Small, medium, and micro enterprises (SMMEs) in the automotive industry are facing ongoing challenges that threaten their sustainability.
Often proclaimed the backbone of the sector, SMMEs play a vital role in introducing fresh, innovative approaches to industry issues while generating employment opportunities for new and existing talent.
“By fostering innovation, adapting to global technological advancements, and integrating into the broader automotive value chain, SMMEs enhance the industry’s competitiveness and long-term sustainability,” said Juan Hanekom, National Director of the South African Motor Body Repairers’ Association (Sambra).
According to the latest Motor Industry Bargaining Council statistics, of the 2,030 registered motor body repair (MBR) employers in South Africa, a significant 74.29% employ fewer than ten people, and 60.79% operate with just one to five workers.
However, despite the importance of these small enterprises, they face mounting pressures including delayed payments, restrictive settlement clauses, and unfair rebate conditions imposed by larger industry players.
These challenges limit cash flow, restrict growth opportunities, and, in some cases, lead to business closures.
Advocating for change
In light of these hindrances, Sambra stresses that more stringent enforcement of ethical procurement practices and payment structures are required in the automotive sector.
“The sustainability of the MBR sector depends on fair business practices. Small enterprises cannot continue to bear the financial strain of delayed payments or prejudicial rebate clauses,” said Hanekom.
“The reality is that with vehicle technology having become more complex, the cost burden of compliance has also increased so it is a double-edged sword for small players who now also have to bear the impact of ever-shrinking margins.”
Sambra has thus called for enhanced measures to protect and support the growth of small businesses in the automotive sector, particularly through ethical procurement practices and more efficient payment terms.
“If we are serious about fostering a thriving, inclusive automotive industry, we need to ensure that SMMEs have the financial security and operational stability to grow,” said Hanekom.
He highlighted that policies and industry practices that support SMMEs can help drive employment opportunities, particularly in a country struggling with high levels of joblessness.
While the official unemployment rate declined slightly to 31.9% in Q4 2024 from 32.1% in Q3 2024, there is no doubt that South Africa is facing an ongoing unemployment crisis.
Sambra is worried that industry headwinds are contributing to the exit of qualified artisans from the auto sector.
“One only has to look at the stats to see that when compared to 2014 we now have 32% less panel beaters and 30% less spray painters,” said Hanekom.
Sambra urges government, insurers, suppliers, and large corporations to adopt ethical business practices that safeguard the future of small repairers.
These include:
- Fair and efficient payment terms – Timely payments with no settlement or rebate clauses that disadvantage small businesses.
- Stronger enforcement of ethical procurement policies – Ensuring that small businesses have a fair opportunity to compete and thrive.
- Greater integration into the value chain – Encouraging partnerships and support programs that enhance skills development and long-term sustainability.
“Prioritising the protection and growth of small businesses in the MBR sector must remain a key priority, not only for our industry, but for the broader economy and employment landscape as well,” concluded Hanekom.
“The success of the motor body repair industry hinges on a fair and transparent ecosystem where small businesses can flourish.”
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