1. THE RMI ✦ Technology: driving change in the retail motor industry PRESENTED BY JAKKIE OLIVIER CAR CONFERENCE  23 OCTOBER 2013

2. THE PACE OF INNOVATION ACCELERATION The pace of the development of vehicle technology and innovation is accelerating For better or for worse? Technological revolution Impact on automotive aftermarket (RMI members) Diverse industry – all impacted either positively or negatively

3. THE RETAIL MOTOR INDUSTRY IN PERSPECTIVE Size of retail industry:  18 000 + businesses  280 000 + employees Micro businesses vs. listed companies 14 Associations – diversity and complexity Highly regulated environment Car parc:  ± 14 years (10 951 876 cars as at 30/09/2013)  70 brands  2 672 models and derivatives  2 169 249 (19.8%) within warranty period (1-5 years)

4. MAJOR AUTOMOTIVE DEVELOPMENTS OVER PAST 128 YEARS 1885 – 1950 First car developed First electric starter First car radio Electronic indicator lights developed Car air conditioning introduced 1950 – 1999 Seat belts first introduced Cruise control used for the first time 8-track tape players introduced Cassette tape players introduced Airbags used for the first time Antilock braking system introduced First CD player installed in a car 2000 + Hybrid vehicles Next-generation electric cars Autonomous cars

5. EVOLUTION OF THE CAR – AN ONGOING PHENOMENON Designed for better: Safety Efficiencies Convenience Luxury features Environmental benefits Usage of natural resources Driven by consumer demand and preferences Business has no choice and must respond This presents major challenges to the repair sector

6. MODERN CHANGES IN AUTOMOTIVE TECHNOLOGY Powertrain Re-emergence of the electric vehicle Large-scale displacement of traditional engine production by alternative technologies Body engineering diversity Need to make vehicles lighter for improved fuel economy Electronics Presently electronics accounts for 25% of vehicle value, in future it will account for 40% Connected technology (software and controls) Vehicle-to-Vehicle (V2V) connections and Vehicle-to- Infrastructure (V2I) connections

7. ADVANCEMENT OF TECHNOLOGY TIMELINE ONE-STOP SHOPSPECIALISATION TECHNOLOGY ADVANCEMENT

8. CHALLENGES FOR BUSINESS Access to repair information Cost of specialised tools and equipment (ROI challenges) Financial viability shrinking margins increasing costs Training facilities adequate education system – yes or no? Consumer preference and/or choices Gap between new vehicle technology and repair technology

9. SKILLS CHALLENGES IN SOUTH AFRICA Vehicle and Motor Body repair  More advanced systems developed because of pollution and emission controls  Equipment changed and became more advanced  New breed of technicians with knowledge of computers and technology, but no old-school understanding of how it all comes together  CDX Technica – new curricula

10. LABOUR CHALLENGES IN SOUTH AFRICA Trade union movement “Strike season” syndrome Informal sector Disconnect between labour and business objectives

11. GAP: NEW VEHICLE TECHNOLOGY vs. REPAIR TECHNOLOGY Right to Repair initiative Repair shops Franchised dealers (OEMs) Opposing views Brand protection Warranty Competitiveness/Market share Fighting for survival Solution: to find synergy between new vehicle technology and repair technology

12. THANK YOU FOR YOU TIME