The year ahead brings with it a raft of business uncertainty as we turn a new page in history and leave behind a year of harmful economic features with government corruption, poor leadership and the same doom and gloom headlines. There are still ongoing lockdown restrictions, we have been shunned by the international community of late, and with local polls showing less than 50% of support for the ANC, one has to ask where does the madness end?
The signs of demise are now clearly out there for all to see with Eskom the ‘prince of darkness’ among the leading companies of state-owned enterprises. The South African Reserve Bank is now on record to deliver a growth projection of just 5.3% for 2022. This reflects the large number of constraints that have to be factored in like numerous power cuts and government’s ability to continue going down a path of economic failure because of blinkered unachievable political ideologies which has thus far successfully delivered our local workers a world record of 46.6% unemployment rate to contend with – and yet the communist viewpoint continues to be sought after.
97% of all tax fell on just 3 million people out of 56 million inhabitants! This situation is clearly unsustainable when viewed against borrowing costs and with little or no answer to the enormous problem of job creation are in clear view. As the ANC continues to wane, the national assembly recently passed yet another draconian bill on the Employment Equity Bill of amendments where the government can set binding racial quotas on industry in yet another disregard for the functioning of a free enterprise economy. They, and the country are clearly now in major distress.
Not even the brightest bulb in the shop could have envisaged the unfolding economic damage the past two years have delivered. This is coupled to the stupefying episode of “alternative shopping” mid-last year and the Chinese policy of grabbing the world’s spare container capacity by paying more for the return of an empty container to China than a fully loaded one.
Cash flow problems are becoming a major headache. South Africa’s lack of body shop repair essentials has driven the repair cycle into a cash flow nightmare where damaged vehicles lie unfinished waiting for small body clips, windscreens or elusive spare parts. All the while the insurance market seem oblivious to this state of affairs. The cycle repair slow down we’re trapped in right now shows that parts availability by OEM importers have dropped by over 25% on ready to sell spare parts.
The all persuasive sense of chaos is bound to filter down to the front door of your body shop one fine day and the everyday need to see our troubled industry hit the survival mode button. As the long-standing lockdown continues there will be plenty of wind against the average entrepreneur’s chest in the year ahead.
When you consider the blindingly obvious that a large percentage of body shop owners, have in many cases, used any spare cash to keep their doors open, or as a lifestyle business – which they are entitled to do – most are now broke. What is happening now is a clear indication of the state of play. Repairers are seeking terms to carry on their operations. Thirty days to pay soon becomes sixty days and so on and so forth. Major suppliers of panel, paint and sundries are having to introduce payment plans all too often to keep the show on the road. And in a land where the government thinks that putting their political party above all things economic, it’s now quite clear that they lack both the resolve or business acumen to improve the lot of every day small business survival in South Africa.
There is light at the end of the tunnel
Finally, we have had the first report back from the Zondo commission and legal cases have been given far more gravitas and an open door to continue against former and existing “leaders” who have plundered this amazing country for their own gain. Few have profited off of the backs of the poorest of the poor and eventually everyone must answer for their actions. If you give a dog enough rope, they will eventually hang themselves – either in greed, stupidity or blatant arrogance. No one is ever above the law.
While we wait for change to happen – oh hold on… change starts with me! – enjoy the sun, braaivleis and a welcome cold one. Take time to strategise on how we can stand together as an industry and introduce plans to ensure longevity for our business. Some ideas to start with are to join a good body representative, like that of the CRA, who are passionate about fighting for the deserved labour rate, looking at recycled part options, upskilling for the future and much more, to ensure that the collision repair industry has a sustainable future.
Standing together is absolutely all that we have left. Mahatma Gandhi was spot on when he said, “Be the change you want to see in the world.” If we want to have our industry back in our hands, we have to fight for it. We can no longer stand with our heads in the sand or paralysed with fear. Now is the time to get together, put egos aside and do what is right for everyone as a whole.
By Ian Groat