The industry continues to reel as more manufacturers have fallen under the continued scrutiny of the Competition Commission and have been referred to the Competition Tribunal for alleged anti-competitive practices. The long-awaited second salvo to be fired at the South Africa motor industry by the Competition Commission proved very wide ranging in its scope and the number of parties involved. The announcement was made in May, almost a year after the initial bombshell fell, with Toyota being cited and subsequently paying an administrative penalty of R12-million.

At the same time the global motor industry was being rocked by growing claims of sex, bribery and corruption involving employees of Volkswagen, Europe's biggest vehicle manufacturer. They are alleged to have set up front companies to win supply contracts for work in India and Angola and to have arranged expensive holidays, prostitutes and tolerance of corruption to keep trade union leaders "sweet". One of the upshots has been the resignation of several senior executives, including Peter Hartz, VW's head of personnel. Many other senior employees are being investigated for implication in the scandal.

Back on local ground we find that BMW, Citroën, General Motors SA, Nissan, Volkswagen SA, Subaru, and DaimlerChrysler SA have all been referred by the Competition Commission to the Competition Tribunal for alleged contraventions relating to resale price maintenance, a euphemism for price-fixing, and/or collusion. Dealers from BMW, VWSA, DCSA, GMSA and Subaru are also being investigated. Penalties can be as high as 10% of annual turnover.

The announcement resulted in many complaints about the high profile motor industry being singled out by the Commission, when there are many franchise operations in South Africa that impose fixed pricing on their franchisees.

There were also complaints about "trial by media" before any hearings had taken place and before many of those involved knew what charges they were facing. BMW SA was particularly vehement in this regard, only for the Commission to defend its actions very quickly.

An odd component in the Commission's statement was to the effect that the Motor Industry Development Programme (MIDP) is another area of operations they would like to investigate. As Naamsa said in a statement following the Commission's announcement - authorities (such as the Commission) should be careful not to destabilise an industry which continues to make a major contribution to the South African economy and which has built up a consistent track record of major foreign direct capital investment in the country.

At the same time BMW was appealing to the SA government to be proactive in maintaining the support of the global motor industry by announcing sooner rather than later what its intentions were when the current MIDP expires in 2012. The company pointed out that long lead times for new model manufacturing programmes required feedback urgently so company's could make a decision about "staying in South Africa and extending our business."