SA's small auto repair businesses face challenging new pressures

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Juan Hanekom, national director of the South African Motor Body Repairers’ Association (Sambra), a constituent association of the Retail Motor Industry Organisation (RMI), is calling for enhanced measures to protect and support the growth of small businesses in the sector, particularly through ethical procurement practices and more efficient payment terms.

Small, medium, and micro enterprises (SMMEs) play a vital role in South Africa’s automotive sector, introducing fresh, innovative approaches while generating employment opportunities.

According to the latest MIBCO statistics, of the 2,030 registered MBR employers, a significant 74.29% employ fewer than ten people, and 60.79% operate with just one to five employees.

Hanekom says these businesses are not only pivotal for job creation but also crucial for achieving national production and localisation targets. “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,” he says.

Despite their importance, small businesses in the MBR sector face mounting pressures, including delayed payments, restrictive settlement clauses, and unfair rebate conditions imposed by some of the larger industry players. These challenges limit cash flow, restrict growth opportunities, and, in some cases, lead to business closures.

Hanekom stresses the need for more stringent enforcement of ethical procurement practices and payment structures that do not disadvantage small repairers.

“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.

“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.

“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,” he says.

The bigger picture: Employment and economic impact

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, particularly in youth unemployment, affecting individuals aged 15-34. Here, too, the rate is sitting at 44.6%.

“Given the MBR sector’s role in employment, particularly among small businesses, ensuring their survival and growth is directly linked to job creation. Policies and industry practices that support small businesses can help drive employment opportunities, particularly in a country struggling with high levels of joblessness,” stresses Hanekom.

SAMBRA is conerned that these combined factors are contributing to the exit of qualified artisans from the industry. “One only has to look at the stats to see that