In January 2015 the South African Automotive Industry Code of Conduct (“the Code”) was adopted to regulate relationships and interactions between persons conducting business in the Automotive Industry and their interactions and relationships with consumers.
The Code was the first of its kind in South Africa and is the product of numerous discussions that have taken place since 2010 between members of the industry, the National Consumer Commission and the Minister of Trade and Industry. Although it is deemed to be a private document (prepared by the industry), it obtained the status of legislation under the provisions of Sec 82 of the Consumer Protection Act 68 of 2008 (“the CPA”) and its application is compulsory to all suppliers in the Automotive Industry.
The Code applies to the entire Automotive Industry as defined in the Code, irrespective of whether or not individual service providers are members of any particular Automotive Industry Association. For purposes of the Code, the Automotive Industry includes importers, distributors, manufacturers, retailers, franchisors, franchisees, suppliers and intermediaries who import, distribute, produce, retail or supply passenger, recreational, agricultural, industrial or commercial vehicles. It also includes the import, distribution, manufacture, retail or supply of any components and the provisions of repair or replacement services and anyone who modifies, converts or adapts vehicles in their normal course of business.
The purpose of the Code is not only to regulate relationships between persons in the Automotive Industry and their consumers, but also to provide for a scheme of alternative dispute resolution between consumers and participants in the industry and to create an ombud to provide alternative dispute resolution services.
In terms of the Code each supplier in the Automotive Industry has to provide for their own, internal dispute resolution procedure. If a dispute between the consumer and supplier is not resolved within a period of 30 days or as agreed, then the consumer may refer the dispute to the industry specific ombudsman.
The Motor Vehicle Industry Ombudsman of South Africa (MIOSA), who has been resolving disputes referred voluntarily between motorists and automotive companies for the past 15 years, has been accredited to act as the official ombudsman under the Code for the Automotive Industry.
There are numerous benefits for both the Automotive Industry and consumers alike in having an industry specific ombudsman such as MIOSA. This includes having your disputes attended to by someone who is familiar with the industry and who has both the technical and legal knowledge necessary to attend to the dispute. The services of MIOSA are free to the consumer as its workings is funded by the Automotive Industry itself. Disputes can be resolved within a shorter period of time due to the expert knowledge of the ombudsman and there is a reduced need for expert evidence. As a result of their specialization, MIOSA is also enabled to generate industry specific guidelines with the intention of reducing or avoiding disputes of a particular nature and to improve the Automotive Industry’s service to the public, something which a non-specialist tribunal would not be able to do.