Motor Retailers to clean up their act

Retailers must clean up their act

Unscrupulous motor retailers will need to get their act together before the implementation of the Consumer Protection Act (CPA) which comes into force in April 2011. Decent and honest motor retailers will have very little to fear. It is those who have been giving the motor retail industry a bad name that will be weeded out by the CPA.

The CPA will drive more responsible motor retailing in South Africa. While I welcome the Act I believe it will take some time to implement properly and there will be some teething problems, however I am confident that it will be sorted out relatively quickly. Consumer Protection Acts in other countries has been mostly very effective. In Australia for example, retailers are very weary of the CPA and this has resulted in more responsible retailing.

Changes to contracts, point-of-sale, advertising content and sales processes will be required as well as education of staff from motor retailers but there shouldn’t be any excuses to comply.

A key component of the CPA for motor retailers is that the consumer has a right to return goods for a full refund. This is a general right and applies when the consumer receives the product and on examining it realises that the product is not that which was ordered or that which was, for example, advertised in a sales brochure.

The Act changes the way warranties and returns must be handled. If the goods are not suitable for the purpose for which they are intended, the consumer is entitled to return them at the suppliers risk and expense and without penalty and may obtain a full refund or have the item/s repaired. It provides for the right to return goods in certain circumstances. A consumer must be allowed a reasonable time to examine goods. This right means that goods can be returned to a supplier, for a full refund, in the following instances: – If the consumer could not examine the goods; – If the consumer is exercising the 5 day cooling off period provided to him for goods sold by way of direct marketing;

Deputy Manager of consumer affairs Desmond Pillay said when the Consumer Protection Act (CPA) comes into effect on 31 March 2011, “it is fair to say voetstoots would not apply in such a case”. This is thanks to the addition of an “implied warranty of quality” in the CPA, which means that any and all goods that fall within its scope must meet certain quality criteria.

In addition to common law warranties and contractual warranties, the CPA creates an implied warranty of quality for all goods.
• The producer, importer, distributor and retailer each warrant that the goods comply with the quality provisions and standards (“the requirements”) set out in the CPA.
• This is a minimum warranty for all new and used goods (excluding auctions).
• This means that within 6 months of delivery, the consumer can return goods which fail to comply with the requirements, without penalty and at the suppliers risk and expense.
• The supplier may repair or replace the goods or refund the purchase price (at the consumer’s choice).
• If the consumer opts for repair, and the defect occurs again within the next three months (or a new defect appears), then the supplier must replace the goods or refund the purchase price! This may have serious consequences for the motor industry.

And if there are any defects at all, these should be explicitly described to the buyer. If the customer in the example bought the car after the CPA came into effect, the car dealer would have to take the car back and repair any defects or give the customer his money back.

When purchasing a motor vehicle, here are some tips to watch out for:

• Make sure you understand what the total cost of the vehicle is to you. This way you will not be surprised when you have to pay.

• If it’s a used vehicle, make sure you buy it from a reputable dealer. If you are concerned about the history of the vehicle have it checked out by the AA or the like. Buy from a dealer registered at the RMI (Retail Motor Industry www.rmi.org.za).

• Make sure the vehicle has a full service history. Check the service book for all the stamps before taking delivery of the vehicle.

• If you are financing the purchase, make sure you read the contract and understand how the payments are going to work. Make sure you can afford the payments.

• Ask questions. Make sure you understand what you are getting. Don’t be afraid to ask questions.

In conclusion, the CPA is good news for consumers in that they have recourse should they not receive the goods originally agreed upon or advertised, as well as for the motor retailing industry as it will force unscrupulous dealers to clean up their act.

Electric cars vs hydrogen fuel cells

Scientists are worried that the world will run out of oil soon. Soon may be anything from 50 years to 200 years. This is one of the reasons why fuel prices are constantly increasing. It’s a simple matter of supply and demand. It is for this reason that alternative fuel sources have become a popular topic, not because of the world’s interest in saving the planet. Be that as it may, and notwithstanding the motives of big business, the resulting investment in the development of these alternative fuel sources will have a positive effect on our planet in any event.

The Nissan Leaf will be on our roads soon.

There are two types of fuel sources that will in all probability win the race to become the fuel of choice that will power the cars of tomorrow. Electricity and hydrogen powered fuel cells. Which one will ultimately win the race?

When hydrogen is burned in an engine, the only emissions given off is water, so a hydrogen powered vehicle is a zero emission vehicle. Hydrogen is a better fuel than petrol because it has the highest energy content per unit of weight of any known fuel.

Hydrogen is a very abundant element, one of the most abundant elements on the planet. While hydrogen is currently made using fossil fuels such as natural gas, coal, and oil it can be extracted from water and we all know that there is a lot of water on the planet.

Unfortunately there are some problems with hydrogen. One of the biggest problems with using hydrogen to power vehicles is that the world will require a completely new infrastructure to replace the traditional petrol station. Another problem is that the technology to store hydrogen safely is not mature enough.

Electric cars can also be considered zero emission cars but they require power from the electricity grid and the production of electricity does give off emissions. Fortunately power stations are starting to produce cleaner electricity and the “cleaner” they get the “cleaner” the electric cars will become. Electric cars are substantially less polluting than petrol or diesel vehicles and their engines are more efficient, meaning that electric vehicles require less energy to run.

Because of the technological hurdles with hydrogen most of the motor manufacturers have invested heavily in the development and production of electric vehicles so we are seeing electric powered vehicles on the roads before hydrogen. One of the challenges with electric vehicles are the batteries. The batteries are expensive and don’t keep their charge for very long. The Tesla Roadster can get up to 400km’s with a single charge but most other electric vehicles have a maximum reach of no more than 200km’s.

The batteries also take a long time to charge, up to 5 hours. Nissan are making great strides in the development of their electric vehicles and in my opinion, have overtaken Toyota as the leader in electric vehicle development. Nissan recently launched the Nissan Leaf. It’s a revolutionary vehicle that costs about as much as a similar sized petrol car. The Leaf will go up 200 km’s on a single charge and with it’s new quick charge technology the battery can be charged up to 80% of it’s capacity in lest than 30 minutes.

Notwithstanding the great technological advancements made with electric vehicles I believe that hydrogen will ultimately win the race. It does seem then that the vehicle manufacturers have placed their bets on the wrong solution. If they had invested in hydrogen from the beginning then we would have had solutions to these challenges already. Billions are being spent on electric vehicles and it could all be for naught in a similar vein to the Beta and VHS debacle. They will get it right in the end though. No doubt.

Cloud Computing in South Africa

So maybe this doesn’t concern you right now but it will. In about 12 months.

Cloud Computing is Web-based processing, whereby shared resources, software, and information are provided to computers and other devices (such as smartphones) on demand over the Internet. Cloud Computing is probably one of the fastest growing development sectors in the world due to the expected demand. There are many pseudo cloud computing services already available, such as Evernote and DropBox. Both these services allow you to store data in the “cloud”.  Many pundits are betting against Cloud Computing becoming mainstream but they have it wrong. The pure convenience of being able to store your data centrally and being able to access your data from anywhere using any device is fantastic. You don’t have to use your email as your filing system, as most people that travel a lot are forced to do. You don’t have to worry about redundancy and disaster recovery. It’s all taken care of.

That’s all about data storage. What about using applications on the web and storing the data in the cloud? Google are certainly front-runners at this point with their suite of applications that include Google Docs etc. No doubt that these aren’t really “serious” applications yet. They are more for convenience and anytime, anywhere access. But boy, there are some really cool “Cloud” applications out there already! PicNik was recently acquired by Google. It’s a fully fledged photo editing application that runs from your web browser. There are literally thousands of start ups that are building Cloud Computing applications that will be launched into the market in the next few months.

So why is this important? Because the hardware companies are following suit. It’s a known fact that “hardware follows software” in much the same way as “form follows function”. In this case the guys in Cupertino (Apple) are very big influencers. The iPhone was the first, the iPad the second and now the ultra portable Macbook Air. These devices really don’t have hard drives. They are primarily for consumption, although some would argue that the Air is not. The iPad can hardly store anything more than your applications, music and photo’s. If you want to store stuff then you must get an online storage service such as DropBox. The Macbook Air is not much different. It comes with either 64GB or 128GB Flash storage. Solid state storage is in, hard-drives are out. It’s just a matter of time before computing will change forever, where you will use applications over the web and store your data in the cloud. The Netbook is another example of a “dumb terminal” that can almost only access the Internet.

The reason why this is particularly important in South Africa is because of our really poor connectivity. South Africa’s Internet connectivity must rate as one of the worst (from a performance point of view) and one of the most expensive. Our ADSL coverage is very poor, WIMAX is only provided in major metropolitan areas and 3G is prohibitively expensive, if you can get connected.  I am concerned that our connectivity to the Internet will not be able to able to keep the pace with international computing developments. If devices such as the Macbook Air become completely Internet dependent and the bandwidth requirements are extensive then we will certainly not be able to use these devices effectively. Netflix is a subscription-based movie and television show rental service that offers media to subscribers via Internet streaming and it is not available in South Africa probably due to licensing issues. Even if Netflix was available in South Africa we would not be able to use it due to the poor international bandwidth in this country. Let’s face it, our broadband sucks.

Watch how hardware developments are going to take quantum leaps in the next year and watch how we, at the southern tip of Africa, are going lag behind. Unless the South Africa government takes some serious action against the companies that continue to exploit and overcharge us for bandwidth and unless the government facilitates serious investment to get more and better bandwidth, we are in going to be in real trouble.

Face of motor retail industry set to change

The face of consumerism in the motor retail industry is set to change dramatically in the next ten to twenty years and the driver for the changes is none other than-technology.

Image by Enjith Krishnan. Just as other retail industries have been affected by advances in technology, the motor retail industry is in no way exempt from these advances and what has been standard practice in the industry from manufacture to retail practice for the last century or so, will see drastic changes in no less than the next decade.

Just look at the concept of “cocooning”, that is, the increasing trend whereby people opt to remain at home in the comfort of their homes where all their needs can be met, is a reality and one that the motor retail industry will have to adapt to.

I see a future where consumers will be able to visit a dealership, look at the exterior and interior of vehicles and even test drive vehicles without stepping out of the living room. Consumers will be able to enjoy a fully immersive retail experience at home powered by developments in 3D TV and Heads-Up Displays. The days of large luxurious dealerships may become a thing of the past in the next few decades.

What’s more the South African motor retail industry will benefit from these technological advances. Consumers will no longer be paying for “Taj-Mahal” dealerships and the concomitant expensive building and operating costs. The future will see us driving electric, fully recyclable and disposable vehicles that will not need to be serviced and will cost a fraction of the price of a petrol or diesel vehicle.

The past five years has seen the dramatic evolution of manufacturing in that vehicles are being made to order. In the future consumers will order their vehicle from the retailer and the vehicle will be manufactured on demand.
It is essential that retailers adapt to these changes since the manner in which they deal with consumers will change. Consumers will always be “owned” by retailers as retailers are their point of call (since they cannot talk to factories) however the interaction between consumer and retailer will be different due to consumers being able to “personalise” the manufacture of their purchase. The change required by retailers is a mindset change – an industry that has remained much the same for the past century or so will require retailers to accept and adapt to an ever changing world enhanced by technology.

The South African motor retail industry does not fare particularly well with regards to technological infrastructure and this is mainly due to Telkom’s monopoly which has largely cost the South African economy. South Africa may be behind technologically but the outlook for the future is a positive one if retailers and the industry are amenable to embracing the technological advances. Retailers can look forward to a cheaper, more personalised and efficient retail experience.