Countrywide load-shedding hampers motor industry growth and production

Load-shedding, even under the best circumstances, and employing alternative power sources, are beginning to affect the viability and productivity within all businesses.

“In the automotive retail sector, load-shedding is putting a great deal of extra stress on vehicle retailing and servicing, as well as affecting the viability of dealerships, as they are forced to spend large amounts of money to install alternative energy sources as well as fuel for generators,” commented Mark Dommisse, chairperson of the National Automobile Dealers’ Association (NADA).

Experts predict that we will have to deal with load-shedding for at least the next two years. This means that without access to alternative sources of power, your business, and in particular the motor industry, both dealers and customers, will have to manage service and repair delays and completion of financing deals.

“Backup solutions, which most dealers are taking or will be forced to take, require a substantial amount of unbudgeted investment and, in the case of generators, significant ongoing fuel and maintenance costs. Unfortunately, these costs will at some stage need to be passed on to the already cash-strapped consumer, while also negatively affecting a dealership’s bottom line.”

The nature of power used by certain tools and workshop lifts may demand heavy-duty generators, which will be expensive to install and operate.

Frequent changes in load-shedding schedules inhibit effective planning, said Dommisse.

“Another major impact of frequent high stages of load-shedding at the level we are currently experiencing is the significant impact on cellular network towers and other forms of communication. This significantly slows down the ability to communicate with clients, suppliers, fitment centres and banks, for vehicle finance,” explained Dommisse.

Franchised dealers are concerned about the supply of replacement parts, and although vehicle manufacturers are excluded from load-shedding, component manufacturers are not. An inability to supply parts timely within production schedules may well slow down production.

“This is indeed a very worrying time for vehicle retailers, coming so soon after the two-year hiatus due to the Covid-19 pandemic, the flood damage in KwaZulu-Natal and during a time when many dealerships were just getting back on their feet,” concluded the NADA chairperson.

Source: NADA