Nico Vermeulen, director of the National Association of Automobile Manufacturers of South Africa, said Euro 5 quality fuel was absolutely essential to enable manufacturers to supply the latest highly fuel efficient environmentally friendly vehicles to the South African market and cleaner fuels in the country were long overdue.
“It should have come in 2017. It is now only likely to happen, if it happens, in 2021/22,” he said at a briefing on Thursday on the economic and socio-economic benefits of South Africa’s automotive industry.
Vermeulen said other threats included a slowdown in global markets, volatile currency movements, competition from the fast growing automotive industries in some emerging markets, the development of other African automotive industries, the rising cost of labour and electricity, the high cost and low efficiency of logistics, the security and stability of electricity supply and the unstable labour environment.
He said if the government wanted to grow vehicle sales, it would get more if they reviewed or perhaps reduced tax burden on consumers. Contribution to the fiscus by an entry level vehicle was 18.5 percent and for a premium and expensive vehicle it was as much as 45 percent.
Thomas Schäfer, the chairperson and managing director of Volkswagen South Africa, said incentives for the motor industry, including the automotive incentive scheme, were absolutely fundamental for future investment in South Africa’s automotive industry.