Even the scholars of free market principles and laissez-faire would agree that a suitably structured framework of regulation has its place in organised business, but are we over-regulated?

The Law offers clear obligations, rights and duties. It further promotes fair trade and protects and safeguards private property rights. However, regulation must be considered not only in light of its intentions and objectives, but also its likely and collective outcome – both intended and unintended – on the advancement of business as a whole and the economy.

Growth versus compliance
Regulation may have the effect of reducing flexibility and the business owner’s control over the business. Instead of concentrating on the running of the business, small business owners spend valuable time adhering to government policies and ensuring compliance with regulations. Implying an adverse effect on not only business operations, but to the economic growth of the country.

In the Global Competitive Report 2014-2015 of the World Economic Forum, South Africa ranks 120th out of 144 countries in terms of burden of government regulations. The low ranking is a serious concern not only to growth and expansion of existing businesses but to global competitiveness and attracting foreign investment.

Cost of compliance
Regulations start by imposing high start-up costs for small businesses, such as licensing, registration requirements and ongoing compliance which impose excessive and unnecessary burdens on the small businesses. This has a ripple effect of increasing the cost of doing business, which is then transferred to consumers.

Administrative burden
This legislation increases the input costs of businesses, imposes a burden associated with compliance costs and administration, which can reduce a business owner’s ability to focus on factors that contribute to the long-term growth and development of small businesses.

To answer the initial question: Yes we, the Independent Dealer Association, are of the opinion that we are over-regulated and that these costs for compliance will only increase. Most of the legislation that governs us is self-regulatory and comes with a huge financial and administrative burden. Legislation is vague and is left open to interpretation by those that it governs.

In an economy that struggles to sustain a growth percentage of 1.5%, over-regulation can only add to the problem.

For nearly a year now the Lightstone Group – Signio in close collaboration with Wheels Web – have worked on a solution to lighten the burden of compliance within the dealer environment. This solution is going to be a game changer and we envisage implementation thereof in early 2016. We will keep our Dealer Members posted on these developments.

SALES AND TRENDS WITHIN THE IDA ENVIRONMENT – OCTOBER 2015

Top 5 passenger vehicle sales per manufacturer

VOLKSWAGEN
TOYOTA
FORD
BMW
NISSAN

Top 3 commercial vehicle sales per manufacturer

NP200 1.6 P/U S/C
UTILITY 1.4 S/C P/U
UTILITY 1.4 A/C P/U S/C

Top 10 derivatives sales

POLO 1.4 COMFORTLINE 5DR
FIGO 1.4 AMBIENTE
POLO GP 1.2 TSI COMFORTLINE (66KW)
POLO VIVO GP 1.4 TRENDLINE 5DR
POLO VIVO GP 1.4 CONCEPTLINE 5DR
NP200 1.6 P/U S/C
COROLLA 1.3 PROFESSIONAL
POLO GP 1.2 TSI TRENDLINE (66KW)
UTILITY 1.4 S/C P/U
UTILITY 1.4 A/C P/U S/C

The average age of vehicles sold in October was 3.32 years.