Auto Recycling World learns more from Claire Macfie, Editor of Automotive Refinisher, about the automotive recycling industry issues in South Africa, including unauthorised vehicles and their parts being imported to the country, as well as how non-compulsory vehicle insurance has led to corruption.
In recent discussions I have had about auto parts recycling from around the globe, I took heart that in some countries, they are now doing well in this sector, started exactly where South Africa is at present with organised chaos and no plan as opposed to the very important, money-saving initiative or environmental consideration.
In a perfect world, people desire to do the right thing for the planet and decide to recycle and repair instead of replacing auto parts. However, we live in this world, one that is post-COVID, and which has hit our local economy like an aftershock, leaving ever more dire poverty and devastation in its wake.
The hope in me sees that if you are beginning with an almost fresh start, then a new area of the industry can be built, which makes me very excited indeed. It must be said that South Africa has a tiny handful of recycled parts guys out there, but nothing of huge significance as yet.
Despite South Africa having laws preventing the import of grey vehicles to protect our local market, it doesn’t seem to have stopped the plethora of grey sub-standard parts that have found their way with ease into local businesses.
Vehicle insurance is optional in South Africa, and more than 80% of the driving market is actually uninsured. With a new democracy some 29 years ago, the new government decided that establishing a Road Accident Fund (RAF) would be a far better idea instead. The fuel has a levy added to it, and if you are involved in an accident, you can claim compensation (only if a personal injury has been sustained). As with many things in life, they appear fabulous on paper, but the reality has led to lawyers and scammers getting extremely rich in this process as corruption has run rife and very little restoration finds its way to road accident victims after fees have been charged.
Despite being bankrupt and an absolute den of iniquity and corruption, the RAF is still taxed, and the dead horse is still being touted as the winner. It defies all logic and accountability.
Where is the insurance industry in all of this? Silent.
Less than 20% of insured drivers endure high tariffs and work steering as they are advised of “preferred” bodyshops and second-hand parts replacement without the majority of vehicle owners being aware of their rights to ask for their preferred repairer or equitable consideration of reduced cost by using second hand or reusable part options.
Parts scarcity is next level as we wait – while container wars carry on – for months on end for large and small parts alike to seep into OEM warehouses to fulfil orders for cars needing repair. People are holding onto their cars for longer and not repairing them if they’re driveable.
Highjacking has increased by 25% this year alone, and it has to have a role to play in the parts market as well as the obvious “easy money” to be made by almost 50% of the nation that is unemployed.
Again, it’s just the sound of crickets when it comes to our insurance houses and government security officials who could do a lot of good but choose to remain silent. It appears that when the cats are busy licking the cream, their ears and eyes remain closed. They enjoy the tallest and latest constructions to house their employees, and adverts appear on various media platforms every five minutes with a call to take insurance. Still, there doesn’t seem to be any plan about the recycling of parts or paying equitable allowances for safe repair and sustainable continuity of repair facilities.
Currently, the write-off level of vehicles equates, in most instances, to around 40% of market value. This figure is way too low and was enforced as an industry norm without any consultation with the collision repair industry, from a level of acceptable value of around 70% originally. This sees many vehicles deemed as uneconomical to repair, directed to salvage operations, where they are mostly bought back by insurances houses at highly inflated values, repaired – sub-standard in most cases – and sold to unsuspecting used-car buyers. This is yet another factor contributing to less salvageable recycled parts available in the industry.
In summary, consideration must also be applied to skills, training and new repair technology. Unfortunately, this focus takes a back seat due to a lack of profits earned to support these important initiatives.
And so, with the vast amount of people not insured and mostly on or below the breadline, recycling isn’t front of mind, but the cheapest parts are, even if it’s a left-hand disc drive light fitted to a right-hand drive car. Absolutely shocking to say the least, but a truth nonetheless.
