Background and Explanation
| (i) | The MIOSA is an established Ombud Scheme and has operated since 2001. Due to this, there is an existing staff contingent, expert knowledge base, premises, telephone infrastructure, certain equipment, assets and stationary and IT network in place and sustainable. |
| (ii) | During 2012, the MIOSA received 22,320 complaints with a value of R 156,500,000.00 all of which have been resolved. |
| (iii) | Before to the coming into operation of the Act, the MIOSA adjudicated disputes between consumers, OEM's and Retailers. In terms of the Act, the MIOSA has jurisdiction over all the members within the Automotive Industry. |
| (iv) | According to the records of the Motor Industry Bargaining Counsel, there are approximately 24 000 entities forming part of the Automotive Industry. In addition there are currently 42 motor vehicle OEM's and Importers forming part of the Automotive Industry. |
| (v) | The MIOSA shall vastly expand its current infrastructure to meet the needs of Consumers in line with other Ombud MIOSAs established under various forms of legislation. However as an existing MIOSA, the majority of start-up pressures and challenges will not be present which leads to a cost and efficiency saving from the beginning. |
| (vi) | The sustainable funding model below is based on the assumption that, following accreditation, the MIOSA will initially, in the first one to two years only be able to recover contributions from 60% of the retailers and all of the NAAMSA motor vehicle OEM's and importers forming part of the Automotive Industry. |
| (vii) | The contribution rate as set out in clause `vi' above is based on a worst-case scenario and the quantum of each entity's contribution has initially been increased accordingly in order to ensure that the MIOSA is able to fulfil its obligations in terms of its budget requirements without the necessity of collecting more than 60% of required contributions. |
| (viii) | Each year the quantum of required contribution will be reviewed in line with the success rate of the previous year's contributions collected along with the revised budget requirements. At no stage will the model rely on a 100% collection success rate. |
| (ix) | he cost of collection will at all times be kept to a minimum and decisions regarding outsourced collection or in-house operations will be made with this in mind. The model has been structured to allow for this cost. |
| 1. | Funding during Transitional Phase from date of accreditation: |
During the transitional period, the MIOSA will be funded as follows:
| 1.1 | The MIOSA will charge and invoice all motor vehicle OEM's and Importers a combined annual fee equalling 50% of the MIOSA budget and each individual OEM or Importer's contribution shall be calculated by dividing 50% of the approved budget by the total number of entities who directly import or manufacture Goods. |
| 1.2 | The MIOSA will charge and invoice all retailers a combined annual fee equalling 50% of the MIOSA budget and each individual retailer's contribution shall be calculated by dividing that percentage of the approved budget by the total number of retail premises from which business is being conducted in the Automotive Industry. |
| 2. | Funding from date of accreditation: |
From the first anniversary of the date of accreditation, the MIOSA will be funded as follows:
| 2.1 | The OEM's and Importers shall be liable to contribute 20% of the approved budget and each individual OEM or Importer's contribution shall be calculated by dividing 20% of the approved budget by the total number of entities who directly import or manufacture Goods. |
| 2.2 | The retailers shall be liable to contribute 80% of the approved budget and each individual retailer's contribution shall be calculated by dividing 80% of the approved budget by the total number of retail premises from which business is being conducted in the Automotive Industry. |
