Johannesburg - South Africa is in talks with five vehicle manufacturers about a proposed new assembly plant in the port city of East London, a potential boost for an industry that’s using government incentives to attract investment from companies including Ford Motor and BMW.
East London IDZ, which operates an industrial park, is seeking to sign three producers within a year to assemble vehicles in a shared facility, Tembela Zweni, the state company’s executive manager for zone development, said in an interview in the city on South Africa’s southern coast. Interest in the site from international companies has increased since South Africa announced last year it will extend its automotive-incentive program, which encourages vehicle production in the country through tax breaks, he said.
“Suddenly we are getting more interest from companies,” Zweni said. “They will save on start-up costs because we would have this huge facility.”
South Africa set up the East London IDZ in 2002 to boost investment and create jobs in an economy that’s grappling with an unemployment rate of about 25 percent. The vehicle production threshold for benefiting from government incentives has been lowered to 10 000 units a year from 50 000 and support for the industry will be extended beyond 2020, the Department of Trade and Industry said in November.