Lack of transformation ‘needs urgent action at car dealerships’
Dealer association says it is unable to enforce transformation processes as member businesses have own objectives
The pace of transformation within vehicle dealerships remains woefully slow, and urgent action is needed if the automotive industry is to achieve true transformation, warns Mpho Dipela, chair and shareholder of the Legacy Motor Group (LMG).
“A lack of diversity and representation in dealerships has become an increasingly pressing issue within the automotive industry. There are still only a few major black dealer principals within this space rather than achieving broad-based transformation and empowerment, and there is a particular lack of black and female employees at the middle to senior management level,” he says.
“Given the importance of the sector as an economic driver and job creator, industry stakeholders and particularly manufacturers urgently need to increase focus on skills development, job creation and ownership throughout supply chains,” continues Dipela.
Demonstrating the significance of the sector, the National Association of Automobile Manufacturers of SA (Naamsa) notes the automotive industry currently accounts for about 4.3% of SA’s GDP, 17.3% of the country’s total manufacturing output and represents the fifth-largest export sector.
Dipela argues, however, that original equipment manufacturers’ (OEM) social investment efforts have largely focused on manufacturing, rather than taking a holistic approach to supply chains.
“The barriers to entry for smaller black businessmen to secure partnership agreements with OEMs, and take ownership of dealerships is extremely high, and OEMs have also tended to favour a few larger players rather than consider smaller players,” he notes.
“Likewise, while the investments made by OEMs in skills and development programs has yielded numerous benefits for employees entering the industry and working within manufacturing, there has not been a sufficient level of change at the management tier within the dealer network,” he emphasises.
To address this imbalance, OEMs must re-examine programmes supporting the development and promotion of black individuals within middle to senior management levels at dealership level. This will not only promote diversity and inclusion in the workplace, but also strengthen the industry by bringing in new perspectives and ideas, and stimulating broad-based empowerment, notes Dipela.
“By investing in these programmes, and supporting small players seeking to own successful dealerships, OEMs can help to create a more inclusive and diverse supply chain, while also contributing to the overall growth and economic impact of the industry.”
He adds that OEM dealer principal programmes provide valuable opportunities for individuals to expand their knowledge, skills, and networks. “It is important that we continue to see and support initiatives like these in order to promote greater equality, and maximise the socioeconomic impact of the industry.
Majority black-owned companies have already proven themselves as economic powerhouses, producing and selling high-quality vehicles to the local and international markets, and demonstrating their acumen within the industry, according to Dipela.
“At LMG, we have seen the impact that empowerment and creating new income opportunities can have on communities and households, which is why we hold the values of diversity and inclusion in the highest regard.
“We are dedicated to creating an inclusive and equitable environment for all of our employees, customers, and partners. And we hope to see more industry stakeholders and OEMs invest in the same, so that we can be a truly progressive industry in every way.”
Asked for comment on Dipela's concerns, chairperson of the National Automotive Dealer’s Association (Nada) Mark Dommisse says: “As an association, Nada is unable to enforce and implement transformation, diversity and inclusion processes with its membership, as each business has its own objectives and strategy it follows.
“Having said that, we are committed to assisting members in their transformation endeavours and have a transformation, diversity and inclusion subcommittee in place to do this.”
“It may not always look like it’s developing as fast as it should, but it is thriving in the pipeline of sales managers, workshop and parts managers, accountants and back-office staff who are future shareholders of listed entities, owners of non-listed groups, and already displaying an inherent shift in the industry towards a bright and equitable future,” said Dommisse.
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