Feb 24, 2020 AutoMatrix, 2020 Conference cruise, Motor Body Repair (MBR) sector, Gary Gueli, Neal Jackman, Hasta Symonds
2nd successful annual AutoMatrix industry conference cruise
AutoMatrix has once again organized and hosted their 2ndannual Industry Conference cruise to Mozambique island. Focused on the Motor Body Repair (MBR) sector, the 340 delegates participated in interactive presentations and discussions tackling industry issues, with an impressive array of speakers from NAAMSA, RMI, SAIA, Honda South Africa, Isuzu Motors South Africa, Suzuki Auto South Africa, Lightstone, Axalta and Marouns Group.
The energetic team from AutoMatrix compiled an informative and entertaining schedule, which ensured that the delegates were able to take advantage of all that was on offer aboard the MSC Orchestra, including an afternoon on Mozambique Island, whilst maximizing on the opportunities presented in the conference over the three days from the 7thto disembarking on the morning of the 11thof February in Durban harbor.
Amidst discussions over the announcement by SAA that all local flights, with the exception of those to Cape Town, would cease and the inclement weather conditions, excited delegates and their partners boarded and were greeted and welcomed by Gary Gueli, Hesta Symonds and Neal Jackman while being registered for the conference efficiently and effortlessly by Candice and her team from AutoMatrix, in the reserved Shaker Lounge on deck 7 of this 16 deck floating five star liner before settling into their cabins prior to joining the “leaving party” on deck 13 as we exited the harbor.
Proceedings got off to an early start with Gary officially welcoming delegates, introducing MC and entertainer Larry Soffer and launching ‘Blue Saturday’ which included a number of conference competitions and special offers from sponsors such as Gondolier and Arrow Trading Corporation. After briefly entertaining delegates with his mental abilities Soffer introduced the first presenter from the South African Insurance Association (SAIA) General Manager – Governance & Transformation, Mr Themba Palagangwe. He detailed the associations stance on transformation and procurement in the industry, highlighting some of the procurement challenges faced within the industry as well as the 2018 procurement data report showing that ‘less than 50%of the claims are settled through the repair of assets,’ and additionally that the ‘allocation of procurement remains less than 50% in both in-warranty and out-of-warranty claims.’
Jakkie Olivier, CEO of the RMI, which includes SAMBRA followed Themba, with an RMI presentation on the current Motor Body Repair landscape outlining SAMBRA’s role and the challenges facing the MBR sector – including the significant changes within the sector, some of the difficulties in running a sustainable, profitable SMME business in the MBR sector. He touched on the current employment outlook – which is at a 5year low – whilst saying that the MBR sector is most likely to take on unskilled labour.
Olivier tackled some of the issues facing the industry and specifically the MBR sector, saying the lack of profitability went hand-in-hand with slow or a lack of upskilling due to the cost of training interventions to the business. He said “that with the continuing technological transformation in the sector there was a mismatch between labour available and the skills required.” He went on to say, “the cost of compliance has a huge impact on commercial sustainability – with research showing that 23% of SAMBRA businesses had at some point considered closing due to compliance costs.” He questioned the need to revisit statutory regulation within the industry with only 16% of SAMBRA businesses believing that statutory regulation pertaining to their business is relevant. Olivier said, “many SAMBRA business owners believe that they could be more compliant with equipment and waste management matters, but that budget and skills are the key barriers to improved compliance.”
He went onto Pay Before Release (PBR) and said that the MBR sector was the only sector not to have exercised its right of lien over vehicles repaired. PBR is a necessity with delayed insurer payment and their poor payment administration having a negative effect on the business’ cash flows. These added to the “staggering differences between labour rates paid between MBR and OEM-appointed motor dealers, both of whom require substantive investments to their business’ have forced the sector into a situation where the MBR sector can no longer afford to pay artisans a wage that encourages entry into the sector or upskill their current workforce. He continued by addressing fair, unrestricted and competitive business practices within the MBR sector. Olivier concluded with RMI views on the future of the MBR sector saying that MBR’s need higher SLA labour rates with reviews 3months prior to annual SLA renewals and timeous payments to SMME’s combined with reduced compliance and regulatory costs, whilst write-off values need to return to more reasonable levels of around 75%.
Mike Mabasa, CEO of NAAMSA was next up to the podium, with a presentation entitled ‘The SA Automotive Industry – reimagining the future together.’ Mabasa kicked off with a description of NAAMSA and its membership base covering the recent amendments to its constitution to include associate members – defined as any other company wishing to benefit from an association with NAAMSA and which falls outside the definition of a Full Member, these companies can apply to become an Associate Member. He went on to detail the SA vehicle total production figures of 631,938 – breaking those figures down into passenger, LCV and combined MCV/HCV as well as local sales and exports respectively. He highlighted that with the major industrial activity bought about under the MIDP and current APDP the South African automotive industry has gone from zero exports in 1995 to a situation where we have exported 4 332 623 vehicles to date.
Mabasa gave a birds-eye view of the 2019 vehicle import stats and then broke down the local vehicle sales via the 1 853 franchise dealerships selling 49 passenger car brands with 3 716 model derivatives to choose from! He expanded into the size of the SA Carpark as being 12,4 million units of which 9,3 million are out of warranty. He then launched into SAAM 2035 (S A Auto Masterplan) its objectives and estimated impact on the SA Auto industry. Mabasa concluded his presentation with an overview of automotive technologies and Electro-mobility into 2035.
Gary Gueli, AutoMatrix Director thanked delegates for attending the first conference session and reiterated the importance of creating industry platforms that encourage open participation, information sharing and constructive dialogue.
After a morning of hard realities and informative data, delegates were released to enjoy the afternoon on Mozambique island. Sunday morning was dedicated to a number of interactive business sessions and started with a closed session by Honda South Africa for their certified body repairers only. They were followed by Graeme Reid from Lightstone, with an overview of the company and details of Lightstone’s EchoMBR 2020 enhancements. Suzuki Auto South Africa’s warranty Administrator, Tumelo Mlilo took his turn in front of the attendees with a presentation covering the Suzuki After-sales team and Suzuki’s reasons for appointing AutoMatrix in August of 2019. He concluded by fielding questions from the floor.
SAIA’s Palagangwe, RMI’s Olivier and NAAMSA’s Mabasa each took sessions at the podium to answer specific questions and comments from the delegates about their respective associations and presentations. After some lively debate Marouns Group, Regional Sales Manager, Jason Jurams stood up to describe the management team structure of the Group, before presenting an interesting analysis of the MBR profit trend from 2015 to date with a built in inflationary increase compared to the current reality in terms of labour rates, panels and paints. The disparity between the inflation adjusted projection and current reality in terms of cost and profitability is in this scribe’s opinion criminal – it is no wonder that MBR’s find themselves in a quandary.
Graeme Gill of Isuzu Motors South Africa, followed with his presentation of the Isuzu Authorized Body Repairer Programme complete with numbers of authorized repairers for both LCV and Commercial vehicles in both South Africa and its neighbouring territories. In addition, Gill reviewed the application for Isuzu Authorization process as well as key dates and objectives of the programme before answering questions from attendees. The Axalta team closed off the sessions with an overview of the company, its route to market and the brands within its stable.
Jakkie Oliver commented, “AutoMatrix provides an excellent platform to address important stakeholders in the MBR sector and RMI welcomed the opportunity to discuss some of the key challenges and opportunities. It is so important to connect and engage in robust conversations so we can grow the market and find solutions which benefit all parties.”
Mike Mabasa said, “The time for the industry to unite and work together is now. Gone are the days where we used to retreat into our own ivory towers and spoke to no one but hope that things will change for the best are long gone. At NAAMSA, we have created a new category of membership in order to accommodate Associate Members into the future. You are all invited to connect with OEMs directly through this platform.”
Delegates then retired to make ready for the Krone Cruise Main Show and the closing private AutoMatrix ‘Evening with Stars’ where delegates were entertained by Larry Soffer (Mentalist Show) and local SA artists The Campbells, Refentse and Kurt Darren.
Hesta Symonds, AutoMatrix Director concluded, “Congratulations to the AutoMatrix team on a very successful Industry Conference Cruise 2020. We are proud to have such a professional and dedicated team in AutoMatrix.”
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