The South African automotive aftermarket is facing a period of notable transition, shaped by technological shifts, changing buyer habits and the arrival of new players challenging long-standing business approaches. This was the central discussion point at the Automechanika Johannesburg CEO Breakfast, hosted by Messe Frankfurt South Africa and Nedbank at the Kyalami Grand Prix Circuit, held alongside the 9th Festival of Motoring.
Opening the dialogue, programme director Andile Africa, CEO of the Automotive Industry Development Centre (AIDC), observed the combined effect of new technologies, evolving consumer patterns and fresh market entrants is altering the operational landscape for aftermarket businesses.
Michael Dehn, Managing Director of Messe Frankfurt South Africa, set the scene for attendees by drawing a clear link between the two events. “The Festival of Motoring reflects the energy of the market and Automechanika provides the structural support. This is where those elements converge.”
Breakfast speakers explored several factors currently influencing the sector, including vehicle affordability, local parts production, the role of artificial intelligence, and the broader economic environment.
Affordability, Local Content, and Customer Shifts
Brandon Cohen, National Chairperson of the National Automobile Dealers Association (NADA), said purchase price is only one part of the affordability equation. Buyers are now weighing fuel economy, insurance premiums, tracking system requirements, finance terms, maintenance schedules, reliability records, parts availability and dealer networks before making a decision.
He pointed out longer finance periods and extended ownership cycles are contributing to an ageing vehicle parc in South Africa, which in turn generates work for workshops and parts suppliers but also adds pressure to household finances.
“The consumer journey tends to start with total cost of ownership,” Cohen said. He added dealers need to rethink their business models, manage overheads carefully and compete on overall value over the vehicle’s lifetime rather than just the sticker price.
Duane Newman, Partner at EY, spoke about opportunities to increase local manufacturing of aftermarket components. He identified lead-acid batteries, automotive glass and brake pads as areas with strong potential for domestic production, based on current demand, replacement cycles and existing manufacturing capability.
However, he cautioned cheaper imports, limited production scale, investment hurdles, input costs and inconsistent quality enforcement continue to hold local producers back. Newman called for clearer certification standards, improved recycling and feedstock systems, better export access, coordinated industry demand and targeted incentives to support suppliers focusing on the independent aftermarket.
“A coordinated push involving industry, government and institutional partners will be necessary to unlock the full value of localisation,” he said.
Technology, Resilience, and the Path Forward
Werner Stucky, CEO of Stubber, encouraged automotive leaders to view AI as an operational tool rather than a purely IT-driven initiative. He described the potential for autonomous digital systems to handle customer interactions, sales queries, finance applications, service bookings, roadside assistance and administrative tasks in a consistent manner across large volumes.
According to Stucky, the critical factors now are leadership, process redesign, and organisational readiness. “Companies that apply AI effectively can shorten response times, enhance customer experience, and expand service capacity without lowering diligence standards.”
Nicky Weimar, Group Chief Economist at Nedbank, offered a measured economic perspective for the automotive industry. She opined producers and exporters are contending with rising domestic operating costs, changing global trade dynamics, strong competition from lower-cost imports and currency volatility. On the domestic side, vehicle demand has held up relatively well, supported by real income growth and credit appetite, though momentum may ease into 2027.
Weimar highlighted that inflation, fuel prices, energy disruptions, and possible interest rate adjustments remain risks for both businesses and consumers. “The picture is not straightforward, particularly for producers and exporters who face multiple headwinds,” she said, while adding domestic demand continues to offer a counterbalance for South Africa’s automotive value chain.
https://bit.ly/4iB8gW3
No comments:
Post a Comment