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

• 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.

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.

How green is your prospective car purchase?

My view on the CO2 emissions tax is a little different to the industry doom and gloom. By becoming more “Green” aware when it comes to purchasing a car, we can actively be part of reducing our carbon impact on the earth. It just takes a little mindset change and a big commitment to change…in the words of Barack Obama, “Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.”

For those who don’t know what CO2 emissions tax is: new passenger vehicles will be taxed based on their certified CO2 emissions at R75 per g/km for each g/km above 120 g/km. This tax could add between R5 000 and R10 000 to the price tag of the average
new passenger vehicle.

So, how green is your prospective car?
Well when looking at how green your prospective purchase is read the product brochure or research over the Internet – there are so many sites to help you with this.

To give you a good idea a medium size 4×4 vehicle will emit approximately 270 grams of CO2 per km. A small passenger car that is “Green” will emit anything from 23 grams of CO2 per km. What you need to be looking at is anything below 120g/km – the lower the better!

Did you know that research indicates a close correlation between vehicle engine size, fuel efficiency, and CO2 emissions. In 2007 China became the biggest contributor to greenhouse gas emissions globally, per capita. South Africa emits three times more carbon dioxide, and overall, emits more than the rest of Africa combined. Higher greenhouse levels have led to higher temperatures, or ‘global warming.

In South Africa, besides hybrid cars, there are a myriad of vehicles that are light on fuel and have a low CO2 footprint. These are also called “Green” cars and CO2 emissions are published on the product brochure. “Going Green” refers to an individual’s efforts to help preserve our planet by consciously reducing their carbon impact on the earth.

The automotive industry has been an abuser of the environment for too long and this needs to change. Scientists and politicians can’t solve this alone, but ordinary South Africans can take a stand to impact the environment positively.

Opting to drive a Green car or hybrid vehicle goes a long way towards doing this.

I believe the changes in the industry will be positive as the industry will be forced into making more innovative solutions. And the industry is making ground-breaking progress. Look at Tesla Motors in California which has been producing high-performance electric sports cars to fill the gap for a ‘Green’ sports cars. The industry is being driven to release ‘greener’ cars utilising alternative fuel sources and we will continue to see these being launched in the global market.

But if you are purchasing a 4×4 or bakkie in South Africa there is no good news and the extra price tag as a result of CO2 tax will have to be paid! Let’s hope the industry is working on a low CO2 emission 4×4….

Ignorance is bliss

Henry Ford sold his first car called a “Quadracycle” in 1896. That marked the beginning of the motor retail industry and for the past 114 years the motor retail industry has remained largely unchanged. The only really significant innovation in the retail motor trade has been the Internet and the changes that it brought to the way we interact with customers. Outside of that, everything has basically stayed the same. The engine has improved and the bodywork and designs have changed over time, but the basics of the industry has remained constant. Until now…

In the next 20 years we are going to see changes that’s going to revolutionize the industry. In the same way that the DVD changed the video industry and the way that the digital camera has changed the film industry, we are going to see radical changes over a short period of time that is going to shock the industry to it’s core. Kodac ignored the impending changes and a giant was reduced to scrap in less than 12 months. The same is going to happen to many of the traditional manufacturers and retailers of motor vehicles globally.

I can see them sitting in their boardrooms, shaking their grey heads and saying; “Wir haben gehört, dass vor”. (We have heard that before)

The reality is that no matter the protestations and denials. No matter the counter arguments, change is inevitable and there is no industry on this planet that is more ripe for change than the automotive industry. It has been the monster driving the oil industry and the destroyer of entire eco systems for too long. The time is right for change. And it’s not just me saying so.

“We know what the dangers are here. We know that our oil addiction is jeopardizing our national security – that we fuel our energy needs by sending $800 million a day to countries that include some of the most despotic, volatile regimes in the world. We know that oil money funds everything from the madrassas that plant the seeds of terror in young minds to the Sunni insurgents that attack our troops in Iraq. It corrupts budding democracies, and gives dictators from Venezuela to Iran the power to freely defy and threaten the international community. It even presents a target for Osama bin Laden, who has told al Qaeda to, “focus your operations on oil, especially in Iraq and the Gulf area, since this will cause [the Americans] to die off on their own.

We know that our oil dependency is jeopardizing our planet as well – that the fossil fuels we burn are setting off a chain of dangerous weather patterns that could condemn future generations to global catastrophe. We see the effects of global climate change in our communities and around the world in record drought, famine, and forest fires. Hurricanes and typhoons are growing in intensity, and rapidly melting ice sheets in Antarctica and Greenland could raise global sea levels high enough to swallow up large portions of every coastal city and town.

And this city knows better than any what our oil addiction is doing to our economy. We are held hostage to the spot oil market – forced to watch our fortunes rise and fall with the changing price of every barrel. Gas prices have risen to record levels, and could hit $4 a gallon in some cities this summer. Here in Detroit, three giants of American industry are hemorrhaging jobs and profits as foreign competitors answer the rising global demand for fuel-efficient cars.

America simply cannot continue on this path. The need to drastically change our energy policy is no longer a debatable proposition. It is not a question of whether, but how; not a question of if, but when. For the sake of our security, our economy, our jobs and our planet, the age of oil must end in our time.” Barack Obama – 7 May 2007

So what’s the revolution I am talking about? It’s electric cars of course. In the next few years they are going to completely replace combustion engines and the days of monster trucks and v8’s will be over.

Tata's $2,500, 59-mpg offering described as "eco-car," on display in January

Welcome to the world’s cheapest car at only $2450, yes the car called the Tata Tiny will be replacing the Tata Nano. The price is amazing at 99,000 Indian Rupees ($ 2,500) and runs on electricity.

This car was developed by Tata International and some of the features on the car are pretty basic but  what do you want for the price? a Rolls Royce? The Tata Tiny can seat 2 people and can be recharged daily at 220 volts through 15 amp sockets, a 8 hour charge enables the cars to travel 80 – 100 kilometers. It may be basic but at that price there is no question that it’s going to become very popular, very fast.

The impact of cars such as the Tiny will have on the motor industry will be fundamental. Today’s large auto manufacturers will not be able to compete with the Chinese and Indian companies. The traditionally dominating manufacturers will go out of business. The cars of the future will be sold from any location, not from the traditional Taj Mahal dealerships. You will be able to buy one at your local grocery store. The cars will be disposable, mass produced and environmentally friendly. The entire motor industry will be re-engineered through this revolution.

So, the grey heads in the swanky boardrooms can shake their heads as much as they like. They are about to become extinct. They are as much aware of that fact as the dinosaurs were.

Excellent car ads that cost very little to make

Everyone wants to spend millions on epic productions. Toyota shows that it’s possible to make excellent commercials for very little. It’s not about how much money you throw at it but how much brains you throw at it. Clever has always been far more effective than epic.




The future of online car buying

The Future of Interactive Mobile Computing

There is no question that the car buying process and experience will change dramatically in the next few years too. Technically, today it is possible to do the entire transaction online, but the problem lies with the user experience – the lack of “touch and feel”. The speed with which technology is developing, the availability of bandwidth, the development of practical mobility solutions and the increase in processing power will lead to technologies that we can only imagine today. One of the best examples is the iPad from Apple. It is a truly practical mobility solution that brings a full multimedia experience to the user.

Publications such as Wired Magazine and Popular Mechanics have embraced the technology to produce online reading experiences that were only seen in science fiction movies a year ago. One can read an article about a car and see interactive videos and high definition interactive 3D models of cars. Another technology that is developing at the speed of light is 3D computing. Combining the interactive, multimedia experience of the iPad with a 3D experience (a precursor to holograms) will revolutionize the way we interact with our environment. Imagine browsing a website in 3D and looking at fully interactive and 3D models of cars, being able to look inside the car and under the hood. You will even be able to virtually “kick the tires”.

The idea that consumers want to touch and feel before they buy is true only for today. As the consumer immersion experience improves they will be much more amenable to online purchasing of high ticket items such as cars. All of this is obviously much more true for new cars, especially the strong and well recognized brands. Pranav Mistry from MIT developed a technology called ‘SixthSense’ that allows the user to have a totally mobile interactive integration with the physical world. There is no doubt that the car buying experience is going to change dramatically in the next five years and the obstacles that exist today preventing consumers from buying online will all but disappear.