Alternative motor glass offering - Questions & Answers -

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1 Alternative motor glass offering - Questions & Answers - Dear Business Partner Santam introduced the Grandmark sourced product offering in 2011 for motor glass in various areas within South Africa. We are pleased to share with you that we will be expanding the no excess offering to certain TIGA (The Independent Glass Association) sourced products, effective 3 September We have compiled an updated version of a question and answer document which contains all questions we have received from brokers concerning alternative motor glass to date. IS AN EXCESS PAYABLE IF THE CLIENT REPLACES OR REPAIRS THROUGH OUR CURRENT SUPPLIERS? Yes. The normal excess will still be applicable to OE (Original Equipment), NAG or Shatterprufe glass (even if replaced at a Glass Lab or Grandmark/Autoboys or the TIGA network), or if the replacement is performed through one of Santam s other current preferred suppliers, namely: PG Glass, Glasfit and National Auto Glass (NAG). FOR WHICH TYPE OF CLAIMS WILL THE NO EXCESS OPTION APPLY? Pure windscreen claims only i.e. no body or mechanical damage to the vehicle will be included. Repairs to and replacements of windscreens are included. All motor glass (windscreens, rear screens and side glass, windows and quarter vents). Grandmark (Xinyi product only) and/or TIGA (Grandmark / Xinyi, Fuyao, DKG and USG products only). Grandmark and / or TIGA stock most automotive glass, however if a particular vehicle s glass is not available from Grandmark and / or TIGA, it will be sourced from NAG, Shatterprufe or the OE agent. An excess will be payable on all OE, NAG and Shatterprufe glass, due to competitiveness and affordability factors. An excess will be payable on all other (other than Grandmark and/or TIGA) replacements, namely PG Glass, Glasfit and NAG, due to competitiveness and affordability factors. 1

2 WHICH PRODUCTS DO GRANDMARK AND TIGA SOURCE? Grandmark sources and distributes as follows: Grandmark glass which is manufactured by Xinyi Automobile Glass in China, Shatterprufe which is manufactured in Garankuwa and Port Elizabeth (RSA), and OE glass which is manufactured internationally. TIGA sources and distributes as follows: Grandmark glass which is manufactured by Xinyi Automobile Glass in China; Fuyao Glass Industry Group Ltd. Co. which is manufactured in China; Dongguan Kongwan Automobile Glass Ltd. (DKG) which is manufactured in China; Universal Safety Glass (USG) which is manufactured in East London (SA); National Auto Glass (NAG) which is manufactured in Meadowlands (SA), and Shatterprufe which is manufactured in Garankuwa and Port Elizabeth (SA); OE glass which is manufactured internationally. WHICH STANDARDS MUST MOTOR GLASS COMPLY WITH? Santam s minimum certification requirements are: 1. Product: SANS 1191:2005, SANS 1193:2008, 2. Fitment: SANS 10240:2005 and 3. Quality Management System ISO/TS 16949:2002. SABS permits SANS 1191:2005 = High penetration resistant laminated safety glass for vehicles SANS 1193:2008 = Toughened safety glass for vehicles SANS 10240:2005 = Installation of replacement auto-glass in motor vehicles by the direct glazing method International standards ISO/TS 16949:2009 = Manufacturing of glass for use in the automotive industry This certification is only granted to manufacturers of components in the OE supply chain. E-mark / ECE- R43= Installation of safety glazing materials on vehicles (European standard) DOT = Automotive 'Glazing Materials' (American standard) CCC = (Chinese standard) SAA - AS2080 & AS/NZ2208 = (Australian standard) 2

3 ISO 9001: 2008 = Quality Management System (International standard) ISO 14001:2004 = Environmental Management System (International standard) WHICH STANDARDS DOES THE SANTAM PREFERRED GLASS PRODUCTS COMPLY WITH? Product: SANS1191:2005 SANS1193:2008 ISO9001:2008 or ISO16949:2009 Other -International: Shatterprufe NAG (Do not manufacture toughened glass) Xinyi Fuyao DKG USG (Do not manufacture toughened glass) (Only manufacture for the South African market) WHICH WARRANTIES ARE EXTENDED ON THE SANTAM APPROVED GLASS? Product: Product (Warranty) Fitment (Warranty) - Suppliers indicated that faulty workmanship proved to have been performed by the Suppliers fitment network will be corrected by their fitment networks, even after the 12 month period has lapsed. Shatterprufe Lifetime 12 Months (Minimum requirement as per Santam agreement) NAG 1 Year 12 Months (Minimum requirement as per Santam agreement) Xinyi 3 Years 12 Months (Minimum requirement as per Santam agreement) Fuyao 12 Months 12 Months (Minimum requirement as per Santam agreement) 3

4 DKG 2 Years 2 Years USG 2 Years 12 Months (Minimum requirement as per Santam agreement) WHICH BONDING AGENTS ARE USED TO AFFIX THE GLASS TO VEHICLES WHEN FITTING SANTAM APPROVED PRODUCTS? Sika and Henkel, both OE approved, are used by Santam-approved glass outlets. WHAT IS THE DIFFERENCE BETWEEN LOCAL AND INTERNATIONAL STANDARDS? Each country develops its own standards and testing criteria, which in essence are more or less the same. HOW DOES SANTAM MANAGE COMPLIANCE WITH STANDARDS? All new glass manufacturer products/distribution agents must comply with a set of predefined Quality standards, specifically developed by Santam. The Quality review comprises various criteria that must be met e.g.: Legislative, Quality Standards, Good Corporate Governance, Social Responsibility and Service Standards. Compliance is measured through physical on-site evaluations, validation by means of VAT and ITC vetting, and checking of documentation. Permits or certificates are recorded in a schedule and expiry dates diarised and followed up to ensure that they are always valid. Compliance is further measured through physical Quality Evaluations: Operational Claims Evaluation process whereby the Santam evaluator compares the supplier s documentation, such as the authorised quote, invoices etc. with the final costing sheet, to verify audit trails, if correct part/material prices, mark ups on Nett part/material prices, labour, etc. have been correctly charged out to Santam; Technical Quality Evaluation process whereby the Santam evaluator inspects the repairs or replacement after completion to verify the quality of repairs and whether repairs were carried out as per the final costing sheet/quotation; and Work In Progress Evaluation process whereby the Santam representative performs random inspections, without prior notice, while the repairs are being carried out at the supplier s premises or risk address. HAS THERE BEEN ANY RECENT DEVELOPMENTS REGARDING THE SANS STANDARDS? 4

5 SANS10240:2005 (Applies to the actual fitment of windscreens) Santam has added a clause to the glass supplier agreements for franchises to attain SABS certification within 12 months as this standard had historically been neglected. This standard includes bonding agent specifications, which will thus be tested in terms of the certification process. SANS1191/1193 (Applies to the manufacturing of windscreens) All key role players have the opportunity to request changes to SANS specifications via their technical committees. No requests have been submitted to the SABS regarding aligning the SANS to OE requirements of safety glass. The SABS has been made aware of the recent questioning of the current standards and all role players will be approached in this regard. ARE ALL MOTOR-GLASS SOLD IN SOUTH AFRICA MANUFACTURED IN ACCORDANCE WITH OE STANDARDS? It is highly unlikely that one glass manufacturer manufactures glass for all OEs and for all motor vehicle types. Manufacturers of motor glass are awarded contracts for different vehicle types by specific OEs, both locally and internationally. These manufacturers produce after-market glass which complies with SANS and may or may not conform to OE requirements. WHICH OE MANUFACTURER CONTRACTS DOES THE SANTAM APPROVED PRODUCTS HOLD? Shatterprufe manufacture OE glass for certain brand models: e.g.; Volkswagen, Mazda, Mitsubishi, Toyota, Ford, Nissan, Isuzu, Mercedes Benz, Land Rover, Audi, Honda, MAN, Opel etc. Xinyi manufacture OE glass for certain brand models: e.g.; Ford, GM, Volkswagen and Chrysler etc. Fuyao manufacture OE glass for certain brand models: e.g.; Volkswagen, Mercedes Benz, Mazda, Mitsibishi, Toyota, Ford, Isuzu, Suzuki, Land Rover, Audi, Honda, Chrysler, GWM, Volvo, Kia, Daihatsu, Fiat, Cherry, Geely, Bentley and Hyundai, etc. DKG does not hold any OE manufacturer agreements. USG does not hold any OE manufacturer agreements. NAG does not hold any OE manufacturer agreements. Please note that these contracts change constantly and it is possible that some brands may have been added or removed, since researched. 5

6 HOW DOES THE FITMENT OF A NON-OE WINDSCREEN IMPACT ON THE CLIENT S OE MOTORPLAN OR WARRANTY? As a general rule, all motor related glass, i.e. side glass, windscreens etc., are excluded from OE Motorplans and does not influence the vehicle Motorplan or warranty terms and conditions. However, if there is doubt, Santam will act in accordance with the OE s requirements. WHAT LIABILITY INSURANCE COVER DOES THE SANTAM APPROVED PRODUCTS HAVE? Product: Shatterprufe NAG Xinyi Fuyao DKG USG Public / Product Liability: R50 million R20 million umbrella cover R10 million through Grandmark and 10 million USD through Xinyi in South Africa R20 million through Windscreen distributors and 300 million USD through Fuyao in South Africa R20 million umbrella through Commercial Auto Glass and 5million Chinese Yuan in South Africa R21 million through USG and R5 million through TIGA DOES THE FITMENT OF NON OE GLASS HAVE AN IMPACT ON THE CLIENT S BANKS HIRE PURCHASE (HP) AGREEMENT? As a general rule, all motor related glass, i.e. side glass, windscreens etc., are excluded from banks Hire Purchase agreements and does not influence the HP terms and conditions. However, if there is doubt, Santam will act in accordance with the banks agreements. ARE ANY OF THE SANTAM APPROVED GLASS PRODUCTS, OF AN INFERIOR QUALITY? No. All imported glass, approved by Santam, meets the exact same local standards as the locally produced glass. There is a perception that has been created in the South African market place by competitive brands as a marketing strategy that Chinese Glass is not shatterproof, Santam-approved Chinese glass not only complies with South African standards, but with global standards, such as ISO/TS 16949:2009 which is a specification for suppliers that supply OE quality products. 6

7 ARE ALL THE SANTAM APPROVED PRODUCTS SHATTERPROOF? Yes. A distinction needs to be made between Shatterprufe and Shatterproof. Quote: SHATTERPRUFE VS. SHATTERPROOF ¹ Shatterprufe is a trademark. Shatterproof is a safety characteristic which refers to laminating two pieces of glass to stop the glass from shattering into splinters, hence SHATTERPROOF. ALL car windscreens legally sold in South Africa are shatterproof. That means they all comply with the SABS standard which requires them to be resistant to penetration and disintegration by being manufactured with a laminated vinyl centre core. IS ARCHITECTURAL (BUILDING) GLASS USED BY OF THE SANTAM APPROVED PRODUCTS TO MANUFACTURE AUTOMOTIVE GLASS? No. All automotive glass is made for automotive needs. IS RE-PROCESSED/RE-CLAIMED/RECYCLED LAMINATE USED IN THE MANUFACTURING PROCESS OF ANY OF THE SANTAM APPROVED PRODUCTS? No. Virgin vinyl is used as the laminate. DOES THE SANTAM APPROVED SUPPLIERS SOURCED GLASS MANUFACTURERS, USE SUBSTANDARD RAW MATERIALS TO MANUFACTURE GLASS? No. The quality of raw materials used is reflected in the high quality products produced and the numerous international safety and quality standards. Please note: There is no standard on raw materials. So, one manufacturer can t claim they have a higher raw material standard than the competition. 7

8 IS GRANDMARK AND / OR TIGA LOCALLY OWNED? Yes. Both Grandmark and TIGA are registered South African companies. WILL THERE BE ANY LIABILITY FOR BROKERS IN TERMS OF THE CONSUMER PROTECTION ACT IF THE BROKER ADVICES HIS/HER CLIENT TO FIT THE GRANDMARK AND / OR TIGA SOURCED PRODUCTS? Neither a broker nor an insurer would be liable for damage, injury or other damages arising from a faulty fitment in terms of the Consumer Protection Act 68 of A policyholder could, however, hold an insurer (and not a broker) liable for such damage, injury or damages in terms of the insurance contract. The insurer would have recourse against the supplier or service provider in terms of their insurance contract. The broker will be providing advice to the client as a financial services provider. The service rendered by a broker does not fall within the service as defined within the Consumer Protection Act (CPA) 68 of 2008 which is stated to exclude advice that is subject to regulation in terms of the Financial Advisory and Intermediary Services Act 37 of