Billions Invested Under South Africa’s Auto Programme

South Africa’s Motor Industry Development Programme – set to be replaced by a new programme in 2013 – has facilitated more than R32-billion in investments since 2000, with R4-billion to be invested in 2011, Trade and Industry Minister Rob Davies said at the opening of the 2011 Johannesburg International Motor Show on Monday.

The motor industry is a substantial employer in South Africa, contributing at least 6 percent to the country’s goss domestic product and almost 12 percent to its total exports.

Despite the knock the industry took as a whole due to the global recession of 2008-09, with at least 20 000 jobs lost since 2008, many more still benefit from employment opportunities.

“An estimated 90,000 people are directly employed in automotive manufacturing, whilst about 200,000 are employed in retail and aftermarket,” Davies said.

New incentive programme

A new incentive programme, the Automotive Production and Development Programme (APDP), will come into effect in 2013, seeking to pick up where the MIDP leaves off by stimulating the expansion of local production to 1.2-million vehicles per annum by 2020.

Davies said the sector would also benefit from new preferential procurement regulations that come into effect on 7 December.

The regulations will empower the Department of Trade and Industry to designate industries where tenders should prescribe that only locally manufactured products will be considered, or that only locally manufactured products with a prescribed minimum local content threshold will be considered.

“Government is also embarking on a procurement effort in support of local production,” Davies said.

“In the automotive industry, we are looking at designating buses for local procurement, wherein we would seek for government and state agencies to buy locally manufactured buses. We may also include other categories of vehicles.”