Hardly a day passes by when the automotive problem of parts delay gets a mention. The lockdown and its consequential de-stocking of all types of aftermarket parts, paints and auto glass will however become adversely affected by the now “normal” shipping delays. When set against a modest market, the problem of availability for many key fast-moving repair parts, it looks to be becoming a real threat to the fabric of the repair cycle in motion.
Just look at the major fire suffered by Renesas Electronics in Japan which has devastated new car production and has caused a chip shortage all over the world. These unforeseen short falls have become a headache to contend with. Chinese production demand outputs have caused an international shortage of containers reportedly as they are apparently paying full price for an empty container to travel to China in order to short supply the global shipping market availability of these units. The result is that lead times for spare parts have often increased by a full month in duration. One major parts importer is on record to say that lead times have gone out to 90 days before spares arrive in stock.
Ironically the container shortage is in a way not true, as containers are often not returned to their original shipper because of collection costs to the docks they are delivered from.
In a world gone mad in supply charges a cost of some R1 800 to collect an incoming container has gone up to approximately R8 000-R10 000, which is exorbitant to say the least! All this while our President says things will improve soon at the Durban port with major investments planned. But for now, the containers lie empty in fields at the old Durban airport for weeks on end. Road freight operators are concerned about the wait to collect any container at Durban, which can be two or more days. These delays eat further into the bottom line. Another delay is that a ship may now also be required to call at more ports adding to further time delays.
All in all, we can expect both delays on parts and paint, plus increased shipping costs that won’t return to their former normal selves any time soon, so industry insiders say. Despite the government saying that things will soon get better it feels like another smoke and mirrors story once again. All these hidden costs will only impact the unsuspecting public to open up their wallets for more unseen expenses on the horizon.
Much ado about nothing?
It has now been over five years since the Competition Commission enquiry into the form of insurance dominance when viewed against body shop repairs took place at an industry wide conference held in Pretoria. To date the exact way forward on this matter has still to be decided. It’s just one more futile effort by a distressed motor repair sector to redeem some sort of straight forward answer on just why insurers pay out less money, by approximately half of the going labour rate for mechanical charge out labour rates, across the country.
That said you can read a full and fair assessment of how major motor insurers in the USA market play exactly the same game on material cost suppression as well as labour rates across the entire nation of body shop repairers in this issue (pg 40). It seems to be an operational game plan across the world of free enterprise to gain profit.
When trying to write an article on the upcoming right to repair it has proved to be almost impossible. It truly depends on who you speak to as to what opinion you get. It seems that most have adopted a keep silent and see approach when it comes to the manufacturers, while much documentation has been released and isn’t apparently well thought through. Once again, it’s a cookie-cutter approach of one size fits all. If you’re in the automotive industry then this size should surely fit the long, tall, medium and even the wide? The “mahala” approach to tools and equipment as well as training along with the warranty removal demands seem to not factor in economics or the costs of production, training, equipment or the lives that are at stake with vehicles that stand to be repaired incorrectly and not up to safety standards. Rules and tried and tested methods appear to be guidelines.
This logic is scary to say the least. It places so much responsibility on the consumer who we are then to presume understand collision repair and the ramification of their actions in seeking alternative parts and repair. Warranties, training, the correct tools and equipment are there for a reason – the protection of consumers – isn’t the customer and their safety, as well as our road safety, supposed to be number one in all of this?
Motor makers and dealer supply networks are sitting on the fence until the July deadline passes. Not doing much is moving in the direction of the new way of business practice envisaged by this initiative. Perhaps expect a media barrage to now come from the non-original parts supply brigade who quickly point out that cost savings will become clearly evident for the consumer. All too often these companies fail to tell you that there is a vested interest in their ability to supply these replacement pirate parts to the detriment of established original parts operations.
So, once again, it might be best to sleep with one eye open on these drives to reduce motor repair costs as it might not be such a level playing field as it looks for all concerned. When you read between the lines of changes being demanded, always remember, that even for a while even Bell Pottinger looked good didn’t they, before their deception was blown wide open.
By Ian Groat