Suzuki Auto SA and Tibane Motor Transfer disagree on empowerment deal

A logo of a Suzuki truck. Photo: Reuters

A logo of a Suzuki truck. Photo: Reuters

Published May 2, 2024


Suzuki Auto S’s relationship with Tibane Mobile Transfer (TMT) has soured after the former enterprise development partner said the motor vehicle importer had reneged on their business arrangements without notice.

TMS Group CEO David Sithole said in a letter that a good working relationship had built between the two companies after TMT was introduced to Suzuki Auto SA by the Nelson Mandela Foundation around 2016, and TMT provided driver services to collect and return Suzuki cars that had been loaned out to The Nelson Mandela Foundation for their projects.

This eventually led to TMT becoming Suzuki’s Enterprise Development for their BBBEE scorecard. Sithole said the Enterprise Development programme contract started in 2022/2023 financial year, and was to run for 3 consecutive financial years, but renewed every year, based on the net profit made by Suzuki Auto SA.

The programme centred around Suzuki doing pre-Delivery inspections on Suzuki vehicles sold to corporate, government and car rental customers, registering, licensing and delivering the vehicles sold to these customers, and also supplying parts and panels to these clients.

“The first year of the contract their contribution to us was the rent payment of the facilities for a year (we signed a five-year lease), the purchasing of equipment and tools, mentoring and a payment of a deposit to Suzuki Auto SA, so that TMT could have a Suzuki parts account.”

When the second year started, Suzuki Auto SA again paid for one years’ rent. TMT also invested to upscale the facility in anticipation of work coming from Suzuki Auto SA.

“Unfortunately, Suzuki Auto SA reneged on our partnership without providing any explanation and the work suddenly ceased without any prior warning or advice. They ceased to bring any of the abovementioned work as undertaken, and this led to us bleeding money as we had employed staff and had monthly overheads we needed to meet, with no income,” said Sithole.

When questioned by Business Report, Suzuki Auto SA said Tibane Mobile Services (TMS) had an Enterprise Development Agreement with them that expired on February 29, 2024, an agreement that covered a period of one year to 12 months.

“Suzuki Auto SA delivered on all of its contractual responsibilities in terms of this agreement…There was no premature termination of the agreement,” the company said.

Suzuki Auto SA said it had changed its business operations due to the changing market environment and, therefore, the services that TMS provided were no longer required.

“Suzuki Auto SA did offer Tibane Mobile Services further Enterprise Development support for a third consecutive year in terms of a proposed further one-year agreement. Regrettably, this offer was rejected and was not accepted by Tibane Mobile Services,” the company said.

Sithole said they had requested meetings with Suzuki Auto SA to get an explanation for the cessation of business.

“They kept on postponing the meetings and cancelling at the last minute. Until we got an email from Suzuki Auto SA HR department on the 26th of October 2023, requesting us to amend the enterprise development agreement to a supplier development agreement. This did not sit well with us and without a valid explanation we were not comfortable to amend the contract… we sat on the 7th of December 2023 and in that meeting the responses we got from Suzuki Auto Management were not satisfactory on the reason why they stopped sending work to us,” Sithole said.

He said since then Suzuki Auto SA had “initiated their attorneys on us” and things had been going to and from between the parties with no proper resolution in sight.

Suzuki Auto SA said it has several BEE partners ranging from retail dealership partners to service providers, and the company has a Level 7 BEE ranking.

Sithole said the “least that Suzuki SA can do is to put us back to the positive financial position we were in prior to their empty promises”.