Richard Green, National Director of the South African Motor Body Repairers’ Association (SAMBRA)
Anyone currently active in the 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. 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,” says Green.
The MBR industry will need to regroup, regain sector independence, focus on production efficiencies by developing skill and utilization 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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