Programme to focus on motor industry

The new Automotive Production Development Programme (APDP)‚ which this year replaced the Motor Industry Development Programme (MIDP)‚ which was launched in 1995‚ will focus on value added in the production of vehicles and automotive components for export‚ the National Association of Automobile Manufacturers of SA (Naamsa) said on Wednesday.

This was in contrast to the MIDP‚ which incentivised exports of vehicles and components.

Cars travel on a main road in a traffic jam. Credit: REUTERS

The objective of the APDP is to grow SA’s vehicle production from about 550‚000 vehicles in 2012 to 1.2 million vehicles by 2020.

To realise this vision‚ Naamsa said a quantum improvement in the industry’s competitiveness – covering domestic component and vehicle manufacturing as well as distribution and logistics – would be required.

The key elements and provisions of the APDP include a 25% import duty through 2020 applicable to cars and light commercials and a 20% duty in respect of imported original equipment components; an assembly allowance of 20% declining to 18% over three years conditional on a minimum plant production volume of 50‚000 units per annum; an investment incentive for vehicle and component manufacturers of up to 30% in plant‚ equipment and other production related operations including research and development and to support incremental employment; and a production incentive to support domestic value addition. - I-Net Bridge