Automotive Business Review November 2009

38 40 58 73 86 90

The OYLEY Price of Oil Truck Shows – a Thorny Issue AAMA Alert Marching to Pretoria The Tree Bears Fruit Information on AARTO

The

Phoenix

Keeping 35 Million Wheels on the Road Estimates vary, but there is general consensus that South Africa’s car parc is close to reaching nine million vehicles, and that these vehicles need to be serviced and maintained at the highest level possible. There is also no definitive average age for this car parc, as estimates once again vary. The lowest realistic estimate is around nine years, whereas the highest credible estimate is touching twelve years. Based on this, ten years would seem to be the happy medium. Considering that the sweet spot for the automotive aftermarket industry is in the four to twelve year old bracket, these figures make for some mouth watering statistics.

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he point of this editorial is that for the sake easy targets make one look proactive and relevant. Take our traffic of our economy our vehicles need to keep authorities, for example. But I digress, once again. moving. Taking this a little further, everything needs to keep moving, and there is Our vehicle parc is paramount to the efficient working of our no better illustration of the damage inflict- economy, and it is my assertion that it is being well served by the ed when things stop moving than the various players in the industry, from the front line of workshops, absolute frustration experienced and the spares shops, specialists, service providers, and the like, right concomitant drop in productivity when we through to the motor manufacturers, who start the cycle. And bear the brunt of rolling blackouts, courtesy of Eskom. With feeding this front line are the importers and distributors of parts, and there is space for all Eskom, we have no who deliver. If you option but to bite the analyse these compabullet and put up with nies, you will see that the pain, plus the added they all talk the same insult of ludicrous price language, of implemenincreases. A painful tation. They are fiercely crash course in the bencompetitive, fiercely efits of competition, independent, and fierceand the dangers of ly proud. They are the monopolies and state pockets of excellence intervention. But this is Which is the better scenario, from the consumer’s point of view? that Clem Sunter refers not an Eskom bashing to in his optimistic sceexercise, as they do the job very well themselves. We are looking at the transport industry nario of South Africa’s prospects, and the most common thread in their endeavours is cost reduction, which allows for margin reducand personal mobility, and the need to improve the status quo. tion and affordability for those at the bottom of the feeding chain. No sane person would ever suggest that the automotive aftermar- Affordability is a key issue for the South African motorist, and this ket is uncompetitive. Our cover story plus our insert in this issue has also created dual markets; the premium high quality market, of Automotive Business Review illustrates the point comprehen- and the cost conscious market, but also with the need for an sively. When it comes to fighting for the heart and soul of the acceptable level of quality. This is the fine balance and the thin red automotive customer, AutoZone and Midas are the two gorillas in line that the distributors have to walk as they strive to satisfy diverthe room, but there are many other players, of various sizes, and gent interests. And they are under constant attack from the fly by various flexibilities, who keep these gorillas on their toes. It is an night characters and less ethical operations, but the soon to be extremely competitive environment, which is good news for the introduced Consumer Protection Bill will cramp the style of these consumer, and good news for the economy. And it is an extreme- vultures. ly dynamic segment, with fluidity and positioning being the name of the game, ever since I started taking notice some 35 years ago. 2010 will see a new landscape, and a new dynamic, but the wheels Both AutoZone and Midas are currently going through a change will keep on moving, thanks to the Herculean efforts of the autoof ownership, which has generated much speculation and more motive aftermarket industry. than a passing interest from the competition authorities. An unhealthy obsession, in my mind, considering the other more pressing uncompetitive sectors in our economy, but I suppose that

w w w. a b r b u z z . c o . z a 2

November

2009

Contents

8

32

34

2

The Phoenix

6

What’s the Buzz

14

Cover Story

AutoZone – not just a business

18

Auto Topical

No Need to be Passive about Forex Risk

20

Frankly Speaking

SA’s Motor Industry – Some Food for Serious Thought

22

Engine Remanufacturing

Why Remtec?

24

AIDC AUTOMOTIVE INDUSTRY CONFERENCE 2009

36

The Chery Story

New Chery J1 Packs a Big Punch

38

Tony’s Take

The OYLEY Price of Oil

40

Weighty Issues

Truck Shows – a Thorny Issue

42

Health Care

An Update on Moto Health Care

44

MISA Update

Statement to Contributors

46

Schaeffler Shorts

The Timing is Right

52

Tyre Safety

Tyres’ Contribution to Safety in Motoring

54

Diamond Dialogues

Opening the Doors of Perception to Standards and Controls

56

Personal Profile

Q & A with Darryl Jacobson

58

AAMA Alert

A Volatile Rand

60

Customer C.A.R.E.

Customer Relationship Management

Keeping 35 Million Wheels on the Road

Trilogy Customer C.A.R.E. Programme The publisher and contributors have done their best to ensure the accuracy of the articles and cannot accept responsibility for any loss or inconvenience sustained by any reader as a result of information or advice in Automotive Business Review. The information provided and opinions expressed in this publication are provided in good faith and do not necessaraly represent the opinion of the publisher. No article may be reproduced in any form without the prior written permission from the publisher, except for the quotation of brief passages in reviews.

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Publishing Editor Graham Erasmus 083 709 8184

Intelli-Driving Editor Eugene Herbert 082 941 3785

Commercial Vehicle Editor Alwyn Viljoen 082 458 9332

Correspondents Beeton, Frank Borlz, Baron Claude Burford, Adrian Gamble, Austin

Hogg, Gilbert Keeg, Howard Macaskill, Richard McCleery, Roger Twine, Tony Wilde, Fingal Published by: Trilogy Publishing

Advertising Sales: Marlene Erasmus 082 837 2668 e-mail [email protected] Stanton Porter Marketing Tel: 012 654 2745 e-mail: [email protected]

Contents

58

78

87

66

AIDC Quiz

67

Show Time

Schramm confirmed as keynote speaker for Tyrexpo Africa 2010

68 Robert Bosch

ESP® Basics The Golden Triangle

70 Capricorn Insights

An Effective Marketing and Sales Tool

73 e-CAR

Marching to Pretoria

74

Midas Moment

Midas NAPA Convention ends on Emotional Note

76

Launch Technologies

Launching Customers for Life

78

Partinform

Algoa Bay Welcomes Partinform

82

Commercial Vehicle Update

South Africa’s Toughest Warrior

83

Green News

Going slowly, but going somewhere

84

Life Goes On

Power GM Trio Briefs the Media

85

Corporate Conscience

Midas Scores Way Above Par The Tree Bears Fruit SABAT Hosts 7th Annual Power Wheelchair Race

88

Show Time

First HeavyWeight Expo

90

Intelli-Driving

Information on AARTO Implementation

92

From the Cockpit

Highveld Storm Washes the Blues Away

94

Fast Wheels

Another Close Finish to the Formula One

95

The Last Writes

Editorial Office: 81 Alma Road Wendywood Tel 27 11 656 2198 Fax 27 11 802 3979 e-mail: [email protected] Website: www.abrbuzz.co.za November

2009

Subscriptions and Data Management: Trilogy Trading & Promotion P O Box 69 Wendywood 2144 Tel 27 11 802 6020 Fax 27 11 802 3979 e-mail: [email protected]

Design and Reproduction: j. Kraft Information Design cc Tel: 012 997 6946 Fax: 012 997 6987 e-mail: [email protected]

Printing: Business Print Centre, Pretoria Official Mouthpiece of

5 5

What’s

the

Buzz? Not a Rolling Stone

TYRE FITMENT CENTRES

Racing driver Stirling Moss celebrated his 80th birthday on 17 September 2009. He drove for Mercedes-Benz in one season, 1955 – an unforgettable year for the brand owing to the many, many triumphs. Though an accident put an end to Moss’ career in 1962 and he never succeeded in capturing a world champion's title, he is regarded as a phenomenal driver. And to this day he sees himself as an ambassador of motorsport. Together with codriver Denis Jenkinson he finished the Mille Miglia in a time which still stands as a record today: after 10 hours, 7 minutes and 48 seconds the silver-coloured car with "722" – the customary starting time of the Mille Miglia – painted in red on it was waved across the finish line as winner.

Bridgestone South Africa has reminded motorists to only use reputable fitment centres and be aware of safety-critical aspects when having new tyres fitted. Romano Daniels, General Manager of Group Communications and Marketing, said that tyres are safety-critical items which should only be mounted by properly-trained personnel. “Avoid the temptation to use backyard mechanics or non-specialists to fit your tyres,” said Daniels. “They may not have the equipment or expertise to ensure your safety, and this could result in tyre failure.” He advised motorists to consult with fitment centre staff if there was any doubt over the way the tyres were to be fitted. In particular he said motorists should insist on the following: Renewing the tyre valve at each tyre change; Correction of tyre pressure to manufacturer’s stated figure after mounting; Confirmation of correct wheel alignment to reduce unnecessary tyre wear; Correct fastening sequence when tightening wheel nuts or bolts; Correct torque value of wheel nuts and bolts. quickpic

Fiat is Europe’s most ecological brand One of the 25 best-selling automobile brands in Europe and after two years of holding the leadership position, Fiat Automobiles has proven to be the brand having the lowest average CO2 emissions on cars sold during the first half of 2009: 129.1 g/km (the figure was 133.7 g/km just six months ago). Fiat has also set a new record: it is the only full-liner brand that already today has achieved the European average goal of 130 g/km established for 2015. The record of 129.1 g/km set by Fiat was corroborated by JATO, a world leader in automotive advisory and research services, founded in 1984 and now operating in over 40 countries. Of the top ten brands, the bottom line shows FIAT ahead of Toyota (132.9 g/km), Peugeot (134.5 g/km), Citroen (138.1 g/km), Renault (138.9 g/km), Ford (140.4 g/km), Opel (149.5 g/km), Volkswagen (152.5 g/km), Audi (162.6 g/km) and Mercedes (178.8 g/km).

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SKF’S FORZA RACING SPONSORSHIP - A SHARING OF VALUES & KNOWLEDGE SKF South Africa’s sponsorship of Forza Racing is a perfect partnership between two companies that are dedicated to offering superior quality products, exemplary service, and a shared passion for motor sport. The SKF group has been involved in the Formula One Ferrari racing team for the past 62 years while the Forza slogan, ‘Ferrari…It is in our blood’ sums up the Forza Racing vision. SKF has, for over a century, maintained a powerful global position as a leading specialist in rotating equipment and related technology. Forza Racing, Forza meaning strength, is South Africa’s premier independent Ferrari specialist and the ‘Go To’ company for all Ferrari owners and enthusiasts. Managing Director, Oscar de Oliveira, who founded Forza Racing in February 2008, has had a love of cars from a very early age and he always managed to stay close to the racing scene. Forza Racing and SKF share a number of ideals, “And” says de Oliveira, ”because we have so much in common, the sponsorship deal is a winner for both companies. It is so important to choose the right partner in this game. There has to be synergies, common ground, a passion for this often cruel and very expensive sport; the SKF team brings all this to the table. This partnership goes beyond the sponsorship of specialised bearings and related products. It is a sharing of values, knowledge, advice and technical expertise”. We also support annual fundraisers and auctions held by the Foundation. We have a very special dream to fulfil in November, for one of the children from the Foundation”.

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November

2009

What’s

the

Buzz?

Hi-Q Celebrates 10 Successful Years One of South Africa’s leading consumer tyre retail brands Hi-Q celebrated in September 10 years of exceptional growth within the retail tyre and wheel industry. From just three stores in 1999, the franchise network – one of the country’s youngest major franchise brands – has grown to 178 nationwide. Managing Director Sean Harrison, who joined Hi-Q two years ago, said: “From a franchising point of view, the growth of the Hi-Q network has been phenomenal. In just a decade, the brand has become a household name in South Africa.” Over the past few years – and in spite of the turbulent economic climate – Hi-Q has been the fastest-growing brand in the retail motor industry sector. “We are very proud of Hi-Q and the enterprising individuals that make up our brand,” said Harrison. “At the time of its inception, tyre manufacturers were looking for a channel of distribution that was increasingly reliable and dependable. Global retail trends indicated that fitment centres owned by independent franchisees as opposed to corporate organisations were the best option, as they quickpic were more likely to go above and beyond the call of duty in serving their customer base.”

Renault South Africa aims for 110% Renault South Africa has launched a powerful national campaign, with the objective of upping service delivery at dealerships nationwide to exceptional levels. The campaign’s implementation coincides with significant improvements in Renault’s market share, and further gains in sales volumes. The ‘110% Campaign’, which went public in October, will see all staff members at Renault SA’s head office, and especially Renault’s dealer network, go out of their way to make the sales, aftersales and service experience at Renault an exceptional one. “While customers expect 100% in terms of service delivery, and rightly so, we want to go one step better,” says Tim Marriott, Vice President – quality and Service, at Renault South Africa. “The 110% Campaign is aimed at ensuring that our dealerships deliver even more than expected.”

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Lexus Leads the Way When it comes to quality and care for the environment, Lexus is a leader in providing the only range of PERFORMANCEHYBRID vehicles in South Africa. It’s also a well known fact that Lexus has dominated quality and customer satisfaction awards for nearly 15 years. The freshly launched RX shows a clear intention to continue that domination, in particular with the RX450h, the world’s only petrol-electric hybrid SUV. The new Lexus RX has raised the bar even further when it comes to quality and cleanliness, and extensive care has been taken to ensure both these attributes reflect the premium brand’s relentless pursuit of perfection. In PERFORMANCEHYBRID guise, the new Lexus SUV really does its bit for the environment, returning class-leading CO2 emissions of just 148g/km, similar to typical 1600 family sedans. But Lexus’ consideration for the environment extends beyond the operation of its hybrid SUV to the impact its manufacturing process has, as well as its ultimate disposal at the end of its usable life. Indeed, clean manufacturing not only leads to limited environmental impact, but its attention to detail shows through in quality terms as well. Lexus’ Kokura plant in Japan is the only dedicated hybrid factory in the world. Its operational philosophy ensures cleanliness and quality throughout thanks to the use of many advanced production technologies that guarantee not only superlative product quality, but consistent levels of accuracy in every single component. quickpic

Nissan Unveils Sketch of its Future Global Compact Car Nissan Motor Co., Ltd. has revealed the sketch of its global compact car. Planned to be manufactured in 5 countries, including Thailand, China and India, the model will be first launched in Thailand in March 2010 and will be available in more than 150 countries, including South Africa. “We aim to make an impact on the B-segment, the biggest market for passenger vehicles in South Africa” – says Mike Whitfield, Nissan South Africa, MD. This major segment caters for first time car buyers or as a secondary mode of household transport. “We are confident that the new Nissan will offer a stylish, yet value for money package,” concludes Whitfield. Timing for local introduction will be announced in due course.

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November

2009

What’s

the

Buzz? SA Women vote Suzuki Jimny Tops The pocket-sized Suzuki Jimny 4x4 has kicked dust in the headlights of many of South Africa’s fancied all-terrainers by taking the category laurels in an annual Car of the Year contest voted for exclusively by women. The 2009 Women’s Car of the Year Awards are organised annually by the Women on Wheels motoring supplement. The supplement is edited by seasoned motoring journalist Charleen Clarke, and published in Cosmopolitan, Marie Claire, Oprah and House and Leisure magazines. The Jimny, which quickly established an enviable reputation as a bighearted, agile and affordable all-terrainer, after being launched in SA in September last year, was one of 10 finalists in the 4xFabs category of the contest. This year’s panel of judges consisted of Clarke, together with fellow motoring scribes Helene Griffiths and Peta Lee, as well as current affairs anchor Fenley Foxen . In addition, readers of the supplement were invited to vote for their favourite choice in each of eight categories.

YOUR NEWLY LICENSED TEENAGER NEEDS EXPERT TRAINING In the latest available global statistics, South Africa ranked the highest in the road fatality rate per 10 000 vehicles. A sobering enough thought, but in October CARS (Committee For More Road Safety) revealed that a new study suggests that our road death toll has been underestimated by more than half. While the Department of Transport gives a figure of 10 000 each year, CARS says in reality it is nearer 18 000. So, if your first experience of handing over the keys to your newly licensed teenager was more one of panic than mere trepidation, know this – you have every right to be concerned. Grant McCleery, a multiple SA motor sport champion, who heads up Yokohama Driving Dynamics, has been teaching specialised driving skills for nearly two decades and in his opinion, every man, woman and especially teenager, needs more than just basic driver training to ensure their safety on our roads. He says “The K53 driver training system is a great way to learn the basics but you need more sophisticated skills to deal with the unexpected, like avoiding collisions, regaining control of your vehicle, recovering from aquaplaning, or even just braking properly in an emergency. Don’t make the mistake of thinking of these skills as the exclusive domain of racing drivers. You child needs to know this stuff if he or she is going to get around safely on our roads.” Yokohama Driving Dynamics has forged an alliance with General Motors South Africa as its preferred vehicle supplier, to ensure that clients get the very best instruction in quality driving and safety. The fleet of cars includes Corsa OPC, Chevrolet Lumina, Aveo’s and Optra’s and the newly launched Cruze. Yokohama Driving Dynamics is based at Gerotek and also offers its courses at a variety of venues, countrywide. For more information, contact the company on 011-431-2000 / [email protected] or visit the website on http://www.drivingdynamics.co.za/

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SOUTH AFRICA’S FIRST LIVE 24/7 DEDICATED ONLINE CAR AUCTION SITE LAUNCHED Online Car Bid - www.onlinecarbid.co.za South Africa’s first live 24/7 dedicated online car auction website, launched early in October. Through Online Car Bid, consumers and dealers will be able to buy or sell vehicles via an online auction process, which the company’s local founders believe will revolutionise the local car sales industry. Online Car Bid has already secured partnerships with several of the country’s largest dealerships and consumers will be able to bid on an extensive range of used vehicles across all price ranges. Reserve prices, which reflect the minimum price that sellers will be willing to accept, start at as little as R1. At the other end of the spectrum, multi-million rand vehicles will also be available to bid on. Online Car Bid is the world’s first online car auction website to offer a full auction house service, backed by a qualified and dedicated national sales team of Auction Ambassadors, who are trained to provide a transparent, safe and professional service to all clients. “Our Auction Ambassadors act as a ’middle man’, providing all buyers and sellers with a sales representative with whom they can liaise and who will assist with arranging safe meetings and test drives to ensure the security of both parties,” says General Manager of Online Car Bid, Simon Nainkin.

BEWARE OF MULTI-MILLION RAND SCAMS IN USED CAR INDUSTRY Criminals are coming up with increasingly devious ways of parting used car buyers with their money. Sadly, more and more South Africans are falling prey to these fraudsters, losing millions of Rands in the process. This sobering news is courtesy of Darryl Jacobson, Managing Director of Burchmore’s, who warns that buyers need to be extremely cautious when acquiring a used car. “While most used car buying experiences are good ones, we are hearing of new scams daily,” he reveals. “Generally they have one feature in common: the buyer is being offered an unbelievably good deal.” Jacobson says that these “unbelievably good deals” need to be scrutinised over and over again. “If you’re about to buy a used car at a ridiculously low price, ask yourself why this

is happening to you. Why would you alone be privy to such an exceptionally good deal? Why are you so lucky? Chances are excellent that you’re about to be scammed,” he warns. The fraudsters are becoming increasingly creative, and Jacobson reveals that they may pose as an agent or staff member at a used car retailer or bank. “They are extremely convincing and appear authentic, and it’s relatively easy for them to dupe trusting members of the public. Their schemes are both innovative and sophisticated,” he notes.

MIDAS / IMPERIAL DEAL GAINS COMPETITION BOARD APPROVAL The penultimate hurdle in the 56% acquisition of the Midas Group by Imperial Holdings Limited has been successfully negotiated; it was announced on 8th October 2009 by Gordon Odgers, CEO of the Midas Group. This announcement follows the recent unconditional approval of the transaction by the Competition Board, which clears the way for the procedural formalities of due diligence and obligatory legal processes, as required to finalise the deal. This announcement also puts to bed months of speculation around the merits and prospects of the transaction. Imperial Holdings Limited had previously approached the Midas Group with a view to acquiring a majority stake, as they saw opportunities and synergies for both Midas and Imperial. Imperial places great store in the financial performance and the strong position of Midas in the automotive aftermarket, and also respects the business model, culture and management team of Midas, and it is on this basis that Imperial has committed to keeping these structures in place, and in retaining the unique shareholding of the balance of shares, i.e. management, member franchisees and empowerment partners. Gordon Odgers emphasises that Midas is a sound Group illustrating long-term growth and cash generation off a solid platform of well established franchises with a national footprint. He continues, “The transaction will provide a big brother for the Midas Group, will fit the Imperial strategy perfectly, unlock certain management and member franchisee shareholder matters and enable other opportunities to be embraced and as such has received unanimous shareholder and board support.”

November

2009

What’s World's first emissionfree foundry As from 2010, BMW’s Landshut plant will boast the world’s first foundry with emissionfree sand core production. The light-alloy foundry at the BMW plant is introducing a new sand core production method for gravity die-casting, whereby conventional organic binders will be replaced by highly eco-friendly inorganic binders, which generate virtually no pollutant emissions. The introduction of this innovative production method will allow the light-alloy foundry to reduce its emissions of combustion residues by 98 per cent. The plant will completely decommission its current waste air treatment systems by 2010.

AA South Africa pledges support for Jean Todt FIA Presidential bid The Automobile Association of South Africa announced before the voting that it would support Jean Todt in his bid for the FIA presidency. “FIA affiliated auto clubs worldwide, representing 100 million members and the well respected auto club brands, face unique challenges in areas as diverse as the environment; road safety; road usage and infrastructure and

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the

Buzz?

tourism. The FIA is going to require an exceptional leader with vision to respond to the needs of the mobility industry.” said Karen Bryden, Managing Director. The election results will be available before this magazine hits the desks, so go to www.abrbuzz.co.za to get the results.

Volvo Cars on the move towards a future without traffic accidents

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In the quest for the ultimate vision of an accident free traffic environment, Volvo Car Corporation's bold short-term target is that no one will be killed or injured in a new Volvo car by 2020. "Zero is the one and only alternative for us. As the leader in car safety we can't accept that people are killed or injured just because they want to transport themselves from A to B," says Jan Ivarsson, head of Safety Strategy at Volvo Cars. If we see an aircraft crash it's a disaster that we remember forever. But when passing a traffic accident where someone may have been injured or killed, people are often more concerned with the delay in traffic. It is this attitude, that traffic accidents are an inevitable part of our daily lives, that Volvo wants to challenge with its Vision 2020.

November

2009

What’s

the

Buzz?

OGILVY CAPE TOWN’S VOLKSWAGEN COMMERCIAL VEHICLES CADDY CAMPAIGN PAYS TRIBUTE TO SMALL BUSINESSES To thank all their loyal customers for making the Caddy Panel Van No.1 in its class, Volkswagen Commercial Vehicles and Ogilvy Cape Town have initiated the Caddy Panel Van Branding Challenge. The campaign is geared at acknowledging that the success of the Caddy Panel Van Range is largely due to the entrepreneurs and owners of small and medium businesses who have chosen a Caddy Panel Van as their business partner. Tapping into the entrepreneurial spirit, creativity and passion that the Caddy owners have for their business, Volkswagen’s agency of over 30 years, Ogilvy Cape Town, in collaboration with their Ogilvy Interactive team, created the Caddy Panel Van Branding Challenge. The campaign engages the creative side of these entrepreneurs through the use of an interactive microsite (www.vwcommercial.co.za/designacaddy). The site gives them the opportunity to win personalised vehicle branding for their Caddy Panel Van to the value of R30 000, thereby making their hardworking Caddy Panel Van work even harder for their business.

November

2009

Timken South Africa wishes to congratulate Hennie Groenewald for winning his fourth successive WesBank V8 Supercar Championship in stunning style at Kyalami on the 17th October 2009

13

Cover

Story

not just a business AutoZone, Africa’s largest engine and service parts and accessories retailer and distributor, offers more than simply a wide range of aftermarket parts to service the market, AutoZone also offers a service to the market that is unrivaled in the market place. This October, AutoZone had a number of reasons to celebrate, most important of which was the fact that it was AutoZone’s Birthday!

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his dynamic business began with 30 multi-branded stores over 10 years ago. The brands under the umbrella ranged from Eddies, Elpar, and AutoZone to Femo and Spareslink. This posed some challenges in the AutoZone stable, as the business had no critical mass in terms of power with which to market this wide range of brands. The re-branding and expansion journey for AutoZone began in 2002 as we embarked on a journey to collapse all the brands into one powerful brand, namely AutoZone. Now in 2009 as we sit and look back a couple of years, we saw the successful launch of the AutoZone Member model in September 2005, the expansion to a footprint of 90 wholly owned stores and an incredible team of over 2000 people who form part of the AutoZone Family. We also saw the evolution of a business and service in this market that are truly unique and a business with a personality we are proud of and are committed to growing. Core to AutoZone is our Customer – no matter how big or small they are, whether they are a long standing customer or the customer who walks through our doors for the first time simply to shop – and as such our offering to the Customer is crucial to our

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success going into the future. AutoZone, Africa’s largest engine and service parts and accessories retailer and distributor offers a comprehensive range of engine parts, service parts and accessories for passenger as well as light and heavy duty vehicles in the South African market. This range comprises of products from another important stakeholder in AutoZone’s success, our local suppliers, and is bolstered by the AutoZone House Brand programme. Our commitment to our local suppliers remains unwavering and it is through commitment and strategic relationships with these suppliers that we will be able to continue focusing on offering the best available product to our customers. Having established and bedded down our core offering, AutoZone strongly believed that there was still more they could do for their customers in the market. As such the AutoZone House Brand programme was launched. Every single one of our 5 brands was born from the mindset that we needed to offer our customers a genuine alternative product that is cost efficient. These brands, namely Ampro, AutoKraft, Ecotech, Femo and Spirex, complement the local brands in the offering and make it unnecessary for customers to look anywhere else to satisfy their product needs.

November

2009

Cover

Story

The AutoZone House Brands include: AmPro - AmPro tools are a comprehensive range of top quality tools, designed to last a lifetime. In fact, we have so much faith in AmPro Tools, that we back them with a Lifetime Warranty! This incredible range of tools is individually selected to ensure that AutoZone has every tool required for both the professional and the D.I.Y handyman. The core categories for this range of tools includes socket sets and accessories, wrenches, screwdrivers, electric screwdrivers, pliers, specialty tools, and tool chests. Why don’t you visit your AutoZone store today and stock up on this top class range of tools?

AutoKraft - AutoZone has developed an exclusive range of accessories, all under the AutoKraft range. These range from core categories such as camping and outdoor equipment, to workshop equipment. This worldclass range even includes custom car accessories such as car seat covers and wheel covers, all backed by our Hassle-Free returns policy. Ecotech - The Ecotech range from AutoZone covers all automotive electrical products, and caters for all types of vehicles from passenger vehicles to light and heavy duty commercial vehicles. This range of exclusive products is the largest and fastest growing range of top quality electrical products available. The Ecotech range includes products such as starters, alternators with their respective components, trailer plugs and sockets, electrical terminals, and on/off road lighting. AutoZone ensures that all Ecotech products are quality tested and vetted, ensuring that you get the most up to date technology, without paying inflated prices. AutoZone backs this up with their 12 month “hassle-free” warranty, offering you peace of mind. Femo - Femo is a top quality range of internal and external engine components, designed for a wide range of vehicle makes and models. This broad range includes piston rings, valves, bearings, sleeves, water pumps, fuel pumps and much more. The entire Femo range is also covered by AutoZone’s 12 month No-Hassle Returns Policy.

Spirex – Spirex is AutoZone’s range of top quality automotive hard parts and chemicals. This range of reliable, top quality products is affordable and inclues a wide range of products from brake pads, brake drums, filters, wheel bearings, fan belts, batteries and C.V. joints to oils and other chemical additives.

November

2009

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With the right products in the right places to satisfy our customers, AutoZone set about getting to know all of our customers and defining what else AutoZone could offer all of our customer types. These key ingredients would differentiate AutoZone from other players in the field. From this search for new offerings came the birth of a number of industry firsts: •

Technical Team – more affectionately known as “The Pit Crew”, this team of people offer free technical and fitment advice to all our customers. This team is available from 7am to 7pm, 7 days a week on a toll free number 0800 200 993.

•

24 Hour Call Centre – the call centre is a hub of communication for AutoZone – whether it be in the form of inbound calls from customers who need assistance and direction or outbound campaigns to assess our levels of service to our customers. Our Call Centre can be contacted 24/7 on 086 11 22 111.

•

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We guarantee everything we sell, no hassle! – AutoZone is proud of what we sell and stand behind everything we sell. AutoZone is committed to always offering the best and providing an excellent service overall to our customers which includes an after sales service that is not equaled in the market.

•

V.I.P. Cash Customer Programme – AutoZone believes in looking after all of their customers, not only the trade or account customers. If you are a cash customer at any AutoZone store, then you are eligible for the AutoZone VIP Card. This card gives cash customers the ability to earn points and redeem them for exciting products. The best part is that this card is absolutely free of charge!

•

Dedicated team programmes, retail management development curriculum and a programme to grow AMBASSADORS in our business and build our AutoZone family.

•

Independent Spares Shops: Our pipeline to success – These valued customers have supported AutoZone through various changes in ownership and name, and continue to support us. The independent spares shops are an essential aspect of our business success and we are committed to offering them the best parts and service at all times. November

2009

Thinking about the future, the AutoZone business is committed to overall excellence in everything we do for our customers – excellence in product, excellence in relationships, excellence in service and excellence in the AutoZone Family. No matter whether you are an engineer, workshop, fitment centre, independent spares shop or an at home D.I.Y. mechanic, next time you need a part, why choose anyone else? AutoZone is not just a business, become part of this Family, enjoy our phenomenal service! November

2009

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Auto

Topical

NO NEED TO BE PASSIVE ABOUT FOREX RISK by Tony Twine

At the AIDC Automotive Industry Conference 2009, held in Port Elizabeth early in October, an old topic of industry indigestion surfaced once again. It takes the form of dissatisfaction regarding the high level of instability of the foreign exchange value of the Rand, and appeared to be particularly troublesome to local producers of components trying to penetrate export markets. One can see their, and any other South African exporter’s point. Apart from the rolling cycles and sharp random movements that can be seen in the indexed Rand prices of currencies on a month end observation basis over long periods of time, depicted in the accompanying graph, the hurly-burly of even single day trading ranges can make or break anything resembling a profit margin on any deal. A recent example of this was the 24th October 2008, the day during which the crude oil price fell back below $60 per barrel after climbing to $147 on 4th July that year. On that day, the Rand opened trading in South Africa at R10.91 to the US Dollar. By around lunchtime, it had touched R11.76, before returning to close at R10.26.

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f course, the Rand has not been the only currency with significant levels of volatility on a daily, weekly, monthly or even annual basis during recent years. Since it came into existence a dozen years ago, at an initial exchange rate of $1.14 to the Euro, the European currency has been as low as $0.76 and as high as $1.48. The example quoted above of Rand volatility would have been bad enough if the Dollar was the only currency in the automotive trading mix, but other currencies tend to move in directions that either compensate or exaggerate the movements in the Rand/Dollar rate over any period of time. While that may appear to be a complicating factor at first glance, it may supply at least part of a solution to the volatility problems facing automotive component exporters in particular, South African

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exporters in general, when it comes to trying to plan export pricing strategies that will simultaneously be viable back home and attractive to overseas customers. It seems unlikely that any sudden medium or long term stability will return to global currency markets in the medium term future, so the only answer for local exporters is to use apparent disadvantages to your maximum advantage. The point is that exporters, at least for a time, have assets that are denominated outside of the Rand, and therefore the controls of the authorities within the Rand monetary area, namely the SA Reserve Bank. As long as the asset is legally outside of these controls it can be traded for other currencies, which can act as a type of hedge for the local exporter, until it is necessary to bring the asset home, requiring it to be converted to Rands. For decades, the South African business man was not

expected to have these kinds of skills. As a result, very few of them today have the time or information resources, or indeed the skill, to maneuver successfully around international foreign exchange markets, let alone other asset markets that may be necessary to hedge against losses of value of currencies in general. But there are specialists who can either advise or transact on behalf of clients, often starting with an exporter’s own bank. At its heart, foreign exchange exposure for any business with either import or export interests, and sometimes both, is really just another risk. Even within the constraints of foreign exchange controls, South African exporters have plenty of tools to help turn possible overwhelming risk into profit. We cannot expect the world to give us a flat line exchange rate against any currency, but we can use the lumps and bumps to our advantage.

November

2009

Frankly

by Frank Beeton

Speaking

SA’s Motor Industry: Some Food for Serious Thought

Although this column usually looks at issues in the global Motor Industry, it has been known, on occasion, to divert its attention to the South African scene when matters relating to the interface between the local and international industries emerge. Towards the end of 2008, for instance, when details of the Automotive Production and Development Programme were first announced, I spent some time broadly sketching the history of light vehicle manufacture in South Africa, and making some suggestions regarding directions that local industry participants might consider pursuing after the APDP’s introduction in January 2013.

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he general reaction to the APDP was positive, endorsing its key elements of stable and moderate tariffs, a Local Assembly Allowance for manufacturers producing more than 50 000 units per annum, a tradable Production Incentive providing duty credits for local value added, and an Automotive Investment Allowance amounting to 20% of project value. Early in October, however, NAAMSA president David Powels, who also happens to be the Managing Director of Volkswagen South Africa, made some interesting comments at the SA Automotive Week conference in Port Elizabeth. In a nutshell, he identified problem areas with respect to low levels of local content, uncompetitive local logistics costs, and government policy uncertainty. He predicted that, if these were not addressed, the local motor industry may not survive beyond the next seven to ten years. How things have changed! Back in the bad old days of the Local Content Programme, any suggestion that the local percentage should be INCREASED would have been met with horror. The problem with that mass-based programme was that to achieve a higher local content level meant localising ever more complex components and assemblies, with accompanying escalations in the amount of investment needed. There was also the situation where overseas plants may have been happy to delete increasing numbers of components from their packing cases, but they certainly did not delete their profit margins from the accompanying invoices! The South African vehicles may have been “protected” by stiff tariff barriers, but the final price paid by the customer in Eloff Street Extension became extremely high by world standards. This call for higher local content must reflect the greater exportorientation of the present industry, which has been fully integrated into global supply networks by its overseas parents. Cars required only for local consumption under the APDP would surely be most effectively provided by some mix of local assembly, low-tech local component sourcing and, as I previously suggested, inter-brand co-operation to get the full benefit of the 50 000 unit Local Assembly Allowance. The current pricing scenario does not provide any clear distinction between imported and locally built cars, despite the 30% import duty on fully built-up imports. It seems logical that shipping in containers of Completely Knocked

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Down components should always be more cost-effective than shiploads of Fully Built Up Cars containing large volumes of very expensive air! Surely, under these circumstances, local assembly will always beat FBU imports, irrespective of the level of local content. Volkswagen SA has enormous experience of both importing and exporting cars, so David Powels clearly knows something about optimum local content levels that I don’t. I am quite happy, however, to accept his position on the competitiveness of local logistics costs, and the lack of finalization of the APDP, which still needs fleshing out in the area relating to component exports, and in particular catalytic converters. This latter situation must be of great concern to an industry subject to long decision lead-times. The present government does not have a good track record when it comes to reacting fast, and I think that the main message on offer here is that it should not consider the continuing existence of a local motor manufacturing sector as fait accompli. The increasing militancy of local labour, and its propensity to strike, will also not endear it to the overseas principals of local operations who are desperately chasing viability in an increasingly more competitive world market. While there may be some qualitative issues that are currently preventing Indian and Chinese manufacturers from dominating the world stage, we can rest assured that these will not be around for long. Once the burgeoning domestic Asian markets have been satisfied, and start to stabilise, manufacturers in those countries, with or without the co-operation of the major Western and Japanese firms, will start to look very much more seriously at their export prospects. Tata already has manufacturing capacity in South Africa, and several other “investigations” into local assembly by Chinese and Indian brands are proceeding. With their huge domestic capacity, these companies will not invest in South Africa unless the local industry, and its supporting logistic structures, can achieve world-class standards of efficiency, reliability, quality and cost. They also do not have long histories of giving in to the demands of militant unions, or providing social comfort to their workers. This is something that local politicians and labour leaders would do well to remember. November

2009

Engine

Remanufacturing

Why Remtec? When it comes to replacing an engine, the question is what is the best option? A new engine for a vehicle that is over five years old is most probably out of the question, because of the relative values. The answer seems to be a remanufactured unit, but at what risk? You get remanufactured and remanufactured, so you need some reassurance before parting with your hard earned cash. How do you play it safe? With Remtec you play it safe.

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emtec is basically an OE remanufacturing facility, as it was originally the Volkswagen Remanufacturing facility, and renamed Remtec Manufacturing when purchased by a Port Elizabeth based group in July 1995. With the majority of staff taken over at the time of purchase, the OE genes are still there, and Remtec is now the exclusive supplier of remanufactured engines to VW of SA, General Motors South Africa, Ford Motor Company of Southern Africa, Nissan South Africa and Land Rover South Africa. Thus purchasing a Remtec engine comes with a significant pedigree, which is great news for the greater automotive aftermarket. With vehicle sales in a slump, and motorists hanging on to their cars for longer, the demand for remanufactured engines is sure to climb over the next few years, and automotive workshops will need to satisfy this demand with reliable engines and a promise of peace of mind. Remtec provides this. With their exchange policy which keeps turnaround time to a minimum, a passionate commitment to quality, the building of all units to OE specs, nationwide technical and warranty support, and a modern facility that can handle increased volumes, Remtec is well placed to efficiently handle the expected boost in demand. The demand has already ratcheted up, and thus Remtec is in the fortunate position to report that it has not had any retrenchments during the current economic downturn. There are other benefits for the trade. When fitting a remanufactured engine at such reasonable prices, the workshop gains a customer for life, and that customer will be

David Pitt, Managing Director of Remtec Manufacturing, stands next to an engine ready to be shipped to another satisfied customer back time and time again, for services, tyres, brakes, and more. There may be cheaper engines out there, but they are practically guaranteed to be inferior, as Remtec has access to original parts at competitive prices, and these are unlikely to be matched by other rebuilders, unless they are buying down. Remtec’s quality is now internationally renowned, and they have a growing export business. Join the global Remtec family, because you should not be asking why, you should be asking why not?

Every complete diesel assembly is dyno tested, and supplied with a dynometer certificate. Every petrol unit is hot tested before shipment.

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November

2009

Much Brouhaha over a Phantom Bailout The second edition of the bi-annual South African Automotive Week, held in Port Elizabeth from 7 – 10 October 2009, came with some unique challenges. We use the word “challenges” not because ABR loves the word (in actual fact we believe this is one of the overused words in South African discourse at all levels) but because of the frequent use of this word by practically every single one of the speakers at the AIDC conference. Maybe our attempt at incongruity backfires, because this time the word was used with some justification.

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s Andrew Binning, Chief Executive Officer of Inkanyezi Event Organisers, the organiser of the event, put it in his foreword to the Visitors’ Guide, “Planning over the past two years has been complicated by one of the worst global recessions in history. This has restricted international visitors to the event.” An understatement of note, but Andrew did have the opportunity to host the AIDC Automotive Industry Conference as part of the week, which definitely was a master stroke, and in the opinion of ABR, this event saved the SAAW, and if we were Mr. Binning, we would be signing up this conference for 2011 right now. Another scoop was the appearance of the much touted Joule on show, and hopefully when SAAW 2011 comes round, the Joule would have moved from concept to reality, and flying the South African flag both domestically and globally. Come rain or shine, ABR shall be there to reveal all. The highlight of SAAW was, as we said, the AIDC Automotive Industry Conference 2009, with some stimulating and insightful presentations together with sharp repartee on the panel discussions adding spice to an already loaded programme. ABR considers that the thrust and parries on display would have impressed an Olympic fencer or even a busking sabre rattler. The first en garde manoeuvre came from David Powels, President of NAAMSA, whose day job is MD of VW. In his keynote address, titled “A reflection on the first year of the economic crisis”, Powels took government to task for not responding aggressively to the crisis, unlike their international counterparts, who have introduced a range of measures to assist their domestic beleaguered automotive industries. He pointed out that whilst the global crisis began 12 to 18 months ago, the seeds of South Africa’s troubles started three years ago, when vehicle sales hit a peak in 2006, based on a heady mix of low interest rates, a strong currency, pent up demand, and banks doing a credible impersonation of Father Christmas. The industry geared up for a strong run of vehicle sales, and therein lies the drama. With capital expenditure at record levels, but sales back to 2003 numbers, it is feast or famine. Thus the South Africa automotive industry is in a double bind, having geared up for higher volumes, and now staring down the twin barrels of a rather larger shotgun named recession and uncertianty. The problem, according to Powels, and he stressed that he was stating opinion rather than fact, is that current local content is only at 35%, and that the challenge is to get this up to 70%

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plus. Component manufacturers thus hold the key to the survival of the industry, and of course government can play a role in this dynamic. Another challenge is South Africa’s high cost base, which is as much as 40% more expensive than countries such as India and China. As if this is not challenging enough, South Africa has the added burden of port charges 10 times higher than China, and port productivity at shockingly low levels. Powels called for more transparency and more collaboration from Transnet, otherwise options such as the Maputo Corridor will become increasingly attractive. He also appealed to government to speed up the introduction of fuel quality standards, as our standards preclude the use of the latest engines, and thus the mooted emission based tax is basically putting the cart before the horse, and will unnecessarily increase car prices by two to seven percent. As Powels put it succinctly, “Put enablers in place before punitive taxes”. ABR translation: The emission tax is insanity! Powels warned that the honeymoon period for South Africa is over and that the silver bullets for survival are: • • • • • •

Increased volumes per platform Higher local content levels Supplier competitiveness Support from the IDC and programmes such as APDP for an “Industrialisation Strategy” Industry to improve productivity Massive investment in training and skills development

The response from government, in the form of Deputy Trade and Industry Minister Thandi Tobias-Pokolo, in her keynote address the following day, was “frank and honest”, and that there would be “no further funding for the motor industry”, as the South African government did not have the finances to provide extra money for the sector, as there were more pressing priorities, such as social spending (ed’s note: and rather large defence contracts). David Powels, President of NAAMSA, warns that South Africa must wake up to the reality of international competition. He predicts the demise of the South African automotive industry within seven to ten years if appropriate action is not taken in the next 12 to 18 months. November

2009

Panel Discussions: #1 Vision 2020 – is it a reality or a fantasy? #2 Does the automotive industry deserve a bailout? An excellent innovation at the Automotive Industry Conference was the introduction of panel discussions, involving industry heavyweights. This brilliant idea created inter-active participation and resulted in wide ranging discussions. After the discussions, the conference delegates got the chance to vote on the topics. The votes will not change the situation, but as a matter of interest, there were overwhelming majorities in carrying the votes. Vision 2020, which is the target of 1,2 million vehicles manufactured in SA by 2020, was perceived as a reality. Regarding the question whether the automotive industry deserves a bailout, the overall consensus was no! However, the question was a little unfair, as no one in the industry is actually asking for a bailout – all that has been requested is assistance to see the industry through troubling times.

ABR gives its readers some incisive quotes gleaned from the interaction:

Vision 2020 Johan van Zyl, President & CEO, Toyota Motors SA

“The world is not waiting for South Africa to play catch up. We are a can-do nation, and we need to negotiate free trade agreements with Egypt, Morocco, Nigeria, etc, not China!”

Bailout?

Brand Pretorius, CEO, McCarthy Holdings

“We are at a defining moment of our history – the future is not an extension of the past” Stewart Jennings, President, NAACAM “The

automotive component industry is in a severe crisis, and is a microcosm of the employment and manufacturing challenges facing South Africa, but we are facing an unsympathetic economic and government environment”

The Panel consisted of, from left, Gavin Maile, KPMG; Shakeel Meer, IDC; Johan Cloete (who stood in for Irvin Jim of NUMSA); and Mcebisi Jonas, Eastern Cape Province

Mcebisi Jacobs, MEC Eastern Cape Department of Economic Affairs Environment and Tourism

“Something more robust is needed” November

2009

Gavin Maile, Partner, KPMG Africa

“The industry does not want a bailout – it wants support!” 25

SAAW may start a new trend

Bob Dylan could have been singing about SAAW 2009 when he sang that “the answer my friend is blowing in the wind”. SAAW 2007 was the start of something great, but the experiment of building a giant tent town to house the exhibitors was both expensive and impractical. The maze of exhibition halls made for a disconnected tour, and the real problem was the “seasonal” Port Elizabeth winds. PE is known for its friendly breezes and its windy season runs from January to December, so for SAAW 2009 the decision was taken to host the trade show in a shopping centre’s parkade area. Going underground just got a new meaning, and who knows, SAAW may have started a new trend.

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nother trend that SAAW has already established is that it serves as a hook for other events. The AIDC chose SAAW 2009 for its annual automotive industry conference, NAACAM held its AGM during the conference, and a historic breakfast for suppliers was hosted jointly by the major OEMs, simply because of the convenience of having all the major stakeholders in the same place at the same time – government, OEMs, component suppliers, retailers, service organisations, etc. It is for this reason that SAAW is the only national event supported by the three big industry associations; NAAMSA, NAACAM, and the RMI. November

2009

Networking – Glitz, Glamour and Gala Dinners Networking was the name of the game at SAAW 2009. Opportunities abounded to have one on one discussions, group meetings both formally and informally, and of course the exhibition hall itself was the place to find things old and new, and to meet and make business friends. And what is an automotive show without cars.

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atchmaking was an integral part of SAAW2009, and this was facilitated by a Match-making Meeting Programme and the provision of Matchmaking Meeting Rooms, available all through the show, from Wednesday 7th October to Saturday, 10th October. The Gala Networking Dinner was also a great success, where guests from across the spectrum could let their hair down, and to network in a relaxed environment.

November

2009

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Navigating the Storm through Development The strategic focus of the AIDC is Supply Chain Development, Supplier Development, and Skills Development and Training. To this end, day two of the automotive industry conference was devoted to these three subjects. Space constraints do not allow ABR to go into great detail, so we give you small bites of these mini-conferences: Supply Chain Development – Creating a winning global location strategy for South African automotive suppliers Gavin Maile, Partner - KPMG Africa Automotive Practice Leader, presented this paper and he said that the cycle of globalisation of automotive supplier operations is continuing, through suppliers expanding their operations across borders, and even moving existing capacity across borders. Despite this, or maybe because of this, this globalisation is done in an ad-hoc fashion and cognisance is not always taken of both the risks and opportunities, thus many companies exhibit a strategy deficit. South African component suppliers can use an integrated strategy that balances the competing drivers of growth, costs, innovation and risks, and one that considers the advantages and disadvantages of location decisions in the light of the intrinsic nature of a business.

to have HR strategies in place, focusing on development, talent retention and BBBEE. To close the skills gap, a holistic approach must be adopted. Absolutely critical to this strategy is the provision of training centres, comprising a main campus, shop floor centres and a commitment to continuous learning. Key aspects of this holistic approach are quality of supervision, employee wellbeing, morale and stability, communication, and company values and ethics.

Supplier Development – Tirisano Cluster Programme Awards

Johan Erasmus, Managing Director of Automotive Training Academy

The Tirisano (Working Together) Programme has been on the go for quite a few years, and the results in cost savings and productivity gains have been impressive. Each year the AIDC presents awards to the best performing companies, and this year was no exception.

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Skills Development and Training - Evaluating the Skills Gap towards realising Vision 2020

HIV and AIDS Survey

Johan Erasmus, Managing Director of Automotive Training Academy, gave some startling statistics in his presentation. The age profile of artisans and technicians in the industry is well over 50. Compounding this reality is the shocking estimate that only 9% of the 2008 matriculants have been able to find formal employment. Despite this, Johan warned that the work ethic amongst the youth is low. His advice to companies in the sector is

The AIDC used the conference as an opportunity to conduct a baseline study to get a snapshot view of the South African automotive manufacturing companies’ awareness and responses to the HIV and AIDS pandemic. The results of this survey will be presented on a national basis, but disaggregated to show employer responses per company size, skills level, and by province. November

2009

NAACAM not happy chappies ABR met Roger Pitot, Executive Director of NAACAM, at the NAACAM stand, and asked his opinion on the current crisis, and government’s response to date. He said that whilst bridging finance has been provided through the IDC, and the Department of Labour had announced a scheme to assist employees on short time, this was not enough. Pitot put it frankly, “We are disappointed. In February this year, I did a survey and every government around the world had formulated responses to deal with their distressed automotive sectors and manufacturing in general, also implementing other indirect measures, such as cutting rates. It seems our government does not know exactly what to do to respond.” The situation is serious, and he added that OEMs insistence on price reductions in this environment, together with delays in payment, compounds the difficulties.

Boost for automotive suppliers Supplier development in the automotive industry has been given a R23,5-million boost through a partnership between the Department of Trade and Industry (dti) and the United Nations Industrial Development Organisation) UNIDO. The funding – announced at the AIDC Automotive Industry Conference 2009 at SA Automotive Week - will expand the scope of the existing business partnership programme run by UNIDO and the Automotive Industry Development Centre (AIDC) since 2003. The funding has been committed over a three-year period and is in line with UNIDO’s strength in cluster development. “The SA automotive industry is our leading manufacturing sector, but local component suppliers are under continuous pressure to improve their performance or lose business to competitors in other emerging economies like Brazil, China and India. We aim to support these suppliers in becoming globally competitive,” says UNIDO representative Tom Kenyon. “In the past five years the AIDC has implemented the Tirisano programme at over 45 companies, training more than 4,000 shop floor workers on basic lean principles and world-class manufacturing. The ultimate beneficiaries of this project will be Tier 1 and Tier 2 SME and BEE component suppliers in the SA automotive industry,” says Barlow Manilal, AIDC CEO . “Speaking at the announcement, National Association of Automotive Component and Allied Manufacturers’ executive director Roger Pitot challenged the provincial governments of the Western Cape and KwaZulu/Natal to also provide support for their local auto sectors.

November

2009

Provincial Slugfest The competitive spirit was alive and well at the SAAW 2009, and it was best illustrated by three regions slugging it out to catch the attention of foreign visitors and the media. Each corner of South Africa wants its slice of automotive industry action, and those who started a little late are playing catch up fast.

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auteng has the most established supplier park in the country, so it was no surprise to see the opening slot at the AIDC conference go to Amanda Nair, CEO of Blue IQ. Amanda set a positive tone for the conference with the announcement of BMW’s R2,2 billion investment in its plant in Rosslyn (with strings attached), and she jokingly set a challenge for other OEMs and component manufacturers to “equal or better” this investment – in Gauteng, of course. BMW’s decision was no doubt made easier by the Supplier Park infrastructure right on its doorstep, and this must have served as a red rag to a bull to the assembled delegations punting the East London IDZ, the Maputo Development Corridor, and the Coega IDZ. ABR gives a brief overview of these three initiatives, and will go into far more depth in upcoming issues. Amanda Nair, CEO Blue IQ, challenged the industry to “equal or better” BMW’s investment.

Charging Like a Buffalo East London may be the 90 pound weakling in the city stakes, but it more than makes up for its size with enthusiasm and innovation. Definitely the team with the best spirit at the SAAW, the East London IDZ also made the major announcement at the show, by unveiling its innovative model for the automotive sector – a multi-OEM assembly facility which has already attracted interest from companies in India, China and South Korea. This facility will help those companies who have not yet reached critical mass in terms of volume in South Africa, and of course the bigger carrot is for this to be used as a springboard for export to Europe and the USA, taking advantage of AGOA, etc.

No Harbouring of Doubts When it comes to ports, Port Elizabeth is doing its New York, New York thing. Not satisfied with one harbour, PE has gone ahead and built a new state of the art port at the mouth of the Coega River, just 20km up the coast from its Baakens River brother. And it looks like the Coega Development Corporation loves doing things in twos. It also has two zones for automotive industrial development – the Nelson Mandela Logistics Park situated three kilometres away from the VW plant in Uitenhage, and Zone 2 at the Coega IDZ at the Port of Ngqura. All part of a multi-billion rand initiative aimed to position South Africa as a platform for global manufacturing and export through foreign and local investments. Gustav Meyer, Business Development Manager: Automotive and Logistics, Coega Development Corporation, briefs guests at the corporation’s spanking new premises located in the Coega IDZ.

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Tembela Zweni, ELIDZ Executive Manager: Business Development; Corrie Kotze, AIH Consulting; and Simphiwe Kondlo, ELIDZ CEO, announce the exciting multi-OEM model

November

2009

Corridor of Certainty Mpumalanga has relied in the past on its agricultural, mining and tourist strengths, but now its geographical location means that its future fortune is inextricably bound to the success of the Maputo Corridor. With a drive for diversification, under the rallying cry of Linking Opportunities, Creating Growth, the Maputo Development Corridor Flagship is one of the “big five” flagship programmes identified by the Mpumalanga Provincial Government for economic growth, encompassing initiatives such as the Secunda IDZ, Truck Stops, Priority Feeder Routes, Food Technology Centre, Middelburg IDZ, Komatipoort Dry Port and Rail Passenger Border Clearance Facility. Blessing Manale, CEO Maputo Development Corridor Flagship, hosted a cocktail evening, and at the event made the offer to host the next SAAW and AIDC Automotive Industry Conference.

November

2009

The Crown Joule A star attraction at the show was the much hyped Joule electric car, which many South Africans hope will become the crown jewel of our automotive industry. Kobus Meiring, CEO of Optimal Energy, gave his well polished delivery of the many pros of the electric car in his slot “Breakthrough automotive greening technology”, emphasising his belief that batteries and renewables are the new oil. Kobus is a passionate flag bearer for the electric vehicle, and he quotes Victor Hugo to make his point, “No power on earth can stop an idea whose time has come”. If this is true, then South Africa can be at the forefront of this revolution, as there are many spin-offs to the electric vehicle.

The Joule in all its glory

Kobus Meiring, CEO Optimal Energy

Formula S gives university students a chance to show their talents

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he Nelson Mandela Metropolitan University made its presence known at SAAW, and if anyone cared to dig a little further, they would have found out that NMMU is the only university in South Africa that is planning to race at the Formula S event in Germany in August 2010. Formula S stands for Formula Student, and has no connection to that old shaggy dog story of the customer who orders a souped up VW Beetle with the proviso that a large S be painted on its bonnet. Upon taking delivery of the car, the salesman enquired as to the reason for the large S, to which the customer replied that he wanted people to exclaim as he zoomed past, “Did you see that S car go!” ABR is very interested in this project, so after the show we moseyed down to the university’s south campus, to get more information. We found that the Volkswagen South Africa – DAAD International Chair in Automotive Engineering had allocated offices and furniture and equipment to the

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Mechanical Engineering, and they have the bitter sweet task to get a team of young bucks to gel into a formidable unit, with the goal of participating in Formula Student Germany 2010 in Hockenheim in August 2010. All very inspiring, and ABR shall give our readers more details in upcoming issues, and we shall also follow the action on campus, and keep our stakeholders up to speed (excuse the pun) on the comings and goings of the little Schumis.

Mphathisi Colwana and Alison Richter are two of the student engineers on the Formula S team. Mphathisi is responsible for the cooling system, suspension and brakes, whilst Alison looks after the fuel tank, ergonomics and safety aspects. venture, and that students had been drawn from various faculties to participate. NMMU Racing’s two project managers are Trevor Stroud and Howard Theunissen, lecturers in the university’s Department of

Howard Theunissen and Trevor Stroud are the project leaders for NMMU Racing.

November

2009

The Party Poopers by Austin Gamble

ABR’s Austin Gamble attended the AIDC Automotive Industry Conference 2009, and he gives his unique take on the topics and presenters, and his views on the punctuality and even worse, the nonattendance of certain individuals.

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’m a little old fashioned, and I believe that if you have accepted an invitation to attend an event, that once you have committed, you should move heaven and earth to meet this obligation. And it doesn’t matter who or what you are. In actual fact, the higher your exalted position, the higher the obligation! I also believe that your performance on these parameters is a very good indication of your character and your trustworthiness. On this premise, there were some unfortunate slips of protocol perpetrated by those who should know better. Or do they know better? I was not privy to the why, who or where, but judging by the looks on the faces of some of the organisers, it was obviously last minute stuff, and in one particular case, this was confirmed inadvertently. And taking my line of thinking a little further, maybe some of the nonattendees had good reason for not attending. Take Mr. Irvin Jim, the National Secretary of NUMSA, for example. He was supposed to be an integral part of the panel discussion on whether the South African automotive industry deserves a bailout. His absence left a gaping hole, as his participation in the discussion was a vital element. Johan Cloete, an independent consultant, was roped in at the last minute, and whilst he did an admirable job doing his chameleon act turning from a hard working consultant to an Arthur Scargill wanabe, he simply could not lend credibility to the role, giving careful and measured responses, a most ununion thing. It also got me thinking that he was in reality scab labour, oh heavens above. And there were hard questions to be answered, which Mr. Jim had conveniently ducked. Not so convenient for the organisers, who announced at the commencement of the discussion that Mr. Jim had phoned in 30 minutes earlier to give his apologies. Extremely enlightening, as the conference was running an hour late, so either Mr. Jim had phoned in half an hour late, or the organisers were telling a November

2009

little fib to make him look reasonably well mannered. I have drawn my own conclusions, and they are not flattering. Take these two questions submitted by the delegates for example: 1. Why do the unions insist on wage increases and benefits that make us less competitive – don’t they understand we compete globally? 2. Why do the unions go on so many strike actions for wage increases so much above CPI, and damage South Africa’s image and turn away investment?

On a lighter note, I have to admit that at long conferences such as the AIC, the mind does wonder sometimes. I was guilty, I’m afraid. It all started with a nagging feeling that Johan van Zyl reminded me of someone famous. Eventually the penny dropped. Joachim Phoenix! Don’t think so? Go and look at the movie Gladiator, or Walk the Line. This got me going in a bad direction, and I started to have a good look at the other panellists on the Vision 2020 debate. See if you agree with me, by matching our brainy guys with these actors/luminaries:

Hot potatoes, which may have made Mr. Jim uncomfortable. I’m sure that he would have handled them with the predictable rhetoric, but why go through this if you can just stay away? The problem is that the panel discussion was the poorer for it, and the delegates were short changed. Similarly, Minister Rob Davies bailed out at a late stage, leaving the unpalatable stuff to his deputy, which does leave a distinctly unpleasant odour. And the conference ran an hour late, not because of the tardiness of the organisers, but because of the late arrival of MEC Jonas, who was to do the official opening. Sure, the traffic was bad, but everyone else made it. The picture is becoming clearer, much clearer. And to me, at least, it explains many things, about Transnet lethargy, Eskom hubris, municipal rate hikes, etc.

Irvin Jim, National Secretary, NUMSA. For those delegates who were hoping for the privilege of seeing him, this picture is a far from satisfactory substitute.

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Yes We Can

After two jam packed days of information overload, debate both sedate and intense, and introspective soul searching, the 2009 AIDC automotive industry conference ended not with a bang, but with a whimper. A visibly exhausted Barlow Manilal, CEO of the AIDC, closed proceedings with a summary of the outcomes of the conference, of which the general consensus was that it had been a worthwhile exercise, and that despite the negative economic environment, the industry was down but not out, and that it did have the ability to navigate the storm. In the words of Barack Obama, it was agreed that “Yes we Can”. The key points that came out of the conference were that •

Barlow Manila, CEO of the AIDC, after The automotive industry is a key sector in the manufacturing sector of South an exhausting two days, brings the conferAfrica ence to an end.

•

The government has the responsibility to create an enabling environment for the industry to go ahead and create growth and jobs

•

Collaboration between government and the private sector is now needed more than ever

•

It is now absolutely vital to grow and protect investment in the manufacturing sector

•

Investment in the industry needs to be focused and prioritised

All good and well, but what is really needed is less talk and more action. The AIDC conference was an important and necessary talk shop, but the benefits of the conference will only be clear when all the affirmations are realised. The key is government’s commitment and its translation of words into action. Extremely concerning was the quote from the Deputy Minister of Trade & Industry, who made the telling enquiry, “What makes our production special when compared to Brazil?” It may have been a rhetorical question, but the simple answer from all should be, “Because it is OUR production!”

Automotive Site Visits

A trailblazer berthed at Ngqura

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n the 9th October, delegates had the opportunity to visit the Volkswagen plant in Uitenhage, the Nelson Mandela Bay Logistics Park just a stone’s throw away, and the Coega IDZ. ABR went along for the joyride. Some of the highlights of the tour included a visit to the Volkswagen Museum at the Pavilion, in which one could indulge in a little nostalgia, and the sighting of a ship berthed at the Port of Ngqura. At the time of the visit, only two ships had visited the port since its opening in October 2009, so this was indeed an auspicious occasion.

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At the VW Museum, some nostalgic speed and some nostalgic relaxation

November

2009

What’s

the

Buzz?

BMW Looks Ahead Following in-depth negotiations with government, the BMW Group has announced that it will invest an additional R2.2 billion at BMW Plant Rosslyn, triggering the introduction of the newest BMW vehicle and production technology at the Plant and within its local supplier network. The investment will enable maximum plant capacity to increase from 60 000 to 87 000 units, while securing production in South Africa for the future. The investment announcement follows the signing of a Letter of Commitment with the Department of Trade and Industry (the dti), which will honour the investment under the new support scheme for the motor industry, the Automotive Production and Development Programme (APDP). The APDP will replace the current support programme for the automotive industry, the Motor Industry Development Programme (MIDP), in 2012. At the same time, the German automaker announced a training program for 1,100 associates at Plant Rosslyn. The BMW Group has a long history in South Africa, rich in major milestones, and has had a local presence since 1968. BMW Plant Rosslyn became the BMW Group’s first manufacturing facility outside of Germany in 1975. The company was also the first South African car maker to adjust its entire production configuration to begin an export programme in 1994, ahead of the announcement of the MIDP.

KenKen 3 X 3 How to Play: Like Sudoku, even though difficulty may vary from puzzle to puzzle, the rules for playing KenKen are fairly simple: For a 3 x 3 puzzle, fill in with the numbers 1-3. • Do not repeat a number in any row or column. • The numbers in each heavily outlined set of squares, called cages, must combine (in any order) to produce the target number in the top corner of the cage using the mathematical operation indicated. • Cages with just one box should be filled in with the target number in the top corner. • A number can be repeated within a cage as long as it is not in the same row or column. Answer on page 45 November

2009

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A series of articles on the rise of the Chery automobile

New Chery J1 Packs a Big Punch at an Affordable Price

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hery South Africa is set to make an even bigger impact on the local market with the launch of its new J1 hatchback. The range consists of two models; the J1 1.3 TE and the top-of-the-line J1 1.3TX. Starting at a class-leading price of R109 900, both vehicles are equipped with power steering, air conditioning, alloy wheels, as well as critical safety items such as dual airbags and ABS with electronic brake distribution. “We believe that since the brand was first introduced in South Africa in May 2008, it has changed expectations in the entry-level

36

segment of the market,” said Brett Soso, Managing Director of Chery SA, a division of Amalgamated Automobile Distributors. “The Chery J1 is set to continue this trend and reinforce our commitment to provide value-for-money motoring to South African vehicle owners moving into the next segment of the market up from a Chery QQ3.” The Chery J1 is certain to cater for those who have high expectations in their daily vehicle. Its balance of style, practicality and affordability will be unmatched in the marketplace and it has its sights firmly set on being a winning combination. “We believe the J1 is a super package and we haven’t compromised on specification and safety to get the price down,” said Soso.

Designed in Italy, Chery J1 is the first global vehicle from the Chinese automaker and is aimed at providing stylish, affordable motoring to consumers in Europe, North America, Asia and of course, South Africa. It features a brand new fuel injected 1.3litre petrol engine, uniquely developed by Chery that will beat off many of its key rivals when it comes to power and fuel economy. The new 4-cylinder Acteco powerplant, which is Euro III compliant, provides 61kW at 6 000r/min and 114Nm of torque between 3 800 and 4 500r/min, while also ensuring less visits to the petrol pump with an average fuel consumption figure of just 6.7/100km. While a great focus has been placed on providing the J1 with a potent and efficient engine, it is in the specification that it truly excels.

November

2009

Large angel eye headlamps light your way ahead at night, while safety is bolstered further by the inclusion of ABS with EBD, dual airbags, side impact protection bars and high mounted brake light, many of which are simply not usually available in this class of vehicle. Reverse park control is available as standard on the TX-derivative. The J1 has also been subjected to rigorous testing in line with international standards. This includes numerous tests at the National Centre of Supervision and Inspection on Motor Vehicle Products Quality in Shanghai. Extensive evaluations have also been conducted in South Africa to test the vehicle’s durability and quality under local operating conditions. The onboard computer keeps you informed of all the essential information on your journey, while manual air conditioning keeps you cool in summer and totally unaware of November

2009

the chill in winter. The instrumentation has been designed to be aesthetically pleasing while also being fashionable giving a more upmarket feel to the cabin ambience. A CD-player audio system with USB port is also standard on both models. Quality materials pervade the interior with plush carpets and door inlays, while the seats have been ergonomically designed to provide maximum comfort for all passengers. Power steering makes manoeuvring around the city a breeze and a turning radius of just 4.75m ensures effortless parking in even the tightest of spaces. The J1 range is equipped with central locking by remote with the TX having the added ease of convenience locking. All the seats in the J1 can be manually adjusted and the steering column’s rake can be adjusted to suit the driving position. In addition, the J1 1.3 TX also has front and rear electric windows as well as electric mirrors.

The Chery J1 1.3 TE retails at R109 900, whilst the 1.3 TX comes in at R116 900. The Chery J1 range has a 3-year / 100 000km warranty. Service intervals are at 15 000 km and the range has a 3-year / 75 000 km service plan as standard. Chery is continuously aiming to provide customers with a good value proposition, not just in terms of their initial purchase, but also in the overall ownership experience. The company therefore has a well-established dealer network in place, with over 30 full service dealerships. This network is constantly being expanded to give Chery complete national representation and customer convenience. Chery South Africa offers a range of vehicles to suit the individual tastes of the country’s motorists, and every Chery car presents a combination of unbeatable value and quality.

37

Tony’s

Take

The OYLEY Price of Oil by Tony Twine, Senior Economist, Director – Econometrix (Pty) Ltd

An article by Yoshiaki Nohara and Ron Harui on the Bloomberg financial news service, dated 6 October 2009, sent world currency markets into near panic mode, with the SA Rand appreciating from R7.63 the day before to R7.39 that evening (both SA time). The news quoted the UK based Independent Newspaper, saying that the Gulf states might be considering quoting oil prices in a combination of Yen, Yuan, euro and gold. Effectively, this would become an artificial currency, which we could christen the Oyley, derived from Oil price in a combination of Yen, Librae, Euro and Yuan.

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hy Librae, you may ask? The Librae is a singular version of this old measure of weight, also called a tower pound approximating 32 grams, close to a Troy ounce, which is the unit of measure of traded gold. That is from where the stylized letter L, previously employed to denote Pound Sterling, was derived. The graph shows smoothed index values of a composite artificial currency made up of equal weights or proportions of the gold, euro, yen and yuan prices of crude oil during the current decade. The first bad bit of bad news for the artificial currency planners is that such an equally weighted artificial currency would not have produced anything resembling a stable currency for the price of oil. The next thing for them to consider would be how to create the artificial currency, or OYLEY. If it is based on gold and the other currencies, every OYLEY unit that they wished to create, even if it was only created on paper, would have to be backed by the

38

proportion of the base currencies from which it would be derived. This would be in setting up a central bank for the OYLEY, which would hold reserves of the commodities and currencies upon which the OYLEY was to be based. We could anticipate some costs in this regard. Suppose that all that was done, and foreign oil buyers could purchase OYLEY’s from the OCB (OYLEY Central Bank), with which to settle their liabilities to the oil suppliers. The oil suppliers would then sit with large amounts of OYLEY’s and may even be able to pay taxes to their respective governments in those self-same OYLEY’s. But then comes a snag – if they want to buy anything outside of the OYLEY currency market, they have to exchange OYLEY’s for an internationally accepted currency. The most commonly accepted means of international trade and capital movement settlements is the US Dollar, so an exchange mechanism between the OYLEY and the Dollar would quickly emerge. If the OYLEY was not exchangeable, it would be about as useful as the Zimbabwe Dollar. Of course, the OYLEY would come to

reflect all the pressures present from time to time on the constituent items like the Gold price, upon which it is based. With settlements in Dollars, the Gold price of oil is capable of fluctuating very substantially, so the OYLEY price of oil would be subject to similar fluctuations, driven by the Gold portion of the OYLEY base. It seems like an awful amount of trouble to achieve virtually nothing. But the fun would only just be starting at that point. Private banking systems would very quickly find ways to multiply the numbers of artificial currency units that they may come to hold. Derivative traders would begin writing options and futures contracts from the exchange rate of the OYLEY against most major and minor currencies around the world. We could expect then, just as there has been in the history of the Euro, tussles between the oil producing governments regarding the rates of creation of units of OYLEY currency. Out of the fried chicken pan, into the oil fire.

November

2009

weighty

by Frank Beeton

issues

TRUCK SHOWS – A THORNY ISSUE On Wednesday, September 30th, 2009, representatives of the commercial vehicle industry, their suppliers, and the specialist press, made their way to the Tshwane Events Centre (you may know it better as the Pretoria Showgrounds) to attend the launch of The HeavyWeight Expo. This event, scheduled to run from 23rd to 26th March, 2010, was described by organisers TSHWABAC as an “exhibition-cum-conference dedicated to the heavy equipment sector in South Africa”. The target universe was defined as “the heavy vehicle, bus, construction plant and equipment, special and agricultural vehicle sectors”.

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n South Africa there has been much recent debate over the relevance of truck shows. There is a body of opinion that views participation in the Johannesburg International Motor Show (JIMS) or its Auto Africa predecessor, as less than ideal for heavier commercial vehicles, primarily because that ten day exhibition is shared with the light vehicle community, takes truck people away from their day jobs for too long, and exposes (expensive) exhibits to wave upon wave of “tyre kickers” and brochure collectors. The alternative of adding a truck section to the more trade-focused Automechanika Johannesburg early in 2009 clearly did not work, particularly as it was held only a few short months after JIMS, so no obvious solution has emerged up to now. The organisers of HeavyWeight Expo obviously believe that they can offer the ideal compromise, in a year in which there will be no JIMS event. The chosen venue is a lot less intimidating than the vast halls of NASREC, but can easily accommodate the truck and bus suppliers, body and trailer builders and allied suppliers that make up the target market. However, it is significant that this event carries the endorsement of the Retail Motor Industry (mainly dealers), and not the National Association of Automobile Manufacturers of South Africa (NAAMSA), who now “own” the JIMS show. This raises the question whether NAAMSA will have a benign attitude to Heavyweight Expo, or if they will see it as a threat to their own event.

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My own hands-on experience with truck shows goes back to the Royal Agricultural Show in Pietermaritzburg during the Nineteen Sixties, and extends through various Sugarmechs, Timbermechs, Rand Shows, ITEC Shows and Auto Africa exhibitions. Contrary to popular belief, very few large fleets of trucks are sold off show stands in spontaneous “walk-on” deals, although this myth has been carefully perpetuated in countless press releases. The real value of shows is to provide relaxed interaction between suppliers and their clients, who are shipped in to enjoy hospitality on the stands. Exhibitors also use the opportunity to build their image by showing off new technologies not yet available on the local market, although most of their star customers would already have seen these on hosted overseas tours. Despite the valid concerns about the suitability of Auto Africa and JIMS for truck and bus exhibitions, there can be no doubt that the standard of displays has risen perceptibly since these shows have catered for both light and heavy vehicles. Truck-only shows have a tradition of being more of the “boerewors-and-beer” pattern, which was clearly not compatible with car exhibits featuring plush carpets and squads of scantilyclad young ladies. The incidence of professionally-built truck stands, with imported displays, has increased markedly since ITEC gave way to Auto Africa, and in those cases where light and heavy vehicles are distributed by the same organizations, there has been plenty of scope for the sharing of

facilities. Out-of-town based industry executives have also valued the opportunity to attend one show that covers both aspects of their business. It is a moot point whether distributors can justify supporting truck shows every year, so if HWE is successful, it could impact on the trucking side of JIMS. Exhibitors will need to decide which format suits them best, but there is likely to be considerable pressure from NAAMSA on their members (most of the major manufacturers and brands) to continue supporting JIMS. In the past, where certain companies have chosen not to participate in the major shows, their competitors have been more than happy to point out their absence to mutual customers. A further complication lies in timing, as it is unlikely that major new product launches will always be able to coincide with events timed by show organisers to suit their own priorities. In the past, major manufacturers often organised standalone events at more appropriate times, and also to ensure closer control of their visitors. After all, anybody attending a show wants to look around, irrespective of who paid for his travel to the show or his entrance ticket! There are many issues to consider, and it will be intriguing to see how this dynamic plays out. In the particular atmosphere of 2009, with vehicle sales still near the bottom of the cycle, costs may be a crucial factor, but it is likely that the long-term outcome will be dictated by strategic issues. Time, alone, will tell!

November

2009

health

care

An update on Moto Health Care You may recall that in the July edition of ABR Roseanne Da Silva, Moto Health Care’s consulting actuary gave us an insight into the process followed to determine the benefits and the budget for the following year. I am pleased to announce that this review process has now been completed for 2010.

S

adly the Scheme is expected to incur an underwriting deficit for this year. The key contributor to this deficit is the Classic option. This deficit would be substantially larger if it was not being mitigated by an improvement in the position of the Custom option. The Hospicare and Optimum options are also operating at deficits. Further there has been a reduction in the total membership for the year to date of 11% largely brought about by a clean up of data conducted by the current administrator, loss of employment and affordability, a direct consequence of the economic downturn. The Trustees adopted the following principles to determine the benefits for 2010: • • • •

To offer a comprehensive range of benefits; To ensure that the options are distinct in their benefit offerings; To minimise the risk of buy-down by higher claiming members; To achieve a breakeven financial result.

Guided by the above principles and after many meetings the benefit design team has proposed the following amendments to the current benefits:

Optimum. This option is aimed at high income earners and offers a comprehensive range of in and out hospital benefits. The adjustments for 2010 are as follows: •

•

• • •

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Cover for in hospital specialist costs will be at 200% of the National Reference Price list; A R850 co-payment on specified scope procedures except where the member uses a Designated Service Provider (DSP); The limit on maternity benefits will be removed; Inflationary adjustments to all financial limits; The DSP providers must be used for treatment plans for chronic patients (for the 26 chronic disease list (CDL) conditions)

Hospicare. This option is targeted at younger, middle-income members who do not require out of hospital benefits. In order to contain costs on this benefit option the benefits are accessible through a network of Designated Service Providers (DSP). The adjustments for 2010 are as follows: •

•

Classic.

This option has been restructured in line with trends in the market for those targeted at middle to high income earners looking for comprehensive cover and flexibility in their benefits. The category B limit has been converted to a savings account basis. The level of annual savings is equivalent to the current level of the category B limit and the savings structure has the advantage of members being able to carry any unused portion of the benefits forward to the next year for their own use. Members will also have greater flexibility in determining how they use their out of hospital benefits. The adjustments for 2010 are as follows: •

•

•

• •

•

•

Cover for in hospital specialist costs will be at 150% of the National Reference Price list; Chronic cover will be extended to include 8 additional conditions (with a limit of R2675 per beneficiary and R5350 per family on these benefits); There will be a R850 co-payment on non PMB (Prescribed Minimum Benefits) in hospital procedures except where the member uses a DSP; The maternity benefit limit will be removed; Out of hospital benefits will be paid from a savings account where 22% of contributions are allocated to this; Appliances and prostheses will be covered by the Fund with inflationary adjustments to the limits: The DSP providers must be used for treatment plans for chronic patients (for the 26 chronic disease list (CDL) conditions).

•

Cover for in hospital specialist costs will be at 100% of the National Reference Price list; Members will be required to use a Designated Service Provider (DSP) for in-hospital treatment and for their chronic benefit treatment plans (for the 26 chronic disease list (CDL) conditions). A25% co-payment will apply for other providers; The maternity benefit limit will be removed.

In next month’s article I will deal with the Custom and Essential options and share with you the key elements of the 2010 budget. At the time of writing this article, a road show is being planned to introduce the new benefits for 2010 to stake holders and to receive input from them. I trust that at least some of you will have made an effort to attend one of the road show presentations.

Barry Canning, Chairman Board of Trustees - MOTO Health Care November

2009

MISA

Update

– STATEMENT TO CONTRIBUTORS –

MOTOR INDUSTRY RETIREMENT FUNDS (Administered by : MIFA (Motor Industry Fund Administrators (Pty) Ltd.)

Recently, Mamodupi Mohlala the former Pension Funds Adjudicator publicly introduced a ‘so-called’ SCORE-CARD against which she rated 290 of the country’s 13 000 registered retirement funds, in an attempt to gauge their performance.

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he Adjudicator was not appointed to usurp the functions of the FINANCIAL SERVICES BOARD, the Body that regulates the Retirement Industry, but merely to deal with member complaints against their funds.

This limited role of the Adjudicator was publicly acknowledged in the press by Mr. Jurgen Boyd, the Deputy Registrar of Pension Funds, who further stated that the retirement industry is in good health and that the threat issued by the Adjudicator that funds performing poorly in terms of her scorecard, “could have their licences revoked”, is a non-issue, as Pension Funds were not licensed entities. Funds were merely required to register with the Financial Services Board for regulatory purposes.

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MIFA administers two Pension Funds (defined benefit Funds) and two large Provident Funds on behalf of the retail motor industry employees. The total active membership is 200 662. During the past twelve months no less than 38 000 claims were successfully finalised by the Funds’ Administrator. Any attempt by Insurance Brokers/Agents to capitalise on the score-card publicity must be seen as pure opportunism. It is a fact that frivolous cases are often referred to the Office of the Adjudicator. It is also a fact of life that nobody has any control over the submission of a frivolous complaint, totally devoid of substance. Both the Funds and the Office of the Adjudicator simply have to deal with it and inform the complainant of his/her legal rights and benefits available in terms of the rules of the relevant fund.

However, the TRUSTEES responsible for the management and administration of the MOTOR INDUSTRY RETIREMENT FUNDS were appalled to learn that the Motor Industry Pension and Provident Funds had been included in her list of 20 “most poorly rated funds”.

Even if all known complaints, whether frivolous or not, are taken into account it would represent only 0.12% of the entire membership served by MIFA! Most importantly, the

Her public utterances and rating of the industry have been poorly researched and unfounded. They are both damaging to the retirement fund industry and irresponsible. A public apology and retraction would be appropriate.

Pension Fund’s Adjudicator has not found it necessary to issue a single determination against ANY of the Funds administered by MIFA over the past two years! Over the past ten years only one determination went against us!

The Motor Industry Pension Fund was merged some four years ago with two other pension funds to create a closed pension fund of some 8 000 pensioners. At the same time the Motor Industry Provident Fund was established currently with some 40 000 members. Both funds function extremely well and are closely monitored by the TRUSTEES, the Fund’s ACTUARY, separate firms of EXTERNAL and INTERNAL AUDITORS and most importantly THE FINANCIAL SERVICES BOARD in its role as regulator. The MIFA Management and Board support sound governance principles and ongoing monitoring by the FSB, valuing the impeccable relationship developed over the years.

The TRUSTEES are deeply disappointed that the outgoing Pension Funds Adjudicator, in her enthusiastic attempts to promote her “score-card” legacy, made public utterances, damaging to the good reputation of our Funds (earned over some 56 years) without proper prior research. We refute in the strongest terms the inclusion of any of the Funds administered by MIFA in her list of twenty poorly rated Funds. Issued by the BOARD OF DIRECTORS OF MIFA AND TRUSTEES OF THE FUNDS UNDER ADMINISTRATION BY MIFA.

November

2009

Benteler Automotive brings investment and jobs to Uitenhage Benteler Automotive has announced a R178 million investment, which will bring with it 250 jobs, into the Nelson Mandela Bay Logistics Park in Uitenhage. The company is the ninth investor into the Park, and will directly supply to next door neighbour, Volkswagen of South Africa. Benteler Automotive will produce dashboard carrier panels and body parts, front and rear bumpers and chassis parts to VW of SA. “Benteler’s supplier status forms part of Volkswagen of South Africa’s business strategy to increase the local content of vehicles manufactured for both the domestic and export markets. The company’s all-out initiative is to achieve 70% local content in its South African produced vehicles,” said VW of SA Managing Director, David Powels. “In addition to the local content benefits the company’s investment brings to VW of SA, it is also beneficial to the region due to the skills transfer that will take place from a multinational such as Benteler. We welcome and congratulate Benteler on their investment in the region,” continued Powels. Construction of the company’s 19 125m2 facility started on 1 October, and the scheduled date of completion is June next year. The company will start to install its equipment in March, and it expects to start production by mid-June. The total size of the company’s property is 50 000m2.

OVER INFLATION COSTS TYRE LIFE, TRACTION Over-inflating your car’s tyres will cost you money and could affect your safety on the road, according to SA tyre maker Bridgestone. Romano Daniels, General Manager of Group Communications and Marketing, explained that tyres are designed to function best when correctly inflated. “If tyres are pumped too hard, they start to bulge in the centre of the tread,” he explained. “That means the shoulders are no longer in proper contact with the road and that the centre of the tread has to carry the entire load of the tyre. This is why over-inflated tyres wear so much faster in the middle,” he said. Daniels also explained that the reduced contact patch can have serious safety implications. He said that the tyre’s resistance to road debris might be reduced; meaning a sharp stone or nail might puncture the tyre more easily. He also said that the road holding of a car with over-inflated tyres would be compromised. Daniels recommended that motorists check their tyre pressures at least once a week and inflate them to the manufacturer’s recommended values using an accurate tyre gauge. “Consult your owner’s handbook to ensure the pressures are correct – you’ll be extending your tyre life and ensuring that your car handles safely and predictably,” he concluded.

Answer from page 35

November

2009

45

Schaeffler Shorts

The Timing is Right INA was founded in 1946 by Dr. Georg Schaeffler, together with his brother Wilhelm, in the town of Herzogenaurach (near Nurenberg) in Germany. Three years later, Georg Schaeffler put INA on the world map by developing the needle roller bearing with cage assembly, which made the needle roller bearing a reliable component for automotive and industrial applications. In 1965, INA invested in a new company named Luk (Lamellen und Kupplungsbau GmbH), which was situated in Bühl, near Baden-Baden in south western Germany. INA eventually took full control of LuK in 1999, and in 2001 it continued with its acquisition activities with the acquisition of FAG Kugelfischer Georg Schäfer AG, Schweinfurt. FAG (Fischers Aktein-Gesellschaft) is an iconic brand registered in 1905, and Friedrich Fischer, the first man to manufacture absolutely round steel balls, is credited as the man who gave Schweinfurt its status as the ball bearing capital of the world. In 2002, FAG, INA and LuK were merged to form the Schaeffler Group.

The Schaeffler Team, left to right: Cavin Hearne, Product Manger Bearings; Phillip Erasmus, Customer Service Manager; Daniel Wolff, Business Development Manager, Engine Componentry, Schaeffler Group Automotive Aftermarket; Tim Langdon, General Manager Automotive Aftermarket

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he reason for this historic introduction is because whilst the South African automotive industry is fully aware of the LuK and FAG brands, the INA brand has tended to take a back seat in our neck of the woods, primarily through historical circumstances. This oversight has meant that the INA brand’s worldwide status and recognition, and its extensive product range, are not well known in this country in the Aftermarket . The Schaeffler Group has decided to correct this anomaly, and as part of this INA awareness programme it recently sent Daniel Wolff, Business Development Manager, Engine Components, Schaeffler Group Automotive Aftermarket, to visit our shores, to begin a series of initiatives around the INA brand and product range. ABR met with Daniel at the Partinform held at the East Cape Training Centre, Port Elizabeth on the 13th October, to learn more about his mission. Daniel confirmed that INA has a global presence in the original equipment and automotive aftermarket in passenger cars, LCV and commercial vehicles, represented on every continent, and with vehicle manufacturers throughout the world relying on application solutions developed by INA. INA is particularly strong in Europe, whilst also being a significant player in Asia and the Americas. INA’s product range for timing belt drive transmission systems and front end accessory drive systems (FEAD) trains is extensive and includes clutch release bearings (well known in South Africa), hydraulic bucket

46

tappets, finger follower and hydraulic pivot elements, tripod rollers, axial and radial bearings, tripod rollers and much more. Chassis, gearbox and engine transmisson products have grown over the years, and INA is now at the forefront in providing mature solutions for the engine, such as hydraulic and mechanical bucket tappets, rocker arms, finger follower and hydraulic pivot elements as well as water pump bearings and other innovative products. In addition, a large number of timing belt drive components are available: idlers, mechanical and hydraulic belt tensioners or overrunning alternator pulleys, et al. With a market share of 55%, INA is the market leader in supplying timing and front end accessory belt drive components to car manufacturers and the aftermarket, and it it is with this heritage behind them that Schaeffler South Africa is launching a local timing and front end accessory belt tensioner range to create a footprint in South Africa. The initial range will cover 90 part no’s, but will be gradually rolled out to eventually cover the 700 applications for our car parc. Daniel Wolff says that there is room for this product in the aftermarket in South Africa, and it fits into the Schaeffler strategy of finding the right time for INA products. Service and availability will be the focus in a targeted marketing campaign to specialist workshops, the wholesale trade and retail shops, to get the market to accept the INA name and to expand the range in the future, as it takes its rightful place alongside the more established LuK & FAG brands. November

2009

1

by Marcus Haw

Tyres

and Their Contribution to Safety in Motoring

At this time of the year, a number of “events” usually take place which have a direct effect on tyres and road safety.

I

n this issue we would like to take a look at a few of these and warn fleet controllers about the possibilities. Fleet costs can rise rapidly if these factors are ignored, but with a little thought, can easily be contained.The most regular and obvious is the start of our Gauteng summer rains. These bring all the diesel and dirt from the dry winter months to the surface and more damaging to tyres, they quickly result in the development of hundreds of potholes. No roads are exempt from this. Highways, back roads and urban and suburban roads are all affected. Our roads also tend to get busier around this period, possibly due to reps putting in some hard work to reach their targets before year end. Seriously though, as the year gets into it’s final haul there seems to be a rush of business with daily inter city travel on the increase. The breaking up of the roads is therefore made even worse. So

52

we have an increase in daily mileage, on rapidly deteriorating roads, and to add to the adventure of the season the smooth tyres start showing up as the roads get slippery. Fleet controller’s nightmare has arrived! Amazingly this all happens every year. More amazingly people ignore it every year and end up with smooth tyres as the first rains arrive. This was graphically illustrated to us recently when we did an impromptu survey of a small fleet. The fleet was made up of the director’s car, the sales manager and his three rep’s cars and four hardworking bakkies. The average remaining tread depth between all the tyres on all these vehicles was below 4mm. The director’s car was fitted with four month old tyres so you get a picture of how bad the rest were. This example is not as unusual as one would hope. Next time you are at your favourite shopping centre, just take notice of the tyres on the cars

parked around you. While doing this keep in mind that once standing water exceeds or equals the depth of your tread you will ride on top of the water not though it. Remember too that tyres are THE ONLY things between you and the road. Once you are on top of the water all control is lost. After a good downfall it is very common to find patches of water deeper than 5mm almost everywhere. Why do people insist on taking chances? They die on our roads every day. They know these facts, they are not hidden. For the fleet controller, this ignorance, apathy or stupidity of the average driver must be a nightmare. The cost of new tyres is no longer a piddly consideration. But when compared to the cost of panel beating, funerals and training new staff they are a bargain. But to monitor the tyres in a big fleet is a considerable undertaking, and relying on the drivers to be responsible is taking a chance to say the least.

November

2009

The only answer is put controls in place which somehow highlights the “tyre change time” per vehicle. And then discipline the drivers to heed the rules. In the previous issue we spent some time on the fact that more and more vehicle manufacturers are choosing lower and lower profile tyres for their latest offerings. As mentioned, they are needed for the handling precision required by today’s cars. We however need to understand the pitfalls and manage our resources. Low profile tyres do need some thought and management where potholes are involved. Understand that as good as these tyres are, and as strong as they may be, they are never the less very much more rigid, and less flexible than tyres with higher profiles. Damage through pothole impact is often fatal to a tyre, and the instances involving total destruction of the tyre are higher with extremely low profile tyres. We witnessed recently, while driving through a badly potholed area how people react. The car in front of us slowed down to about 40 km/h, as we did, and was weaving in and out avoiding the potholes. The driver was driving an X registration (very new vehicle) executive saloon with accessory rims and ultra low profile tyres. But after about a kilometre of slow driving, his patience ran out and he sped off into the sunset, obviously with no feeling for his expensive car or it’s equipment. More likely, it was a fleet car. But the worry is more the safety aspect. The way he was driving he was going to damage both tyres and rims. There’s just no way they could have withNovember

2009

stood those holes. We certainly wouldn’t have done what he did not even in a 4X4 with huge off-road tyres. This is a problem that both fleet owners and tyre dealers share. When tyres are treated in this way, and they fail, there is just no chance that one will get the truth out of the driver. They all blame the tyre and usually want to change brands. A tyre dealer can tell if the tyre has been abused, and can refuse to claim the tyre. But how does the fleet owner/controller react to these lies and excuses from those he works with. There’s no way he can prove what happened to the tyre, and even if experts are consulted, it remains their word against that of the user. But his costs are going to skyrocket if he can’t take control. It makes a very good case for tyre pressure monitors though. At least if the tyre’s pressures are correct, they have a better chance of resisting pothole damage. As we have previously discussed tyre pressures are so neglected that the chances of anyone considering that they should take extra precautions because of road breakup is highly unlikely. But a buzzer screaming in their ear might actually force some reaction out of them. Whatever method is used, one should be found to maintain the pressures and force the drivers to take more care of their tyres. As already mentioned if the road death toll doesn’t get them thinking, nothing will. And so, all the vehicles in a fleet could have smooth underinflated tyres just when the rains start. As I said, a fleet owner’s headache!

The above rhetoric is given in the hope that all readers, both fleet controllers and private users get to understand the safety concerns involved here. While it tends to be worse during the coming period, these are factors which should be of concern at all times in all areas. It is impossible for the fleet owner to be in total control of all aspects of all his vehicles all of the time, but it is in his interests to at least get control of his tyres. The safety of his staff and all road users depends to a large extent on all those in charge of fleets taking responsibility for the safety aspects of the vehicles in their control. Just the same as we are responsible for the safety aspect of our vehicles, so should all road users be for their vehicles. Especially during the current economic climate, costs are an enormous consideration, although safety should still be a higher consideration. Maybe the purchasing of those tyre gauges mentioned before should be done really quickly now, and maybe serious consideration should be given to pressure warning systems. They may just be the best investment you’ve ever made.

Travel safe, Think Safety – Think Tyre Safety!

www.bridgestone.co.za 53

Diamond

Dialogues

Editorial Partnership Giel Steyn In this series of articles ABR discusses with Giel Steyn of Grandmark International the four significant factors that should be taken into account when purchasing automotive parts - Technology, Quality, Safety and Value for Money. These four characteristics are inter-related, and each cannot stand on their own, and together they become a motorist's best friend. Similarly, diamonds are also judged on four characteristics, known as the “four c's” - carat, clarity, colour and cut; and of course, diamonds are a girl's best friend. Grandmark International, as a distributor of automotive parts, is keenly aware of the need to source only the best in Technology, Quality, Safety and Value for Money, and therefore it is appropriate that this series of articles is titled Diamond Dialogues.

Opening the Doors of Perception to Standards and Controls In 1954 Aldous Huxley explored “the doors of perception” in an iconic book, and a title that he borrowed from William Blake, looking at mankind’s confusion with the real and perceived world, and the inability to see the big picture because of the narrow crevices of observation. From an automotive aftermarket perspective, Aldous Huxley could also have been writing about the SABS, and people’s perception of what actually the SABS is all about. To clarify this and to clear the uncertainty is very important, because it impacts strongly and has an effect on the diamond dialogues of technology, quality, safety, and value for money. Thus, Giel Steyn, who for years carried the mantle of responsibility for policing quality and standards in the retail motor industry, wishes to open the doors of perception on standards and controls.

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o kick off, Giel Steyn would like to compliment the SABS for the role it has played and continues to play – in the past, in the present, and in the future. Standards bodies like the SABS play an essential role and are assets to any country, because as Giel puts it, “no country or organisation without standards has a long term future”, and organisations such as Grandmark International are proud of the quality standards that the SABS maintains, and are proud to be associated with these standards. In addition, the SABS mark, which guarantees a high level of consistent quality, performance, safety and durability, and is conferred by the commercial division of the SABS, is strongly accepted, and once again Grandmark International proudly uses this mark on certain important product categories such as glass and lamps. The question on many people’s minds may still be. “What exactly does the SABS do?” This question may apply to automotive product, it may apply to domestic appliances, and it may apply to many other things that we use in our daily lives. Irrespective of what the product is, the principle remains the same. The SABS originally served twin functions under one Act of Parliament; known as the Standards Act, including the regulation of compulsory specifications. Thus the SABS was an institution created by Parliament, with the

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primary purpose of protecting the consumer, and serving a national need. Initially, both standards and the regulation thereof were managed by the SABS, and this did tend to cause confusion and even the perception of a conflict of interest. This was solved by a new Act for the creation of a National Regulator of Compulsory Standards, independent of the SABS, which is now covered by a revised Standards Act. To take this line of thinking further, the SABS consists of two major entities: a Standards Division, to fulfil its primary role, and a Commercial Division, which runs on a profit motive and charges for its services. The Standards Division creates, establishes and maintains standards, in conjunction with industry and consumers. It has a very broad mandate, covering an incredibly diverse and broad canvas of product and services, ranging from automotive, buildings, paraffin stoves, condoms, even the grading of tourism facilities It has marketing and commercial functions, and as part of these activities it has set itself up as an international standards body with representation on the international ISO committee, and operates various testing facilities which are internationally (SANAS) accredited. The Commercial Division assists industry in meeting these standards, but with a commercial edge. More on this in the next issue of ABR. November

2009

Personal

profile

by Roger McCleery

Q&A INTERVIEW INTERVIEW WITH DARRYL JACOBSON – MD OF BURCHMORE’S When you think of vehicle auctions, only one name comes to mind. Burchmore’s. When you think Burchmore’s, only one man comes to mind there as well. Darryl Jacobson. Despite the World and South Africa being in recession, Darryl and his team have turned Burchmore’s into a company that is the jewel in the crown of the McCarthy Motor Holdings Empire. Q: Are the banks helping you sell these days? A: Lately they seem to be loosening up and we are fortunate that we sell at market prices. Thus there is more equity in the deal. Q: Where did you grow up? A: I am a Yeoville boy, born and bred. I went to King Edward School and played cricket and did some competitive swimming. Q: What did you want to be after school? A: My first choice was hotel management but was persuaded to do accounting by protective parents. Q: After school? Q: You are one of the old style motor men?

have two auctions per week in each of these centres.

A: Yes – my policy is you are in the motor business to sell cars and to give service to your customers. Stick with these two basics and you will be successful.

Q: Burchmore’s are specialists?

Q: How long have you been in the motor business in South Africa? A: For the last 24 years. Q: Where did you start? A: I started off in the motor business with Currie Motors as a Financial Accountant. They and I soon realised this was not for me and I started selling cars in Pretoria and ended up as a Dealer Principal for them. In 1985 I joined the McCarthy Group with City Motors selling Mazdas in the centre of the city. Q: What got you into auctioneering? A: Errol Richardson, who was a heavy at McCarthy’s, offered me a job in 1992 to head up Burchmore’s, which had become part of the McCarthy Motor Holdings Group. Since then it has been my life. We have expanded successfully from Sandton to Durban and Cape Town. Generally we

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A: Yes, we specialise in selling motor vehicles only, unlike some of the others, who are all things to all people. We are a true motor car auction group which has now expanded into selling off the floor which is a unique worldwide concept. In essence a customer can buy off the floor or on auction. Q: You don’t only sell to the Trade? A: No, we sell to both the trade and private sector off the floor and on auction. We auction Bank repossessions and also McCarthy trade-ins to help the McCarthy branches to move stock that is not part of their franchise. Besides that, we are the biggest Dealer for the Chinese Chery brand in South Africa, which is also starting to do well for us and will expand in the future. Q: How do you find the current car market? A: There is a sensitivity to price. People want value for money and this is what we give them. Thus the concept of wholesale to the public.

A: I did my National Service and then obtained a degree at Wits University but the Board exam caught me out. Q: Are your two children ambitious? A: Kelly, my daughter is a BA.LLb and Adam, my son, is studying for his Masters in Actuarial Science. They are far cleverer than me. Q: You have another ten years or so to go before you retire. What would you like to do? A: Consult in the Used Car Industry, which is probably the most important part of the motor industry. Q: Other ambitions? A: Go to the U.K. and become a full-time professional fan of Tottenham Hotspurs Football Club. I have always supported them. Q: Mentors in your life? A: There have been a number. Harold Bromberg of Currie Motors, Ray Nethercott who was my Principal at Burchmore’s and obviously Brand Pretorius, CEO of McCarthy’s.

November

2009

Alert

There are many issues confronting the automotive industry, most of them impacting on all the players across the spectrum. The automotive aftermarket segment of this dynamic and complex industry plays a vital role in the mobility of South Africans, and matters of concern are relevant to the industry as a whole. Automotive Business Review has introduced a monthly column, titled AAMA Alert, to bring to light the pros and cons of specific matters impacting the industry.

A Volatile Rand

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isten to any news bulletin on the radio, or watch the news on TV, and you’re bound to learn what you’ll be paying for an ounce of gold or a barrel of oil on that particular day. All important, because our psyche is inextricably bound to the fortunes of gold, and our economy is inextricably bound to the ups and downs of black gold. You’ll also be apprised of how the stock markets are faring across the globe, because the wealth of nations rides on the whims of speculators like a demented roller coaster. And definitely, you’ll be informed how many Rands you’ll need to part with to purchase one US Dollar, or one Euro, or other important currencies in which we trade, such as the Japanese Yen, the British Pound, or the Zimbabwean Dollar. My apologies, scratch the last one. The reason why we are fed this information, ad nauseam, on the hour, is that the way our currency performs across the globe is important to many people, not least the businesses importing and exporting product, and in the case of the automotive industry many businesses’ very existence depends on it. At the very least, a volatile currency can make planning an absolute nightmare. Many executives must yearn for the good old days, when currencies were pegged as per the Bretton Woods Agreement, and Reserve Bank Governors and Finance Ministers were consigned to ceremonial roles. Investment decisions and procurement policies were based on cast in stone currency values, and not the hit and miss affairs that characterise today’s long term planning meetings. South Africa is particularly vulnerable to the whims and fancies of the arbitrage cowboys, as our currency is one of the highest traded on the planet. The Rand ebbs and flows on the neap tide of Dow Jones and FTSE indices, commodity booms and busts,

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political shenanigans, and even (pathetically in the case of New Zealand) the fortunes of rugby and cricket teams, and the gender of its athletes. The sporting analogy may be taking it a bit too far, but there is no doubt that domestic and international events play a significant role in the performance of our currency, and that the speculators have a field day when big news is about to break, or breaks, or even may never ever break. It is all a crazy St. Vitus dance egged on by the suits in corporate suites and opulent offices in Wall Street, or Throgmorton Street. Great grist to the mills of Fleet Street, and headline grabbing stuff for the financial fourth estate, but gut wrenching poison for those involved in the legitimate business of manufacturing, trading and servicing. These poor slobs are desperately looking for some certainty, so they indulge in hedging to try to inject some sanity in their plans, but even hedging has become something of a slippery slope to negotiate, and many high profile businesses have been gored on the horns of an injudicious gamble, not least being SAA. From AAMA’s perspective, this horror story is the scenario facing the executives responsible for the financial performance of automotive component manufacturers and traders in the South African automotive aftermarket, day in and day out, and particularly for those who are subsidiaries of multinationals, and who are expected to make investment decisions and to deliver a decent return on that investment, not in Rands, but in the particular foreign currency of the head office of the multinational. It all makes for a wild river ride akin to a number six rapid. ABR shall look at this subject in more depth in the December 2009 issue. In the interim, we suggest that you take a look at Tony Twine’s article on page 18. November

2009

Customer

C.A.R.E.

Customer Relationship Management

Theo Calitz has been working in or involved in the motor industry for the last 16 years. A Mechanical Engineer by profession, he is passionate about customer care and his company, T-R-M specialises in automotive CRM for the automotive industry and has been doing it for nine years.

– some grasp the value but most companies seem to miss it altogether or get it wrong! CRM is definitely a concept that has become part of our everyday lives. Some of our encounters are actually quite pleasant (which is what it is supposed to be!) and some of the interactions are downright irritating.

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et me illustrate. One of the first elements of a CRM programme is to build a database about your customer in order to understand them better and meet them at their point of need. Sometimes this is great, like the Amazon.com experience. By tracking my buying patterns they know what type of books interest me. The information they share with me is therefore great and relevant. Although not as sophisticated I also find value from the things Fanatics (the Exclusive Books Loyalty Programme) does. It also seems that the banks (especially the smaller ones like Investec and BOE) seem to get it right with their private clients. Unfortunately it also seems that a lot of companies who do not understand these concepts or do not want to make the proper investment to do it right jump on the bandwagon. Consequently we all get these endless streams of irritating SMS’s, e-mails and phone calls about some product which I do not need (like a cell phone contract – how can that be useful if I am already locked into a 2 year contract!?). Sometimes the experience borders on harassment. Having information about your customer and access

to cheap ways to communicate with them (like e-mail) does not mean that people should be harassed. One always wonders where they get your details… Because of this phenomenon the authorities are finding it necessary to implement legislation in order to protect the public and the pending Consumer Protection Act of 2009 is a pivotal example. This is an extensive piece of Legislation (380 pages long!) and to my knowledge the largest Act ever to be promulgated. There are now more laws governing the rights of the customer rights than laws governing the health profession! This indicates that something is going wrong – very wrong and I somehow feel that the inappropriate application of CRM principles is responsible…. The positive thing here is that the unscrupulous elements are being managed better and that the companies that do understand and apply the elements correctly will not be affected by these laws. The concept of free choice for the customers and opting into being contacted is healthy and right. With the necessary checks and balances in place where customers are only contacted for the right reasons, maybe CRM can take its rightful place again.

www.t-r-m.co.za T 0861 TRM TRM F 086 686 8382

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November

2009

Customer C.A.R.E. Programme – sponsored by Federal-Mogul

MODULE SIX – STEP # ONE : COMMITMENT TO YOUR CUSTOMER We discussed the problem of LIP SERVICE in chapter five, and the failure to live up to promises and commitments. I promised that we shall look at ways of avoiding this, and to explore the first steps to creating a customer care culture in your company.

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said that “Customer Care is a Science, not an Emotion”. Once again, I agree, but with an important rider. Customer Care IS a science, not an emotion, but it MUST be treated with PASSION! That is why I repeat over and over again that CUSTOMER C.A.R.E. is the intellectual and EMOTIONAL understanding that C.A.R.E. means CUSTOMERS ARE REALLY EVERYTHING.

You are right, but so am I. Customer Care policies, of course, must be exposed to the same management scrutiny as all the other activities in the company. Someone once

There is a lot to be said for treating other disciplines with passion, and maybe one day some lateral thinking accountant ( do they exist? ) will come up with some progressive and innovative new GAAP’s. Imagine an accounting tome with the title “Perspiring over the Double Entry”, or “I got spanked on the bottom line”. In the same vein, what do accountants use for contraception? Their personalities! Enough of this bean counter bashing some of my best friends are accountants. We have just indulged in what may seem to be some irrelevant and irreverent banter. However, it is not irrelevant, because a sense of humour is an important attribute for any job, and it is vital for the correct treatment of customers. I quote Victor Borge, “Laughter is the shortest distance between two people”. This, I heartily endorse. So, we have established that passion is OK in customer care, and we’ve also

ou may have noticed that in the previous modules I addressed the shortcomings of companies in the art of customer care, with a strong touch of hyperbole. Such an observation is correct. I have tended to go over the top, and to over-dramatise both the situation and my reaction. Why do I not approach the situation dispassionately, and clinically dissect the facts, with a detailed plan to address the shortcomings in a structured, unemotional and rational manner? As a welltrained manager, I should analyse the situation, define the objectives, assess the resources and logistics, prepare a plan, initiate the recommendations, review the performance, implement corrective action, etc. etc. etc. I agree. You are correct. Customer Care should be treated as a management discipline, and a very important one at that. It should be subjected to the same checks and balances as, for example, production management, or financial management, or personnel management.

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Well, I do keep my promises. established that a sense of humour is not a bad thing. What we are really saying is that you must have fun in the workplace. Enjoy what you are doing, and gain sustenance and growth from it, be enriched by it. You are spending most of your waking life at work, so why waste your life? We’ll come back to this important point in later issues. But back to what I promised, and have been threatening to do for some time - to tell you how to create a customer care culture in your company. It’s easy - and it is only the first part that could be tough for the chief executive. As I’ve said frequently, customer care begins with the chief executive, so we have to start there.

STEP # 1 The first step is for the chief executive to acknowledge that customer care is important to the company, and important to him/her. I don’t want shallow behaviour here, we are talking true blue commitment, and something akin to a born again experience. Therefore, we need a “ public “ ceremony. By public I mean in-house, where every single employee is present. At this ceremony, it is important that the chief executive publicly acknowledges his/her sins of the past, and to promise that from this day forth, the customer will take precedence over anything else.

November

2009

Customer C.A.R.E. Programme – sponsored by Federal-Mogul This is not an extraordinary promise, for in a true customer care culture, all activities in the organisation would always be customer orientated anyway. I recommend the laying of a wreath at the tomb of the unknown customer. An actual physical monument should be erected for this occasion, as a reminder of this very auspicious moment. This is to recognise the fact that many customers have been lost because of past misdeeds, but more importantly, it is to atone for these sins, and to publicly symbolise the commitment to never forget who the most important person is in everyone’s working life - the CUSTOMER! Heavy stuff, but symbolically important. If you believe that this is all a bit rich for your company, then come up with something else, which is more suitable for your culture, or personalities. But a heavy symbolism is necessary, as it carries a certain weight. Don’t pooh pooh what I am saying; remember the over the top funeral for Princess Diana, which was taken extremely seriously by billions of people. Or, closer to home, the public adulation of President Mandela on his 90th birthday. Everyone loves icons, and a bit of pomp and ceremony. Now that you have made a public spectacle of yourself, the process begins where everyone else is subjected to the same treatment. Everyone has to make this commitment to the customer, in front of his/her peers. Remember that at this stage everything is still symbolic and in-house. You are still a long way from telling your customers how wonderful you are. In the next module, we shall continue the saga of the unknown customer.

DISCUSSION POINTS 1. Tell a joke about your profession, e.g. if you’re an engineer, let’s hear one about engineers. 2. Why is it important to be able to laugh at life, and particularly, to be able to laugh at yourself? 3. Do you think that it is demeaning for senior management to “dirty their hands”? 4. You may not like the idea of having a tomb for the unknown customer, or the wreath laying ceremony. What suggestions do you have for a physical reminder, and a ceremony?

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November

2009

65

Q&A

by Roger McCleery

Roger McCleery asks the questions See how many of these 20 Questions you can answer. 1. Name the driver who has led the Formula World Championship all year. 2. Who is his closest competitor? 3. What does CC mean on the latest Volkswagen luxury sedan? 4. What driver has won the South African Off-road Championship for the second time this year? 5. Who makes a motor car called “Linea”? 6. Who is the number 1 driver for Team Timken in the WesBank V8 Supercar Team? 7. What car manufacturer from Europe is going to establish an office in South Africa? 8. Name the two biggest motor retail groups in South Africa. 9. Who is the new Chairman of Renault in South Africa? 10. Who is the new MD of Motorsport South Africa? 11. Who are the likely drivers for Ferrari in 2010? 12. Who is the VP of Sales and Marketing at General Motors in South Africa? 13. What company imports Hankook Tyres from Korea into the country? 14. What make of car finished 1st and 2nd at the Le Mans 24-hour Race in 2009? 15. How many years has Volkswagen officially been in motorsport in South Africa? 16. What company manufactures the Renault Logan? 17. How many years has the Hi-Q Tyre Retail Group been in operation in South Africa? 18. What engine was voted – “Engine of the Year” in 2009? 19. What company has supplied 125 buses to the new Gautrain feeder fleet? 20. How many Mini’s have been produced since BMW took over the brand in 2001?

Answers on page 86

Show

Time

Dunlop/Apollo’s Schramm confirmed as a keynote speaker for Tyrexpo Africa’10 conference A leading figure from the African tyre industry has agreed to speak at next year’s TyrexpoAfrica conference in Johannesburg. Georg Schramm, head of marketing and sales for Apollo Tyres South Africa (Pty) Limited, will be a keynote speaker at the inaugural event next March. lem in South Africa and support a sustainable waste tyre producer industry. Members of the body include Bridgestone, Continental, Dunlop and Goodyear, Michelin, Pirelli, Maxiprest and Trentyre. “We are delighted with the support we’ve received from the industry in putting together the conference programme,” said ECI managing director Paul Farrant. “In Georg Schramm we have a senior figure from one of the country’s major tyre manufacturers, while Dr Human will provide an update on how the industry is responding to the challenge of dealing with the scrap tyre issue that affects all producers and distributors.”

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r Schramm is responsible for all marketing and sales for the Dunlop brand in South Africa as well as Botswana, Namibia, Lesotho and Swaziland. He will provide an expert insight into tyre manufacturing in the African market. He will be joined at the conference by Dr Etienne Human, chief executive officer of SATRP, the South Africa Tyre Recycling Programme. Dr Human will outline the work and remit of the not-for-profit organisation that was established to tackle the waste tyre prob-

November

2009

Further speakers for the one-day conference that will run alongside the exhibition will be announced in the coming months. In other news, South African exhibitor Tubestone will be showing a new range at the exhibition for the first time, following the announcement by managing director Pieter Kruger that the company is set to distribute the well-known Taiwanese brand, Nankang. A full range should be available by the time of the show. ECI has also confirmed that visitors and delegates can now use their online pre-registration service at www.eci-international.com to guarantee fast and hassle-free entry to the show. Exhibition hours have been structured to include late night opening on Friday until 8.00pm, allowing conference delegates and visitors to attend after business hours. The last day of the exhibition will be a Saturday, offering further incentive for those unable to attend during the

working week. By the beginning of September, floor space for Tyrexpo Africa 2010 was more than 65% occupied and on track to meet targets set by the organisers. There is a current balance of 40% national to 60% international companies exhibiting, with strong representation from China, India, south east Asia, the Middle East, Europe and the US. Commenting on recent developments, Paul Farrant, said: “It’s clear from the response we’ve had from exhibitors that tyre businesses are taking a very positive approach to 2010, expecting that the worst of the economic squeeze will have passed. Despite the slow down, Southern Africa remains an attractive place to do business for international buyers and sellers.” Tyrexpo Africa 2010 will provide trade visitors with direct access to tyre suppliers including Stamford, Infinity, BKT, Tandem, Techking, Tubestone and SA Tyre Distributors, while those involved in retreading will be able to do business with the likes of Elgi Rubber Company and Treadsdirect. Garage and workshop equipment will be well represented by suppliers such as Leaderquip, Hofmann Megaplan, Rema Tip Top and Steinbichler Optotechnik, for optical measurement and sensor technology. A full list of exhibitors can be found on the ECI website at www.eci-international.com. The third staging of Tyrexpo Africa will take place at the Sandton Convention Centre, Johannesburg (SCC) on 4, 5 and 6 March 2010.

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Robert

Bosch

ESP® Basics ABR discussed the significance of ESP® (Electronic Stability Programme), in both the technological and safety implications, in its September 2009 issue, and we promised to revisit ESP® and to have a closer look at the technical aspects. The subject is vast, so we shall discuss this revolutionary invention in broad strokes, as whilst ABR tries to be all things to all people, we cannot claim to be a technical journal.

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efore we go any further, some clarification, if you please. ESP® is the most commonly used acronym, but there are different names for the same safety benefit. 80 percent of vehicle manufacturers in Europe use the acronym ESP® for the Electronic Stability Programme. Some carmakers market the ESP® under different names, such as DSC (Dynamic Stability Control), VSA (Vehicle Stability Assist) or VSC (Vehicle Stability Control). The functionality and operation of the ESP®, as well as the gain it provides in driving safety, is the same. The rationale behind these systems is clear. Skidding is one of the main causes of road accidents. International studies show that at least 40 percent of all fatal traffic accidents are caused by skidding. ESP® could prevent up to 80 percent of all skidding accidents. ESP® recognises if skidding is imminent and intervenes at lightning speed. The driver stays in control of the vehicle and does not get into a skid provided that the physical limits are not exceeded. ESP® is always active. A microcomputer monitors the signals from the ESP® sensors and checks 25 times a second, whether the driver's steering input corresponds to the actual direction in which the vehicle is moving. If the vehicle moves in a different direction ESP® detects the critical situation and reacts immediately – independently of the driver. It uses the vehicle's braking system to "steer" the vehicle back on track. With these selective braking interventions ESP® generates the desired counteracting force, so that the car reacts as the driver intends. ESP® not only initiates braking intervention, but can also intervene on the engine side to accelerate the driven wheels. So, within the limits of physics, the car is kept safely on the desired track. ESP® substantially reduces the complexity of the steering process and lessens the demands placed on the driver. ABS, TCS, and ESP® were all introduced to the market by Bosch, and the continuous development of the Electronic Stability Program ESP® by Bosch engineers offers a variety of hardware variants and software functions tailored to the requirements of different types of vehicle i.e. passenger cars or light commercial vehicles. In addition, ESP® is the future enabling technology: By networking the ESP® with other systems in the vehicle Bosch realises a new dimension of driving safety. The Bosch CAPS (Combined Active Passive Safety) networks ESP®, the airbag system as well as driver assistance and vehicle communication systems. The fundamental task of ESP® is to prevent skidding. The possibilities offered by the ESP®, however, go far beyond this. As ESP® can build up braking pressure independently of the brake-pedal position, a series of so-called value-added functions can be realised with ESP®. These provide additional driving safety and allow the driver to experience enhanced driving comfort and driving agility. ABR shall look at this in future issues.

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1. Hydraulic modulator with attached control unit – the modulator executes the commands from the control unit and regulates, via solenoid valves, the pressures in the wheel brakes. The modulator is the hydraulic connection between the master cylinder and the wheel cylinders. It is located in the engine compartment. The control unit takes over the electrical and electronic tasks as well as all control functions of the system. 2. Wheel-speed sensor – the control unit uses the signals from the wheel-speed sensors to compute the speed of the wheels. Two different operating principles are used: passive and active, both measuring the wheel speed in contact-free mode via magnetic fields, with the emphasis on active, identifying both the direction of rotation and standstill of the wheel. 3. Steering-angle sensor – the task of the steering-angle sensor is to measure the position of the steering wheel by determining the steering angle, and thus, combined with the vehicle speed and the desired braking pressure or the position of the accelerator pedal, the driving intention of the driver is calculated (desired state). 4. Yaw-rate and lateral-acceleration sensor – the yaw-rate sensor registers all the movements of the vehicle around its vertical axis. In combination with the integrated lateral-acceleration sensor, the status of the vehicle (actual state) can be determined and compared with the driver’s intention. 5. Communication with engine management – via the data bus, the ESP® control unit is able to communicate with the engine control unit. Thus, the engine torque can be reduced if the driver accelerates too much in certain driving situations. Similarly, it can compensate for excessive slip of the driven wheels provoked by the engine drag torque. November

2009

A series of articles on the versatile FSA 720/740/754 series

The Golden Triangle – KTS, ESI[tronic], and FSA In the October 2009 issue of ABR, South Africa’s premier automotive aftermarket publication, we began a real life examination of how the golden triangle of the KTS Compact Control Unit Diagnostic Tester, the ESI[tronic] Service Information System, and the FSA Engine Management System Analyser; work in sync with a qualified and experienced technician to solve a diagnostic teaser. We continue where we left off.

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o recap briefly: the owner of a five year old BMW 535i (e39) brought the car in, complaining of hard starting and no oomph. Carlo du Plessis, proprietor of Cencar, and a fan of the golden triangle procedure, had progressed to identifying that the problem definitely did not lie on the power supply side, using Bosch equipment and a judgement call based on experience. The detective work continues, and the next step is to look at the trouble codes (anything from one to twenty codes) as identified by the KTS via a physical print-out. This print-out also has another important function, in the realm of customer care, which is to keep the money paying customer in the loop. Once this vital function is completed, the next thing that Carlo does is to clear these trouble codes, and to repeat the procedure. If one or two codes don’t clear this indicate that something is definitely wrong, and this is where the focus now moves. If all codes clear, then Carlo recommends a test drive to build up the codes again, because the codes that are left after the repeat procedure are the most likely culprits, and they are causing all the other error codes. Thus the hunt is on in a focused way. A trained and qualified technician together with the golden triangle makes for an unbeatable combination.

to define the trouble codes around spark plugs, a relative compression test utilising the FSA to get an indication of the mechanically sound status, or go on to an air flow meter to measure air flow, and as a corollary Carlo adds that he defines the lambda sensor as the nose of the modern mechanic, as it smells trouble if there is any trouble around. Interestingly, in this case, the technician’s nose can also play a role, as the odour of fuel is a telltale sign, and with this problem, the whiff of something strange did lead Carlo to the eventual problem (but we will leave this for later). The modern car uses lambda sensors to do the sniffing, as it is these sensors that detect unburnt fuel or lack of fuel residue, which is used for feedback to the ECU, and this clever little computer then regulates fuel and air supply to bring everything back into balance. Incidentally, the perfect ratio for the lambda sensor is 14,7 : 1 for the perfect burn mixture, for reasons which we may go into in the future. Back to the problem. Everything is still checking out okay, so the sleuthing continues, which we shall cover in the next issue of ABR – once again, watch this space.

Step number three for Carlo is to look at the fuel pressure, utilising the FSA and his experience. The usual suspect if the car is jerking will be the spark plugs, whereas intermittent jerking and power loss indicates to Carlo a fuel problem. Now with the golden triangle Carlo has an embarrassment of riches. He can use the KTS November

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Insights

Capricorn Society – an Effective Marketing and Sales Tool in the Automotive Aftermarket Supply and Service Chain South Africa has an increasingly diverse car parc of over eight million vehicles plying its congested roads. Over five million of these vehicles are passenger vehicles, and together with their larger cousins, they are a veritable goldmine for the purveyors of automotive parts and service. The problem is that this goldmine is not just a few shafts in one location. It is spread across the width and breadth of our vast country. Granted, 71% of this car parc is concentrated in just three provinces; Gauteng, the Western Cape and KwaZulu Natal, but this is still a substantial area. And the other 29% spread more thinly over the other six provinces cannot be ignored. Irrespective of where you find these vehicles, the vast majority of which are in daily service, either private or commercial, they do need to be kept on the roads in serviceable condition, and this is where the greater automotive aftermarket supply and service chain plays a vital role. Capricorn Society Limited is an integral part of this supply and service chain.

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he Automotive Aftermarket is huge and diverse, and no one has come up with a definitive number of the participants, but the accompanying box provides a reasonably accurate guideline of who’s who in the aftermarket zoo. Over 15 000 establishments; small, medium and large; who have to be communicated with on a regular basis, which is a daunting task no matter the size of the organisation. Magazines such as Automotive Business Review can play a respectable role in communicating with the automotive aftermarket, but for day to day interaction an army of representatives is required, which is simply not economically feasible. Organisations thus have to make do with varying levels of resources and utilise a range of procedures and actions to get their message across, and to create demand for their products. ABR caught up with Malcolm Perrie and Chris Hillier, CEO and Sales & Marketing Director respectively of Federal-Mogul Aftermarket Southern Africa (Pty) Ltd, at the Midas/NAPA Conference held recently at the Emperors Palace, Gauteng, on the 24th October 2009, to discuss one such support mechanism, the Manufacturer Alliance Partner Programme of Capricorn Society Limited. This programme is a vehicle created by Capricorn to allow manufacturers and suppliers to cost effectively get their message across to the Capricorn members, and very importantly, to provide goods and services. The verdict from both gentlemen was loud and clear – the Capricorn Preferred Supplier Loyalty Programme is a winner. It allows suppliers such as FederalMogul Aftermarket (FMA) to manage their supply chain and to create demand pull right through the chain via incentives such as reward points through the Capricorn Reward Points scheme.

The Automotive Aftermarket • • • • •

4400 garages and fuel stations (most with service workshops) 1800 specialised repairers 1350 new car dealerships 1580 used vehicle outlets 300 component manufacturers

FMA can purchase additional reward points to increase the incentives on specific promotions, which allows them to target specific customer groups, leveraging off the Capricorn data base. There are many benefits to this, says Malcolm Perrie, not least the access to a “phenomenal network of workshops”. Malcolm says that it is a win-win situation, as the product is pulled through the traditional distributor/wholesaler/retail channels, thus benefiting the entire supply chain, and not being a threat to FMA’s distribution partners. In addition, it creates a marketing platform for promotions, branding, and awareness campaigns. And it even uplifts the workshops, as with the extra reward points they can offset against payment towards their account thus freeing up capital in the business to purchase such necessities as tools, uniforms, etc. Malcolm and Chris are in agreement that “it is another string in our bow, and it sustains a great partnership, which is built on trust and respect.”

The peripatetic duo of Malcolm Perrie and Chris Hillier, respectively CEO and Sales & Marketing Director of FederalMogul Aftermarket Southern Africa (Pty) Ltd • • • • • •

150 “other” manufacturers 1700 tyre specialists and retreaders 480 engine reconditioners 170 body builders 2770 parts dealers 180 farm vehicle and equipment suppliers

To join Capricorn Society Limited call Rob Mildenhall on 083 654 2094 or e-mail him at [email protected] or visit their website on www.capricorn.com.au 70

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Marching to Pretoria Mark Ratzer describes himself as the proud owner of Pretoria Diesel Centre cc. Not in an arrogant way, but rather in the confident and self-assured manner befitting someone of his background and training as a Bosch Diesel Technician, which has given him the tools and ability to solve any diesel problem thrown at him.

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retoria Diesel Centre was established in 1968 by Mark Ratzer’s father-in-law as a Bosch Service Centre under the auspices of Diesel-Electric (Transvaal). Diesel-Electric South Africa looked after the interests of the Bosch brand in those days, before becoming a wholly owned subsidiary of Robert Bosch South Africa in 1983. In the 1960’s and 70’s Pretoria Diesel Centre did a lot of work for the mines and the defence force, with the army being only too happy to march to Pretoria whenever specialised diesel repair work was required. Today the clientele is far more diversified, and it was on this basis that Mark decided to join eCAR as a Gauteng pioneering member on 9th September 2004. Mark realised that to secure his future he needed to belong to a strong national network, and when e-CAR was introduced by the Diesel-Electric organisation, based on a successful European format with a few South African tweaks, Mark had no hesitation in joining this “new” concept in South Africa, as he was familiar with the model and had even suggested some ideas suitable for the South African market. He also saw it as a homecoming as an ex Bosch outlet, and he had confidence and trust in the DieselElectric philosophy of building up a network for the good of all parties, i.e. not a one sided deal.

partners are prime, and the support structure is prime. Pretoria Diesel Centre was already a high value business in 2004; now with the e-CAR connection its value has increased substantially.

Mark Ratzer is a pioneer in his field. The first company in Pretoria to offer EDC (Electronic Diesel Control) repairs, the second e-CAR in Gauteng, and the first e-CAR with a Diesel Pump Room Five years later, Mark has no regrets, only plaudits. He has the legendary DieselElectric support, access to Bosch training, and the flexible marketing package available to e-CAR members which allows for local marketing campaigns designed just for Pretoria Diesel Centre, over and above the national marketing initiatives. Mark sees this as an all round package ideally suited for him, as his locality is prime, his

Potgieter Street is one of Pretoria’s busiest streets, which puts Pretoria Diesel Centre in a prime position. With over 40 000 cars streaming past every day, this welcoming e-CAR sign pulls in 70% of PDC’s clients off the street, which is an amazing statistic, and testament to the pulling power of South Africa’s fastest growing workshop concept

To join the fastest growing workshop network in South Africa and to add a new dimension to your business, contact Wilfried Langenbach at 0860 003 227 (0860 00 ECAR)

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MIDAS

moment

Midas NAPA Convention Ends on Emotional Note The 2009 Midas NAPA Convention, held at Emperors Palace, Gauteng, on 23rd/24th October 2009, was despite the straightened economic times, a vibrant affair. Over 400 delegates were unanimous in their praise for the content, the organisation, the entertainment, the presentations, and the all encompassing family feel. Poignancy did creep in during the final stages at the Gala Awards Dinner, when CEO Gordon Odgers “handed over the baton” to Warren Espinoza, incoming COO. Gordon is staying on as Ceo, but passing on the day to day responsibilities to Warren, thus allowing him time and space to play a key strategic and consulting role for the Imperial Group with regard to future opportunities in the automotive aftermarket. The Imperial Group received in early October approval from the Competitions Board to acquire 56% of the Midas Group.

In an emotion charged atmosphere, Gordon Odgers ceremonially and formally hands over the baton to Warren Espinoza. Warren later revealed that he was offered his first job at Midas by Gordon in 1997, over a beer in Port Elizabeth. Who says that beer is not good for you!

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n a rare concession to emotion, Gordon Odgers wiped away a tear as he bid adieu to 12 years at the helm of Midas, which he had joined in 1997 in a tough turnaround role, being seconded from the Dorbyl Group, which in those days held the controlling interest in Midas. Gordon described the bumpy ups and downs during his tenure (which he describes as the best job he has ever had), and acknowledged that Midas was at times on the precipice during the early part of his stewardship, but its inherent strengths saw it through, buttressed by the support of a strong and committed team, and the invaluable guidance of Chairman Chris Ransome. Gordon thanked each executive individually for the role they played in taking Midas to the heights where it is today, and passed on ten principles to his successor, which he has always lived by: 1. The Customer is King, Queen and Prince. 2. If in doubt, go with what the market needs. 3. Respect the Business Model, only alter a pillar if the market has illustratably moved on. 4. Respect the Midas Associates. Tough love encompasses the required philosophy. 5. Value our Partner Suppliers by exceeding their market share aspirations. 6. Don’t bet the farm, too many lives are at stake.

7. Respect the Shareholders, its their money at risk and the Group does not belong to the Management. 8. Participate in Industry initiatives and illustrate responsible market leadership. 9. Leave the environment in a better place than you find it. 10. Finance is only a consequence but requires attention in detail, focus on controls and a diligent forward look to ensure the necessary platform is in place for the Group’s needs. Warren Espinoza, in his acceptance speech, graciously accepted the values which Gordon had instilled in Midas, and committed to their continuance. He acknowledged Gordon as his mentor, and praised him for his long list of achievements, and mentioned that many pundits had over the years underestimated the success that Midas has achieved. He pointed out that Gordon’s stature in the industry was exemplified in his receiving the RMI Person of the Year award in 2007, an award that only comes with immense personal sacrifices. He described Gordon as a Supreme Strategist, a Clear Thinker, and most importantly, a Nice Bloke. Warren thanked Chris Ransome for the confidence shown in him, and he assured the convention delegates that he takes the responsibility bestowed upon him seriously, and committed to maintaining the Midas culture, which facilitates personal growth, and encourages debate from a diverse range of personalities.

For more information on the Midas Napa 2009 Convention, please see insert in this magazine. Also available at www.abrbuzz.co.za under the Aftermarket section

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2009

A series of articles on Launch Technologies SA (Pty) Ltd

Launching Customers for Life

Launch Tech Co was established in Shenzhen, Gaungdong Province, China, in 1992, a scion of a small computer company of the same name that had been manufacturing personal computers since 1987. Launch Tech Co blossomed, riding on the back of the surging Chinese automotive industry, and is today the leading Chinese company in automotive diagnostics and a global supplier to the automotive aftermarket. South Africa has been a beneficiary of this growth.

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aunch Technologies SA (Pty) Ltd. was registered in South Africa in 2000. Launch’s Head Office is based in Jet Park, Johannesburg, Gauteng, and it has a branch in Durban, KwaZulu Natal, and distributors in Cape Town, Western Cape, and Port Elizabeth, Eastern Cape. These distributors, together with a network of sales agents throughout South Africa, have allowed Launch to become a major supplier of automotive aftermarket service equipment to the automotive and allied industries in Southern Africa. The quality range of Launch equipment and products are fully backed-up and serviced by inhouse after-sales service teams.

Launch Technologies is committed to keeping its customers for life, and this philosophy extends to offering trade-ins and upgrades at very good discounts, software upgrades, and hands-on training that focuses on how to use the equipment. Launch also recognises the need to take this training one step further, and one of the many projects it is working on is the proposed establishment of franchised quick repair shops, to facilitate further training on how to take diagnosis and trouble-shooting further, on actual repair techniques.

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Launch is acutely aware of the need for workshops to have access to finance and credit for both capital requirements and operational costs and working capital, so it is a preferred supplier to Capricorn Supplier Limited, a forward looking cooperative that offers a range of innovative business assistance packages.

perspective in that Jackie Li, the CEO, has direct contact, and is in daily contact with Launch Tech Co Ltd’s head office in Shenzhen. Jackie Li spends a lot of time at Launch’s head office, and has his own office at headquarters, and his close relationship with the President allows him to stay abreast of all the latest developments and projects, and gives him favoured status as an international ambassador for Launch. In actual fact, he is merely a phone call away from the President, and this special relationship translates into extra special service for Launch’s S o u t h African customers. Therefore it is no wonder that of the workshops in South Africa using Launch equipment, that 70% of their requirements are met by Launch Technologies.

Launch Technologies SA is also in the relatively unique position from a global

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2009

Howard Keeg follows the action

Algoa Bay Welcomes Partinform In 1799, a fort was built on a hill overlooking the mouth of the Baakens River, as a lookout for enemy ships, and cannon emplacements were in place to repel anyone foolish enough to set foot ashore. A lighthouse was also built on the Donkin Reserve some time later to warn the ancient mariners that they were too close to shore. Not very friendly, but Port Elizabeth is today a far more welcoming place, and Partinform was warmly welcomed at the ETC Training centre at the entrance to the Ibhayi suburb on the evening of 13th October 2009.

ABR Readers Strike Gold ABR’s readers had to wait a long time, but it was worth the wait, particularly for those who struck gold. At the Port Elizabeth Partinform event, four winners were drawn from the hat, to join the eight others at the Forza Racing Ferrari Track Experience on 19th November 2009. These readers have been sending in their entries since early this year, and the four that came out of the hat in Port Elizabeth were:

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he reason for this friendliness was not just a manifestation of the modern Port Elizabethan character, but an acknowledgement that Partinform was the purveyor of important news, and a message that will resonate with anyone in the automotive trade who has pride in their work, pride in their tools, and pride in their commitment to fitting only quality parts. Quality parts equals branded parts, quality parts equals professionalism, quality parts equals safety, quality parts equals value for money, and quality parts equals customer care. This message was on display at every single stand at Partinform and this message was on display in the exciting competition held to find a winner for the Forza Racing Ferrari Track Experience, which will take place on Friday 19th November 2009. The responsibility of each and every participant in the logistics chain of providing these quality branded parts comes down to keeping South Africa’s car parc in pristine condition. The modern motorist is feeling the pinch, and with the car par aging, the onus rests on the automotive aftermarket to provide superior levels of service in all its aspects; from the provision of decent product at realistic prices, to the provision of after sales support in technical and warranty prolongation.

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Denise Darlow, Associated Brake and Clutch, Port Elizabeth

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Keshin Govender, Kapico South Africa, Krugersdorp

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Marius Crous, City Council of Matlosana, Klerksdorp

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Prean Govender, Diesel-Electric Vaal, Vereeniging

In a big coincidence, Andre Rossi of Associated Brake & Clutch, soon to be trading as CBS Port Elizabeth, was present at the draw, and he was quickly on the phone to give an incredulous Denise Darlow the good news. ABR asked Andre how excited Denise would be to drive a Ferrari, and he assured us that Denise is “up for anything”. He also wistfully added that she seemed to have a propensity for winning competitions – but then you have to enter to win, which is what Denise did, folks, so remember this when the competition comes around next year.

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The big winner of the night was Leslie Kretzmann of Triple L Plant Hire, Port Elizabeth. Here Leslie is seen exhaling in surprise as the magic briefcase opens in his favour. Leslie will be joining the other 11 winners at the Forza Racing Ferrari Track Experience on 19th November 2009.

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ropolitan andela Metrm, to introM n so el N fo e p at Partin ators for th show. ct Coordin roject made a pit sto to see what was on nissen je ro P e h T p eu nd oward Th Formula S rm guys, a University lves to the Partinfo AMA Chairman; H form Chairman se in duce them t, Malcolm Perrie, A olin Murphy, Part C h Left to rig r Stroud, NMMU; and Trevo An international flavour was added to the evening with the attendance at the Schaeffler stand of Daniel Wolff, Business Development Manager, Engine Componentry, Schaeffler Group Automotive Aftermarket. Daniel was visiting South Africa in his capacity as an INA specialist.

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The Schaeffler Team, left to right: Cavin Hearne, Product Manger Bearings; Phillip Erasmus, Customer Service Manager; Daniel Wolff, Business Development Manager, Engine Componentry, Schaeffler Group Automotive Aftermarket; Tim Langdon, General Manager Automotive Aftermarket November

2009

Commercial

vehicle

Update

South Africa’s Toughest Warrior By Richard Macaskill

“The name Warrior was established in 1997 for our tough-as-nails bus range.” This is what Paul Richardson, DFM Warrior’s national sales manager, has to say about the brand’s etymology. The DFM comes into the name because of the relationship that Warrior formed with Dongfeng Motors; which is one of the three giant automakers in China according to Richardson.

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he bold statements continued when Mr Lee of DFM Commercial Vehicles in China stated, “In a few years, DFM will be the number one commercial vehicle brand to come out of China.” Bold statements indeed, especially considering the harsh conditions that trucks are forced to deal with in South Africa. However, these statements were made with good reason on this occasion. The occasion was the launch of what DFM Warrior claim to be a notoriously tough truck, the Kinland. The official launch of the vehicle is 20 October 2009, but major clients were invited to Gerotek for a day of information sharing and vehicle testing one week earlier. While the Kinland range is new to South Africa, it has been operational elsewhere since 2006 and is said to have returned nothing but benefits. In fact the Kinland, marking DFM’s foray in to the heavy duty segment, has enjoyed record-setting growth, being pegged as the fastest growing vehicle measured in the same market. The Chinese vehicle hosts a French engine from Renault under its cabin, but this seems to be a multinational partnership that really works. According to Richardson, DFM’s Kinland range went through rigorous testing, going through myriad road and weather conditions ranging from -40° C to 40° C, and did so for over a million km. That said, Gerotek’s testing grounds should have proved no problem, and true to the Kinland form, they didn’t. The rigs were fully laden, some weighing up to 59.3 t. Technically an overload given the legal limit of 56 t, this was not an issue at Gerotek, and also not an issue for the Kinlands. Customers were invited to experience the thrill of a high-speed trip around Gerotek’s oval circuit in the Kinland, and none left unimpressed. The vehicles were put through their paces in front of customers’ eyes, and this only served to further entrench the toughness of DFM Warriors, the Kinland specifically, in their eyes. Testament to the vehicles versatility though, is what Mr Lee said in conclusion at

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the day’s luncheon: “It will be China’s leading heavy duty truck on the basis of its reliability, safety, comfort and economic efficiency.” “Warrior has been assembling, marketing and selling DFM commercial vehicles in South Africa since 2002,” notes Richardson. The

The new DFM Warrior Kinland carries maximum load with no problems. manufacturer itself though, has been in operation since 1969, and it has experienced substantial growth over the past 40 years. Today, DFM’s assets are in excess of 15 billion Yen. However, despite this massive growth, Richardson comments that the most important things to DFM are caring and being both reliable and professional. “The customer is at the centre of DFM’s focus,” he states. This is clearly illustrated through the products that the Chinese manufacturer offers. The DFM Warrior Kinland, while living up to the DFM traditions of quality, safety and efficiency, also proves that it is tough enough to bear the Warrior name.

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2009

green

News

Going slowly, but going somewhere

By Richard Macaskill

All over the world people are going ‘green’. Companies sing praises of their carbon neutrality, corporate social responsibility has moved almost exclusively to preserving our environment and vehicle manufacturers, of course, punt their new, fuel-efficient and environmentally-friendly vehicles.

One of Nissan's new Euro 2-compliant engines in the flesh, sure to keep the environment green as well as keeping your fleet on the street.

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ot to take anything away from the aforementioned categories; many people have invested millions of Dollars in looking after our environment, and they should be commended. But doesn’t it feel like South Africa didn’t get an invitation to the green party? One hears of the Euro 5 and 6 regulations that are coming into play in Europe, yet in South Africa we are only on Euro 2 – and that’s not even all vehicle segments. Heavy duty trucks, for example, were excluded from the Euro 2 compliance made mandatory in 2008. Why, you ask? Why are we so far behind our northern counterparts? The fact of the matter is that South Africa is just not ready yet. Our fuel is not up to scratch - we got an invitation to the party alright, we just didn’t bother to dress up and go. “We have Euro 4 and 5 technology available that we could bring to South Africa tomorrow,” notes Rory Shulz, general manager of corporate planning and marketing for Nissan Diesel. Things are moving forward in South Africa though, and Nissan Diesel is at the tip of the spear. The Cradle of Humankind was an appropriate venue for the manufacturer’s Euro 2 presentation held on 6 October. From 1 January 2010, all vehicles in South Africa must comply with Euro 2 regulations, this time including heavy duty vehicles. Said the guest speaker, Lloyd Christie, senior associate and an environmental specialist at Edward Nathan Sonnenbergs: “Transport has a significant impact on the environment, and this has led to it having to be regulated.” In order to comply with the November

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pending regulations, Nissan Diesel used the opportunity to launch a new series of engines, ones that will be Euro 2 compliant even when coupled with the heaviest of trucks. “We have to listen, first and foremost, to our customers requirements, but we also have a responsibility to bring in products that comply with legislation,” states Shulz. According to Shulz, we are only on Euro 2 because fuels in South Africa are not of a high enough quality yet to power engines that are Euro 4 and 5 compliant; the vehicles would not work. “We want to offer customers a vehicle that will work equally well in Johannesburg and Potchefstroom,” Shulz added, “but because of the fuel quality we can’t do this yet. “We are a developing country, and we don’t have the luxuries that developed countries do.” Shulz further noting that it is important to develop the technology at a reasonable rate. “This technology is affordable; there’s no big price increase.” This is a critical element of developing green technology in South Africa. It is simply not realistic to develop too much too quickly in a country such as our own – the technology will become more expensive and less reliable due to the lack of infrastructure. Christie mentioned that the automotive industry as a whole has a responsibility to work with the South African government to develop our environmental conscience at a reasonable rate, not too slow and not too fast. So it’s true, we may have missed the bus to the green party, but at last, we’re on our way there now.

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LIFE

GOES

ON

Power GM Trio Briefs the Media Saturday, 19th September 2009 was an auspicious and epiphanetic* day for me. I had been invited third hand to a function at GM’s Woodmead offices, and not having the benefit of knowing what exactly the function was all by Austin Gamble about I, unlike Jane Austen, went with very little expectations. As the offices are a mere five km from my home, it was still 50/50 that I was going to attend a mere 30 minutes before the function. Wow, was I glad that I went along. It provided great grist to my Life Goes On series mill, as three men with great responsibilities, one in the past, and two in the future, gave a wide ranging overview of the South African and global automotive industry, and one was left with a sense that GM is in safe hands.

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teven Koch, until recently the GM President of African Operations & GMSA Managing Director, was the voice from the past, and his successor, Edgar Lourencon, together with Nick Reilly, General Motors International Operations President and parent company General Motors VicePresident, were the voices of the future. Steve Koch is still a young man, but because of the recent upheavals at GM, a window of opportunity vis a vis retirement, had opened up for his generation, and it would have been financially imprudent for him not to avail himself of the generous option. It was thus a bitter sweet farewell for him, because as he pointed out sincerely, the last two years had been for him the best time of his life. The times were challenging, but GMSA had come out of the crisis in good shape. Labour relations are as sound as they could be, dealer satisfaction levels at an all time high, the relationship with dealers ditto, positive cash flow, a big investment in the Parts Distribution Centre at Coega showing confidence in the future – and this during trying times! Steve said that whilst there was still a long way to go, the platform has been laid for a bright future. As he put it, “Keep your eyes on GMSA”. From a global perspective, Nick Reilly says that GM is in survival mode with an overwhelming sense of humility. The global downturn and the Chapter 11 humiliation had been instructive for all, and have made him question everything he does. GM’s cost levels in America are down to such an extent that they are in a position to make money at industry levels of 11 million unit sales. Historically, 16 million units have been the norm and they will go back there. Even in 2010 they should be at 12 to 13 million units, so as long as GM can turn around market share, 2010 should see some profits. The big challenge is the company’s

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image, which GM is working assiduously in improving via a provocative marketing campaign. Apart from Europe, GM is doing well in Asia, South America and other emerging markets. South Africa is looking good, and from a micro perspective Nick says that GM is working very hard with the suppliers, as localisation is very important. In a final aside, Nick says that the number one priority for GM in America is to pay back the government loans by the end of 2010 and to go public again, and in so doing to thank those who have made sacrifices and to pay them back by surviving and staying humble. Edgar Lourencon hopes to bring some Brazilian flair to South Africa (maybe he can assist with Bafana Bafana), and his vision is to see South Africa emulate Chile, where GM has been top dog for 27 years. Edgar’s primary experience has been in South America, and he says that his experience of the Argentinean that should help him, as it is of a similar size and similar conditions. Edgar is really looking forward to his time in South Africa, and acknowledges that he is having to fill some big shoes and has a great responsibility in keeping GMSA on the right track. This responsibility he relishes and he also regards himself as a lucky man, being at the helm during the Soccer World Cup. His last three assignments have been Chile, Argentina and South Africa, and as he say, “three beautiful countries, and all making great wine!” More on this wide ranging discussion in the December issue of ABR. *a nod to Words in action November

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Corporate

Conscience

Midas Scores Way Above Par By Richard Macaskill

Yes, you did read that correctly. Although it was a golf day, birdies and pars were not the order of the day, because Midas was way above par at its annual charity golf day held at the Royal Johannesburg and Kensington Golf Club on 15 October 2009. Midas’ golf day alone raised over R100 000 for charity, including three schools and hospices nationwide. Donations on other days put the total closer to a quarter of a million Rand.

The golf was good...

but the fund raiser was definitely the highlight of the day.

he schools are the Dias Farm School in Port Elizabeth, the Phaphamani Primary School in Durban and the Madibatlou Middle School in Olifantsfontein, plus of course, the hospices. So while these entities benefit from the charity, these are passed on to the less fortunate people that fall under their varying umbrellas, meaning that hundreds of people will reap the benefits of Midas’ 2009 charity golf day.

Facility improvements, bursary programmes and feeding schemes are just some of the ways through which Midas further aids its charities.

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“The sole reason for this golf day is to raise funds for charity,” said Warren Espinoza, COO of the Midas Group. “This is Midas’ primary charity event of the year.” With a focus purely on raising money, it is no surprise that Midas’ fourth annual charity golf day was such a vast success. Importantly though, Midas does not just raise the money and give it away. “It is more than just the money,” stated Espinoza, “Our focus is to uplift the community.” This is done through performing community projects and improving not only the schools and hospices that Midas helps, but improving the lives of those involved as well.

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The focus of the evening was more about fun than formality, and this was a hugely successful formula. From auctioning off insulting t-shirts for more than original Bulls rugby jerseys to a golf trip to the United Kingdom being sold for a phenomenal R60 000, Midas managed to make people not only feel good about donating to charity, but to have one hell of a good time while doing it. Although no-one won the Harley Davidson on offer for a hole in one at the fifth, everyone truly enjoyed themselves. Months of hard work paid off, and no-one will be happier than those whose lives are positively affected by Midas and its charity. R100 000 later, it seems Midas has its slogan right then – because there really is more to Midas.

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Corporate

Conscience

The Tree Bears Fruit For close on a year, ABR has been banging on about the Herculean efforts of Patrick Latouche, CEO of Sparepro, in bringing change to the culture of the organisation. There has been a hidden agenda in these articles, which is to prove that employee morale and motivation, together with committed customer care, charged with energy and focus, and all based on sound business principles and a sincere corporate conscience spiced with community and social initiatives , can have remarkable results.

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ll of the ideas and projects initiated by Patrick Latouche are closely aligned with the principles that ABR espouses to, so there has been a significant amount of champing at the bit to reveal the results of these efforts, whilst also appreciating that the changing of a culture takes time and persistence. The good news is that Patrick has finally relented, and during our October interview he disclosed that since June 2009, the business has consistently performed above targets, culminating in the month of September 2009 which was a record month for Sparepro, in sales, margins, and bottom line. Working as individuals, and more importantly working as a team in a friendly but competitive environment, every single member of the 14 person sales team achieved their targets, whilst seven broke their all time sales records, resulting in Sparepro’s sensational September results. The truly heartening aspect is that this was done without ridiculous prices, which may have been the modus operandi of the past in business generally, and is testament to the growing sophistication of the automotive aftermarket traders and customers, who are becoming increasingly savvy, and who no longer get excited about unrealistically low prices – conversely, the savvy trader gets suspicious, and rightly so, as there is no such thing as a free lunch. The perception of

value is changing for the better, and Sparepro’s customers no longer look at pricing as the be all and end all. Customer service, customer relationships, and customer loyalty is gaining traction. The customer is now starting to equate delivery performance; warranty support; supplier commitment, empathy and reliability with value for money. The customer is also starting to support the set of overall values that the business stands for. Patrick says that this has been a long term process. He compares it metaphorically with the planting of a tree. Once you plant a tree, you need to water it, fertilise it, to nurture it, even to take a leaf from Prince Charles’ book, and talk to it. This energy and nourishment will eventually bear fruit, and Sparepro’s September performance is living proof. Patrick’s surname is indeed appropriate, as his light touch in making a point rather than a heavy handed approach, has produced the results with appreciative acknowledgement. He says that the days of aggressively attacking the competition and starting price wars are long over, as these tactics have short term effects with detrimental long term consequences. The light touch involves finding the right balance between market share and acceptable returns on investment, based on solid strategies and sound business principles. This is the foundation to a successful business, capped with the

Answers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

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Jensen Button Rubens Barricello Comfort Coupe Duncan Vos Fiat Hennie Groenewald Citroën McCarthys and Imperial Mannie da Canha Francois Pretorius

respect of your employees, your customers and your competitors, and the key to it all is dignity.

This avocado tree was nurtured and nourished, and these efforts bore fruit.

This avocado tree was left to fend for itself, and whilst it has survived, it has yet to bear fruit.

From page 66 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Alonso and Massa Malcolm Gould Tiger Wheel and Tyre Peugeot 25 Mahindra in India Ten years Volkswagen 118 kW 1.4 TSi Engine Mercedes Benz 1.5 million.

November

2009

SABAT HOSTS THE 7th ANNUAL POWER WHEELCHAIR RACE AT KYALAMI DURING THE VODACOM POWER TOUR ON THE 17th OCTOBER 2009 SABAT hosted 30 quadriplegics from the QuadPara Association of South Africa (QASA) for the Annual Power Wheelchair race around one kilometre of the Kyalami circuit on Saturday 17th October 2009.

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his was the seventh year the event, the only one of its kind in the world, was held. 30 quadriplegics lined up at the bottom of Mineshaft at one hour after midday and raced to the finish line at the end of the main straight at Kyalami to see who would be crowned "The fastest Quad". The event is open to both men and women, who all use SABAT batteries to power their appropriately prepared wheelchairs. SABAT have an ongoing relationship with QASA, sponsoring all members who use power wheelchairs with a pair of batteries per annum to keep them moving and mobile. "This project enables quadriplegics the opportunity to remain mobile through the use of SABAT batteries and thus save hundreds of Rands. The race event gives those of us who use power wheelchairs an opportunity to re-discover the joy of competitiveness and feel the adrenalin, often lost through disability" says Ari Seirlis, National Director of QASA. 30 000 Kyalami spectators were on hand to cheer the participants on race day, while top speeds of 16 km/ph were achieved by the front runners. Power Wheelchairs cost between R20 000 and R100 000 and these essential mobility aids allow quadriplegics the freedom and independent movement they deserve. QASA encourages quadriplegics and paraplegics to participate in sport and hobby activities and the SABAT POWER WHEELCHAIR RACE is a perfect platform for the users of power wheelchairs to demonstrate their toggle driving skills and to enjoy the thrill of some wind in the hair competition. November

2009

Errol Innes presents Arie Seirlis of QASA with a commemorative picture.

Quads hit the track

Corne Strydom of Powertech Batteries chats to Ari Seirlis of QASA.

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Show

Time

First HeavyWeight Expo attracting great interest from industry Great interest has been shown by potential exhibitors in the country’s first national exhibition dedicated to the latest products, services and concepts in the heavy vehicle industry, which will be staged at the Tshwane Events Centre in Soutter Street, Pretoria West from March 23 to 26 next year (2010). “The Tshwane Events Centre is proud to host this first ever confex dedicated to the heavy equipment sector in South Africa. We have identified this exhibition-cum-conference as a need within the industry which was confirmed by major role players,” says Wim du Toit, CEO of TSHWABAC, organisers of the event. Tshwane Events Centre and HeavyWeight Expo Director, Fanie Fourie, is excited about the enthusiastic response received since the HeavyWeight Expo was announced earlier in September. “We are expecting around 80 representatives of the heavy vehicle, bus, construction plant and equipment, special and agricultural vehicle sectors to attend the official launch function of the inaugural HeavyWeight Expo,” said Fourie. “All the major players have expressed an interest and once we have fully briefed them on what the show will offer them, we will be getting into the hard marketing of the exhibition. The excellent response we have received so far reinforces our belief that it is time for a show of this nature, that will showcase the heavy vehicle industry, which is a key sector of the transport business,” Fourie added. Three of the biggest exhibition halls at the old Pretoria Showgrounds have been made available to exhibitors. Halls C, J and L will provide around 17 000 square metres of exhibition floor space and in addition there will be a further 30 000 square metres of outside space. While the HeavyWeight Expo, which is endorsed by the RMI, will provide a unique platform for the leading manufacturers, suppliers and service providers to display their products and do business with existing and new customers, industry related business conferences and workshops will be organised by Omega Investment Research. Exhibitors will also have access to the services of Total Relationship

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Management (TRM), specialists in customer relationship management in the automotive arena. TRM provides a range of services aimed at enhancing customer care and customer satisfaction strategies and boosting customer relationship initiatives. Jeff Osborne, CEO of the RMI, comments: “The RMI, which is in its 101st year of existence, is pleased to offer the HeavyWeight Expo its full support. We enjoy a world class automotive industry in South Africa, as was evidenced by last year’s Johannesburg International Motor Show. We believe that the creation of an additional show dedicated to showcasing the heavy vehicle industry is entirely appropriate and we urge all players in the industry to give HeavyWeight Expo 2010 their full support. It is being organised by enthusiastic professionals who enjoy an impeccable track record and, I am sure, it will be a great success.”

November

2009

Show

The fifth annual Workshop and Aftermarket Technology Show (WATS) will run in tandem with the HeavyWeight Expo for two of the four days. The 120 or so WATS exhibitors will occupy one of the three exhibition halls. The 6th WATS Expo – Workshop Aftermarket & Technology Show has been extended to two days (24-25th March 2010) thus bringing an exciting variety of Manufacturers, Distributors and Agents of Heavy Duty Vehicles, Plant, Agricultural Equipment, Automotive Parts, Garage Equipment, Tools, existing & newly released Diagnostic Scanning Equipment with live demonstrations, Parts Suppliers, Aircon suppliers, IT Accounting/Workshop Control & Job Tracking Software. For the very first time, Mechanical, Auto Electrical & various other Automotive Training Centres together with RMI, SDF’s ( Skills Development Facilitators ) & MerSETA will be on hand, to advise you on all your training & up skilling needs. Training is Crucial in ensuring that your business becomes a success story to be proud of. “The timing of the Expo’s is perfect,” adds Osborne, pointing to the potential upswing in the economy & the forthcoming 2010 FIFA World Cup Soccer as big incentives for visitors & exhibitors alike. “The RMI feels that the combination of these two shows makes practical sense and we’re looking forward to what they have to offer.

Time

ehind b m a e T t yweigh The Heav d WATS n a o p x E t weigh the Heavy

“We need to train up our new and existing technicians to comprehend and master the new technologies entering our markets on a daily basis in the form of sophisticated new products, technologies and vehicles,” says Johann de Bruyne, organiser of the WATS Show & Managing Director of Kigima Auto Electrical Training Centre. In addition to the shows, WATS will host a number of mini 30min workshops between 6 & 9pm on 24th & 25th March and the Heavyweight Expo will host a series of 4, half day workshops & conferences over 23-26th March addressing a number of vital issues pertinent to stakeholders in the automotive aftermarket and heavy commercial vehicle and machinery sector. Stands for exhibitors @ the WATS Expo Hall “L” - total cost for the 2days, R4,950.00 + Vat for a basic 3x3m stand. Space for exhibitors @ Heavyweight Expo starts at R140 per sq meter (open flooring). November

2009

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Intelli-Driving

INFORMATION ON AARTO IMPLEMENTATION

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here has been so much confusion regarding the implementation of AARTO and misrepresentation by some, albeit well meaning individuals. The following we hope will serve to clarify matters as it emanates from a reputable and well known expert on these matters. Please feel free to call us for information on the Advanced Driver AARTO programme – a must for any organisation wanting to protect and enhance their drivers’ (and sales personnel) effectiveness. AARTO is an Act of Parliament. It must be implemented by way of a proclamation signed by the President. If AARTO is implemented in a new area, it will also be done by way of a proclamation. The only proclamations that have been published thus far have implemented the Act in the municipal areas of Johannesburg and Tshwane. The CEO of the RTMC, Mr Rakgoale, has issued an extensive press release addressing all the issues that news paper reports raised over the last few weeks. You can have a look at the information about the RTMC on their website www.rtmc.co.za. AARTO information is available on www.aarto.co.za. The Points Demerit System cannot be implemented without a notice in the Government Gazette implementing regulation 24 and schedule 3, column 7 of the AARTO Regulations. Information is published weekly in the Government Gazettes to inform when there is a notice in the Government Gazette concerning the implementation of AARTO in further areas. When you receive a notice for a traffic infringement and have to sign for it at the Post Office, you have to deal with the ticket in terms of the AARTO system. When you receive it by standard mail it is issued in terms of the Criminal Procedure system. Note: Old tickets in Johannesburg and Tshwane were also issued in terms of the criminal system. If a notice is served to you in person and it states AARTO 01 – it is an AARTO fine, if it states section 56 – it is a criminal offence. News paper reports cannot stop the AARTO Act from being functional in a specific area. A person must act on the notices to avoid further notices being sent to him or her.

Commuter Stress and Road Rage So-called "road rage" runs the gamut from cranky drivers laying on the hooter to full-on assault with a deadly weapon. And yet "road rage" is a relatively new term. Could the use of it be reckless in itself? By some accounts, up to 90% of us will encounter road rage, either as a victim or as a witness, at one time or another in any given year. But overseas law enforcement officials and experts in public safety emphasise the importance of making a distinction between aggressive driving and road rage. What is the difference between road rage and aggressive driving? There is no scientific definition for road rage, but many road safety experts agree that it is a criminal matter, not a threat to road safety. It occurs when a traffic incident escalates, resulting in a far more serious situation, such as if someone overreacts to an event and retaliates with violence... So, the term should be used to classify intentional acts of violence and assault that happen in the context of driving. In other words, assault is assault no matter where it takes place. Aggressive

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driving, on the other hand, is a whole cluster of bad or inconsiderate driving by Eugene Herbert behaviours. These are the more commonplace, but negligent, driving habits, including rude gestures, blowing the hooter, speeding, tailgating, failing to indicate, driving on the shoulder (emergency lane) to pass other cars, and unsafe lane changes. Of course, any of these behaviours could also result in a situation where retaliation turns violent. But more often, no physical harm is done. Often it is a case of stressed, frustrated drivers taking a mistake too personally and reacting without thought to consequence. Could that be called "rage"? Perhaps, but calling it thus could fuel fears and undermine the seriousness of those confrontations that turn into assault. What are the characteristics of a likely "road-rager"? Studies abroad show that, on a statistical level, men under 30 are most often the offenders and the victims of road rage. But anyone could be struck by road rage. The difference is that most people are able to suppress urges to react. What can I do about my own road anger or frustrations? Don't get into the driver's seat angry. "High-anger" drivers share a habit of taking their everyday aggressions into the car. Avoid this recipe for rage by planning ahead. Give yourself plenty of time to get where you're going. Steer clear of high-traffic routes, or pull off the road for a break when you feel angry or overwhelmed. Notice if certain conditions - rainy or overcast days, construction obstacles - seem to trigger your temper and avoid them when you can. Don’t judge other drivers. Unless a fellow driver puts you in imminent danger, why would you expend any mental effort condemning their driving skills? Does it really matter if that guy forgot to indicate his turn or that some lady slows down to get a closer look at a street sign? Give the benefit of the doubt; it's not always an inconsiderate driver, just a momentarily distracted one. And remember that we all make mistakes now and then. Remember, it's usually nothing personal. People prone to road rage are often more sensitive to perceived attacks on their self-esteem. They may see bad driving as disrespectful or as a personal insult. But keep in mind that your fellow drivers have their own problems, their own worries, and their own agendas that have nothing to do with you. Seek treatment. Be proactive about handling your anger and frustration. Training in relaxation and coping skills have helped some people deal with anger and impulse control. You might also try a course in driving instruction to pick up some tips and tricks for dealing with tense moments on the road. Set a good example for children. If you have children in the car with you, consider everything you do a possible example of how to act behind the wheel. This includes your negative reactions to other drivers and the comments and gestures you make. Wouldn't you prefer a future of alert yet level-headed drivers on the highways to one filled with irate cranks flipping each other the finger? November

2009

From

the

Cockpit

Highveld Storm Washes the Blues Away It had been, in the words of Hennie Groenewald, “a long year, but you couldn’t have wished for a better finish to the season”. An exciting finish was provided for by persistent rain at Kyalami on the 17th October 2009, when the final two races of the season were held, and the rain blessed Team Timken’s Talent and Team Timken’s Tenacity in the WesBank South African V8 Supercar Championship.

Hennie Groenewald and Richard Pinard – a racing duo of note

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oing into the Kyalami meet, Marc Auby in his ELT International Jaguar was the favourite to take the championship with a five point cushion, and with the knowledge that he had led the championship from the start of the year. Hennie Groenewald had other ideas, and was hoping to cap an incredible comeback in his Team Timken Holden, after a year characterised by bad luck and administrative snafus. The fairy tale ending was set up at Killarney on 26th September when Hennie made up 24 points on Marc, whose luck had turned and who only managed to garner one point in two disappointing races. Hennie, who was looking dead and buried before Killarney, suddenly had the momentum with him, and he could literally smell his fourth successive WesBank V8 Supercar Championship after holding on to win the first heat in wet conditions, with Marc Auby second and brother Brandon third.

The championship all came down to the second heat, from an inverted grid, and Groenewald, sitting in ninth position, had the task of passing the Auby’s who were at sixth, seventh and eighth respectively. Hennie realised that he was to receive no favours, so he decided to take the bull by the horns, despite atrocious racing conditions. Hennie told ABR after the race that the conditions actually favoured him, as his daring driving in treacherous conditions caught everyone napping. Cars were aquaplaning which required a cautious approach, and Hennie barrelled past two of the Auby’s on the outside of turn one, then nipped past the third Auby on the inside before turn two. His audacious approach then took him past the rest of the field, and after an astonishing half lap of brilliant driving; he was in first place by turn six!!! Not that the other guys were not trying, it was just an irresistible whirlwind and orange blur that had gone past them. In front of all this action, Hennie’s team mate Richard Pinard had also shown his racing prowess by going to the front, but when he spied the orange Holden in his rear view mirror he gave away the racing line to allow Hennie through. By so doing, Richard showed his value as a team man, and this allowed Hennie to build up a sizeable cushion, which allowed him to hang on despite tyre problems, taking the checkered flag to cap an amazing season. Danie Coetser, Managing Director of Timken South Africa, had showed his faith in his racing team by inviting 90 guests to the Timken boma, and they were there to celebrate with Danie and his team. Hennie revealed that their prayers on the day were answered, and he and Richard Pinard reiterated their thanks to a support team who never wavered in their faith, and praised Timken for their generous sponsorship, and their commitment to motorsport in South Africa, under trying conditions.

Hennie Groenewald leads the way through a corner

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November

2009

Fast

Wheels

ANOTHER CLOSE FINISH TO THE FORMULA 1 SEASON COMING UP

by Roger McCleery

Some people say they gave up watching Formula 1 Grand Prix racing on TV during the Schumacher era due to the predictability of the results and lack of passing. A dearth of passing remains this year despite a committee being formed to try and correct this, except in the pits. Seeing the smart work by the various teams of mechanics in the pits getting their men all fuelled and equipped with new rubber in a few seconds adds a bit of interest. It is not really exciting.

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eal passing, however, does take place on the real Grand Prix circuits that don’t feature tight 90º corners and chicanes. Lately the Grand Prix races on classics like the Belgian circuit at Spa or in Italy at Monza, or the Japanese Grand Prix at Suzuka are the best. The old Kyalami track would have done the same. The Brazilian Grand Prix in Sao Paolo always brings high speed racing and lots of drama. This could be the scene of another world championship decider with its fast straights, high speed corners and ups and downs. Circuits like Valencia which is a dressed up harbour and the Singapore Grand Prix with street lighting, does nothing for what is supposed to be the pinnacle of motor sport. Grand Prix racing should test the drivers and cars to the limit. Let’s hope the brand new track at Abu Dhabi which will conclude the 2009 season is not another Middle Eastern track like Dubai or Qatar (for the bikes). These are just flat featureless tracks, have stop-start racing and almost no passing for the small audience they attract to their stands. Predictability? Not this year for sure. Brawn GP cars were on their way to win everything when suddenly the rubber they were using wouldn’t warm up sufficiently whilst all the other teams without this problem made whoopee and caught up. It can’t only have been the diffuser box behind or below the Brawn cars that did it. It seemed to come right at Monza when Barricello and Button came home in 1st and 2nd spots but went away again at Suzuka where they looked average. It does, however, add to all the excitement and blows predictions out of the window for the last two rounds of the championship. These are going to be worth watching. We hope all this close competition will happen without the intervention of the race stewards. It seems the instructions come from the Race Director to penalise competitors during a GP. This is wrong. They can almost manipulate the results of any race. If there is an infringement, give the penalty at the end when both sides of the story have been heard. For instance, Rosberg lying 2nd in Singapore went over a white line coming out the pits. He gained no advantage but was virtually banished to being a tail-ender and out of contention. They must have been spitting blood in the Williams pit. What about all the people who had come to see Rosberg and Williams racing? Stupid rules like this that can wreck

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the entertainment value of Grand Prix racing, which is badly needed. It is not helped by the English commentators always justifying any little mistake at high speed with “rules are rules”. The entertainment value for the public, who pay huge money, is often lost, thanks to this anonymous bunch of officials. Have you noticed how few competitors have been caught speeding in the pits lately after it was mentioned to the FIA that their timing equipment could be inaccurate. The timing was used to enforce drive-through penalties which also wrecked the races. The one exception was Webber who drove through the pits and went on to win the German Grand Prix. The normal musical chairs have started for the driver line-up for 2010. Alonso is driving for Ferrari with Massa, if he is fully recovered from his injuries. Kimi Raikkonen could be joining Toyota. Robert Kubica is also penned in for this team, despite rumours of the withdrawal of Toyota from the sport. Kubica could also be going to Renault. Talk is that Raikkonen will replace fellow-Finn Kovalainen at McLaren. Other drivers’ seats opportunities haven’t been mentioned yet but there are quite a few vacant seats with lots of talent to fill them. Renault desperately needs to win again, although their engines do well in the Red Bull cars. The Renault chassis seems to be a dog despite the brilliance of Alonso. They have lost their manager, Briatore, who has departed the scene, although Bernie Ecclestone says that decision was pretty harsh. Watch developments on that one. Prost, who has replaced Briatore at Renault, in my book might be French and a four-time Formula 1 World Champion, but his previous attitude and experience running his own team came to nought. A great team like Renault will go the same way. Nobody seems to want to drive for them. Interesting months lie ahead. The plea to the FIA is to give us racing with lots of possibilities of cars passing each other. Let’s have less of your behind-the-scenes politics in offices and at race tracks. This appears to be a pointless fight over power and greed. We have supported and watched your Formula 1 GP Racing from the start, so let’s have it back as the pinnacle of motorsport as it should be. November

2009

The

Last

Writes

by Baron Claude Borlz

A selection of light hearted humour from various sources … This one I got from the SAAW Times, issued during the SAAW in PE early in October. Question: What is the truest definition of Globalisation? Answer: Princess Diana's death.

• • •

Question: How come? Answer: An English princess with an Egyptian boyfriend crashes in a French tunnel, driving a German car with a Dutch engine, driven by a Belgian who was drunk on Scottish whisky, (check the bottle before you change the spelling) followed closely by Italian Paparazzi, on Japanese motorcycles; treated by an American doctor, using Brazilian medicines. This is sent to you by an African, using Bill Gates’ - (an American) technology, and you're probably reading this on your computer, that use Taiwanese chips, and a Korean monitor, assembled by Bangladeshi workers in a Singapore plant, transported by Indian lorry-drivers, hijacked by Indonesians, unloaded by Pakistani men, and trucked to you by Mexicans ...and now being read by a person sitting in ???? who should be working instead of wasting time like this! That, my friends, is Globalisation. Ed’s note: and Diana’s son was chummy with a Zimbabwean girl who studied in SA. Some phonetically challenging teasers for those with nothing better to do: • Police were called to a day care where a three-year-old was resisting a rest. • Did you hear about the guy whose whole left side was cut off? He's all right now. • The roundest knight at King Arthur's round table was Sir Cumference. • The butcher backed up into the meat grinder and got a little behind in his work. • To write with a broken pencil is pointless. • When fish are in schools they sometimes take debate. • The short fortune teller who escaped from prison was a small medium at large. • A thief who stole a calendar got twelve months. • A thief fell into wet cement. He became a hardened criminal. • Thieves who steal corn from a garden could be charged with stalking. • We'll never run out of math teachers because they always multiply. • When the smog lifts in Los Angeles, U.C.L.A. • The math professor went crazy with the blackboard. He did a number on it. November

2009

• • • • • • • • • • • • • • • • • • • • • • • •

• • • •

The geology professor discovered that her theory of earthquakes was on shaky ground. The dead batteries were given out free of charge. If you take a laptop computer for a run you could jog your memory. A dentist and a chiropodist fought tooth and nail. A bicycle can't stand alone; it is two tired. A will is a dead giveaway. Time flies like an arrow; fruit flies like a banana. A backward poet writes inverse. In a democracy it's your vote that counts; in feudalism, it's your Count that votes. A chicken crossing the road: poultry in motion. If you don't pay your exorcist you can get repossessed. With her marriage she got a new name and a dress. Show me a piano falling down a mineshaft and I'll show you A-flat miner. When a clock is hungry it goes back four seconds. The guy who fell onto an upholstery machine is now fully recovered. A grenade fell onto a kitchen floor in France, resulted in Linoleum Blownapart. You are stuck with your debt if you can't budge it. Local Area Network in Australia: The LAN down under. He broke into song because he couldn't find the key. A calendar's days are numbered. A lot of money is tainted: 'Taint yours, and 'taint mine. A boiled egg is hard to beat. He had a photographic memory which was never developed. A plateau is a high form of flattery. Those who get too big for their britches will be exposed in the end. When you've seen one shopping centre you've seen a mall. If you jump off a Paris bridge, you are in Seine. Ed’s note: and those who don’t believe anything and fall into a Cairo River, are in denial. When she saw her first strands of gray hair, she thought she'd dye. Bakers trade bread recipes on a knead to know basis. Santa's helpers are subordinate clauses. Acupuncture: a jab well done.

Dear beloved Boss! Please take the attached picture and frame it in your office so you will know why I’m always late at work. I WILL BE LATE AGAIN ON MONDAY. (I am in the white car?) Regards For Everyone Who Has Ever Missed A Deadline...

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