of over 80%, results of the NADA DSI are seen as being extremely credible by all stakeholders.

The NADA DSI Awards evening will be held on Thursday, July 13 at WesBank’s offices in Fairlands.

NADA/Sewells MSX International Business of the Year Awards

During March, NADA and Sewells honoured franchise dealer businesses in various dealership categories, with results covered extensively in the May 2017 edition of Automobil.

The NADA/Sewells Businesses of the Year Roadshows will continue to take place later in the year, details of which will be communicated to members in due course. Members are encouraged to attend as valuable information and industry trends are shared during these sessions.

Communication

NADA has been at the forefront of keeping abreast of both local and international industry trends and has kept its members informed of important developments that may affect their businesses.

A NADA Newsflash is sent to members on a regular basis regarding matters of importance, while other articles and news items are published regularly in Automobil and are broadcast weekly via the RMI’s web letter.

Conclusion

During the process of addressing various key objectives, NADA has engaged with – and held productive discussions with – senior representatives from the following government and business related institutions:

  • South African Insurance Association;
  • National Association of Automobile Manufacturers of South Africa;
  • Motor Industry Workshop Association;
  • TransUnion Auto;
  • Lightstone Consumer;
  • South African Bureau of Standards;
  • Motor Industry Ombudsman of South Africa;
  • National Treasury and the South African Revenue Services;
  • The South African National Roads Agency SOC Limited and Electronic Toll Collection (Pty) Ltd;
  • Department of Trade and Industry;
  • Department of Transport;
  • Road Transport Management Corporation;
  • Department of Higher Education and Training;
  • Financial Services Board;
  • National Motor Finance Association;
  • South African Police Services.

There are many other matters and issues with which NADA deals on an ongoing or ad hoc basis. Through collective efforts of full time paid officials and elected office bearers, dealers’ best interests are being preserved.

NADA will, through its ongoing endeavors and achievements, continue to pursue its vision of contributing to the long terms sustainability and growth of South Africa’s retail motor vehicle dealer businesses.

 

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