Speaker 1: It's been interesting to look at the different impact that
Speaker 1: different tariffs are having in different places, sometimes even when
Speaker 1: they haven't really come in yet. So there was confirmation today,
Speaker 1: for example, that mer CD's Benz is suspending production at
Speaker 1: its East London plant. It's a big employer in that area.
Speaker 1: You can imagine the concern. Now mer CDs bens are
Speaker 1: not saying the design understand it, but it seems fairly
Speaker 1: likely that the main reason is that the US tariffs
Speaker 1: of twenty five percent on all cars entering American markets
Speaker 1: would be having a big impact on the CD's Benz
Speaker 1: and as a result they've had to take the decision
Speaker 1: to stop production for a while. It's really, I think
Speaker 1: the volatility and the uncertainty. And we'll talk a little
Speaker 1: bit more about uncertainty in a couple of moments, and
Speaker 1: we'll just talk about the impact that that has on policy.
Speaker 1: And of course, with our national coalition being in the
Speaker 1: shape that is in, this is kind of what it's
Speaker 1: going to be like for a while. But while we've
Speaker 1: got tariffs having that impact on the CDs Benz and
Speaker 1: presumably then on their production plant in East London, sometime
Speaker 1: brokers Broker Solutions excuse me putting out a report suggesting
Speaker 1: that insurance for some cars, insurre is of some cars
Speaker 1: in South Africa are writing off, writing them off when
Speaker 1: they've been damaged in an accident, not because they're damaged
Speaker 1: beyond repair, but because it's simply impossible to get parts
Speaker 1: for them, and that car parts getting car parts has
Speaker 1: been affected by all of this. Warren Tucker is a
Speaker 1: vehicle reviewers, someone who knows a thing or two about cars. Warren,
Speaker 1: Good Evening. It's one of those kind of strange things
Speaker 1: where a headline from the Trump administration may actually be
Speaker 1: having an impact on getting car parts. Is this proving
Speaker 1: to be quite a big problem.
Speaker 2: Yes, Good Evening, Stephen, You see, you see, it's kind
Speaker 2: of like one of these stories where you say the
Speaker 2: chickens are coming home to roost. Okay. So, if we
Speaker 2: look at South Africa, South Africa in the nineties we
Speaker 2: produced most of the vehicles for export purposes. South Africa's
Speaker 2: a special country. We had special models you only found
Speaker 2: in here. Many manufacturers looked at our market and they
Speaker 2: built vehicles for us because we had such a large
Speaker 2: buoyant car market. We've got a car loving public. Fast forward,
Speaker 2: a couple of years, we've got load shedding that impacted
Speaker 2: a lot of the manufacturing sector. I mean, if you
Speaker 2: look at Utunate, you've got the likes of Goodyear, bridge
Speaker 2: Stone Continental. All the big tire manufacturers started shucking down plants,
Speaker 2: and that has a knock on effect down the line. Now,
Speaker 2: previously we would rely on local manufacture of parts, okay,
Speaker 2: and vehicles were assembled locally. Therefore the parts manufacturers were
Speaker 2: local as well. Okay, And fast forward to where we
Speaker 2: are now, that's not really the case anymore. We are
Speaker 2: importing more than what we are producing, and that puts
Speaker 2: us open to the trade winds of the world. The
Speaker 2: tariff increases the Donald Trumps of the world that pull
Speaker 2: decide that X, y and z must change, so it
Speaker 2: impacts us.
Speaker 1: I suppose it's difficult to know how many cars are
Speaker 1: being written off because you couldn't get this part or
Speaker 1: another part, and every sort of person will have a
Speaker 1: different story. But it seems to me pretty obvious. No
Speaker 1: one wants to ride off a car when it can
Speaker 1: be fixed. I mean, I realize it'll go to other places,
Speaker 1: but the amount of value that must be lost is huge.
Speaker 2: Well, yes, and no, so There's also an another part
Speaker 2: of this that you must look at is so when
Speaker 2: the vehicle's written off in other countries, the vehicle is coded.
Speaker 2: So what that means is the vehicle would be would
Speaker 2: be would be loaded onto a system as a write off,
Speaker 2: and therefore that vehicle would not attract bank finance and
Speaker 2: the vehicle could be purchased and repaired, but it is
Speaker 2: not worth what it was worth originally. In South Africa,
Speaker 2: the insurers they have found out that hang on, if
Speaker 2: we don't code these vehicles and we sell them used
Speaker 2: used vehicle, okay, then people are buying these vehicles and
Speaker 2: they're paying a lot of money for these vehicles that
Speaker 2: at salvage auctions, at salvage depots and then repairing the vehicles,
Speaker 2: and these vehicles are finding their way back onto used
Speaker 2: car dealer floors. So you could be buying a vehicle
Speaker 2: that was previously written off and repaired. Now there are
Speaker 2: systems that have been put in place where people can check,
Speaker 2: but this has gone on for another of a long
Speaker 2: time where these accident vehicles are finding their way back
Speaker 2: into the used car sector sector and because of that,
Speaker 2: they are fetching top dollar at insurance salvage auctions.
Speaker 1: Presumably they're not as safe. They're not as safe as
Speaker 1: they should be, and that must be an issue.
Speaker 2: That isn't issue. A lot of vehicles that are structurally
Speaker 2: written off are being repaired and they feared badly and they,
Speaker 2: as I said, they do find their way onto the
Speaker 2: floor and are sold to unscrupulous as sold to buy
Speaker 2: unscrupting stealers to the general public, and they find out
Speaker 2: later that there's a problem once it's too late.
Speaker 1: Is there another issue? So we've got newer brands coming
Speaker 1: into South Africa, and I'm talking specifically about the Chinese brands. Now,
Speaker 1: they're not made, they're not made here. They're not, as
Speaker 1: far as I know, assembled here. I know there are
Speaker 1: talks to assemble some of them here, but not at
Speaker 1: the moment. So I presume then that the parts networks
Speaker 1: that you might have for say Volkswagen or Ford or
Speaker 1: Toyota or whatever that's been here for a very long time,
Speaker 1: you don't have those parts networks here, you know, in
Speaker 1: the same way that you would for other brands. And
Speaker 1: that must be a problem.
Speaker 2: That is a big problem. And you can actually see
Speaker 2: that with a lot of the vehicles. So with the
Speaker 2: Chinese vehicles being imported. What we see is you've got
Speaker 2: to import to the franchise importer that imports the vehicles,
Speaker 2: and there's a separate company that imports the parts. And
Speaker 2: what tends to happen is is the person importing the
Speaker 2: parts is waiting to fillow content in a first before
Speaker 2: they bring the container into the country. So they're waiting
Speaker 2: to follow that container and then there's a lag in
Speaker 2: time in terms of parts getting to the borders of
Speaker 2: South Africa. Now what's happened is that they have gotten better.
Speaker 2: They are keeping a lot of the service parts and
Speaker 2: your day to day consumables. But let's say vehicles gets
Speaker 2: into an accident and you need headlights, front bumper, radiator, bonnets.
Speaker 2: There's shortages of that and you tend to wait for
Speaker 2: those parts to be brought in. Where As you established brands,
Speaker 2: your Folkswagens, your Audi's, your toyotas hyndees kias they have
Speaker 2: established parts depots here where where the manufacturer is represented
Speaker 2: in South Africa, they have established parts depots. So parts,
Speaker 2: if anything, the longest time you'll wait for a part
Speaker 2: is twenty one days. But the part they will get
Speaker 2: the part to you, and that we see we see
Speaker 2: in a lot of issues coming through from Chinese vehicles
Speaker 2: with regards to that.
Speaker 1: How long will it take do you think before? I mean,
Speaker 1: I presume at some point that someone will be stucking
Speaker 1: all of the Chinese parts. I mean it would make
Speaker 1: economic sense for them to do it, especially if they
Speaker 1: can have a stock pile and sell them to you
Speaker 1: so you don't have to have the weight, you pay
Speaker 1: anything to get your car back.
Speaker 2: Percent so you will see. Look, there are new entrants
Speaker 2: into the market. It's all about them setting up themselves
Speaker 2: in the country. It's easy to sell the vehicle, but
Speaker 2: it's after sell service. And that's one thing that you
Speaker 2: must look at when purchasing a vehicle. Those people with
Speaker 2: long memories will remember that once upon a time Hyundai
Speaker 2: it came into South Africa with a bang and then
Speaker 2: went barely up and lots of people were stuck with
Speaker 2: vehicles that they couldn't get parts for. Then Imperial brought
Speaker 2: them back into South Africa, but brought them in in
Speaker 2: such a way that they set up everything from start
Speaker 2: to finish. And that is going to be the case
Speaker 2: with the Chinese vehicles, where at some point they need
Speaker 2: to be established. They need to be more stringent laws
Speaker 2: put in place so that manufacturers when they do come in,
Speaker 2: there are requirements for them to be to establish certain
Speaker 2: market offerings. For example, a German that the German vehicles
Speaker 2: have to keep parts for at least ten years after
Speaker 2: the last series of that specific vehicle came out. So
Speaker 2: the three series, the E ninety, they need to keep
Speaker 2: parts for at least ten years after that at their dealers.
Speaker 2: So those are laws that need to be put in
Speaker 2: place for everybody so that the playing field is level.
Speaker 1: I suppose in a way with cars and parts, you
Speaker 1: get what you pay for, right, if you are buying
Speaker 1: a cheaper car, you're probably going to battle for parts, definitely.
Speaker 2: Look if you look at the market at the moment,
Speaker 2: the new car sells have picked up, and that's mainly
Speaker 2: driven by the Chinese imports, because what people are saying
Speaker 2: is that I can buy a brand new trying to
Speaker 2: offer the same price as buying a second hand German
Speaker 2: equivalent German German car. And with this vehicle, I'm getting
Speaker 2: all these dolls in vessels and they look smart, and
Speaker 2: that's you know, that's the thing that's that's been sellable
Speaker 2: at the moment, but what's the aft to sell service, Like,
Speaker 2: what's that car going to be worth in two or
Speaker 2: three years time? What is the dealership or the dealer network,
Speaker 2: what does that look like? And a lot of the
Speaker 2: time consumers are just interested in getting into a new car.
Speaker 2: The other things come afterwards. They think about that later.
Speaker 1: Warren Tucker really appreciate the time of the thoughts. Thank you.
Speaker 1: As you can hear experts on the car industry and
Speaker 1: vehicle reviewer