THE ROLE OF COMPETITION

The role competition plays on the automotive parts industry in the South African short-term insurance industry is significant. This book explores trends in both the South african and international markets in order to identify corresponding links between them. The characteristics of competition are explored to illustrate how the nature of competition affects social elements of our environment and how closed market forces create unattractive market conditions and barriers to entry within these markets. It is clear that most people are unaware of the benefits associated with aftermarket parts and have negative perceptions regarding the quality of these parts. It could be concluded that most people would use these parts if the quality and safety were certified by an independent agency. This book identifies the role competition plays in the parts industry and that competition would influence cost reduction for insurance claims, which involve these aftermarket parts as a component of the repair process. This benefit would reduce costs for insurance companies and as a result, reduce the cost of insurance.