Johannesburg - South Africa is 15 years behind the rest of the world when it comes to fuel standards and quality, which is one of the threats facing the country’s automotive industry.
This according to National Association of Automobile Manufacturers of South Africa director Nico Vermeulen, who said at a briefing on Thursday on the economic and socio-economic benefits of South Africa’s automotive industry that Euro 5 quality fuel was absolutely essential to enable manufacturers to supply the latest highly fuel-efficient and environmentally friendly vehicles to the South African market and cleaner fuels in the country were long overdue.
“It should have come in 2017," he said. "It is now only likely to happen, if it happens, in 2021/22.”
Threats
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 should review or perhaps reduce the 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, he said.
Volkswagen South Africa chairman and managing director Thomas Schäfer said incentives for the motor industry, including the automotive incentive scheme, were absolutely fundamental for future investment in South Africa’s automotive industry.