More global motor companies could announce plans to build vehicles in SA “within weeks” after a state decision to lower the barriers to domestic manufacture.Since the introduction of the Automotive Production and Development Programme (APDP) in 2013‚ manufacturers have had to build at least 50000 units annually to access volume assembly allowance benefits.
They currently receive import-duty credits worth 18% of the ex-factory price of all production.
From January the allowance will be offered on a sliding scale from 10% for 10000 units to 18% for 50000.
National Association of Automobile Manufacturers of SA director Nico Vermeulen said a number of firms were keen on building in SA.
Options include new standalone assembly plants‚ making use of spare capacity in existing plants and taking advantage of a proposed East London multibrand plant in which several companies would share costs.
SA has seven major producers of cars and light commercial vehicles – BMW‚ Ford‚ General Motors‚ Mercedes-Benz‚ Nissan‚ Toyota and Volkswagen – and a handful of low-volume truck and bus assemblers.
Low-volume manufacturers will also be able to claim the APDP’s automotive investment scheme‚ although the level of benefits will be finalised only early next year.
As things stand‚ qualifying manufacturers can claim back up to 30% of new production-related investments.
Hyundai and Peugeot had earlier expressed interest in South African car assembly‚ along with Indian and Chinese brands.
Instead‚ both invested in Nigeria‚ where investment costs are lower.
Stanley Anderson‚ marketing director of Hyundai Automotive SA‚ which already has a small-volume truck assembly plant in SA‚ said it was too early to say if the changes would make a difference to Hyundai‚ but observed: “It is a very positive step” that could prompt vehicle importers to investigate local manufacturing. Peugeot-Citroen SA managing director Francis Harnie said: “We are looking for opportunities to grow our manufacturing footprint in Africa.
“Having decided previously that the barriers to entry in SA were too high at 50000‚ it is worth looking at again.
“I am glad the government has taken account of other opinions.
“I expect that a specialist from France will come here in the next few weeks to see what manufacturing opportunities there are for Peugeot.”
These could include export of platinum-based catalytic converters‚ after the Department of Trade and Industry said their production incentive would be frozen at 65% of value.
The policy changes‚ announced at the weekend by the department‚ are the result of an APDP review.
Trade and Industry Minister Rob Davies said support would continue after the programme expired in 2020.
“Government remains committed to further development of the automotive industry‚” he said.
The state conceded that some APDP ambitions – such as the goal of building 1.2-million vehicles annually by 2020 – were unachievable. This year‚ the forecast number is 622000.
There are also doubts whether the APDP can significantly increase local‚ particularly black‚ involvement in the components-supply industry.
Most components built into domestically assembled vehicles are imported and almost all major suppliers are foreign-owned.
Although there are some added incentives for the supply sector‚ Ken Manners‚ president of the National Association of Automotive Component and Allied Manufacturers, expressed disappointment that the review “did not yield more meaningful requirements for local manufacture of components and subassemblies”. — BDLive
Policy shift boosts vehicle sector
Since the introduction of the Automotive Production and Development Programme (APDP) in 2013‚ manufacturers have had to build at least 50000 units annually to access volume assembly allowance benefits.
They currently receive import-duty credits worth 18% of the ex-factory price of all production.
From January the allowance will be offered on a sliding scale from 10% for 10000 units to 18% for 50000.
National Association of Automobile Manufacturers of SA director Nico Vermeulen said a number of firms were keen on building in SA.
Options include new standalone assembly plants‚ making use of spare capacity in existing plants and taking advantage of a proposed East London multibrand plant in which several companies would share costs.
SA has seven major producers of cars and light commercial vehicles – BMW‚ Ford‚ General Motors‚ Mercedes-Benz‚ Nissan‚ Toyota and Volkswagen – and a handful of low-volume truck and bus assemblers.
Low-volume manufacturers will also be able to claim the APDP’s automotive investment scheme‚ although the level of benefits will be finalised only early next year.
As things stand‚ qualifying manufacturers can claim back up to 30% of new production-related investments.
Hyundai and Peugeot had earlier expressed interest in South African car assembly‚ along with Indian and Chinese brands.
Instead‚ both invested in Nigeria‚ where investment costs are lower.
Stanley Anderson‚ marketing director of Hyundai Automotive SA‚ which already has a small-volume truck assembly plant in SA‚ said it was too early to say if the changes would make a difference to Hyundai‚ but observed: “It is a very positive step” that could prompt vehicle importers to investigate local manufacturing. Peugeot-Citroen SA managing director Francis Harnie said: “We are looking for opportunities to grow our manufacturing footprint in Africa.
“Having decided previously that the barriers to entry in SA were too high at 50000‚ it is worth looking at again.
“I am glad the government has taken account of other opinions.
“I expect that a specialist from France will come here in the next few weeks to see what manufacturing opportunities there are for Peugeot.”
These could include export of platinum-based catalytic converters‚ after the Department of Trade and Industry said their production incentive would be frozen at 65% of value.
The policy changes‚ announced at the weekend by the department‚ are the result of an APDP review.
Trade and Industry Minister Rob Davies said support would continue after the programme expired in 2020.
“Government remains committed to further development of the automotive industry‚” he said.
The state conceded that some APDP ambitions – such as the goal of building 1.2-million vehicles annually by 2020 – were unachievable. This year‚ the forecast number is 622000.
There are also doubts whether the APDP can significantly increase local‚ particularly black‚ involvement in the components-supply industry.
Most components built into domestically assembled vehicles are imported and almost all major suppliers are foreign-owned.
Although there are some added incentives for the supply sector‚ Ken Manners‚ president of the National Association of Automotive Component and Allied Manufacturers, expressed disappointment that the review “did not yield more meaningful requirements for local manufacture of components and subassemblies”. — BDLive
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