2008-09-23
The revised programme will have the following four key elements;
Tariffs: Stable, moderate tariffs will remain at 25% for light motor
vehicles and 20% for components from 2012.
Local
Assembly Allowance: This support will be in the
form of duty credits issued to vehicle assemblers based on 20 – 18% of the
value of light motor vehicles produced domestically from 2013.
Production
Incentive: From 2013 this support of 55-50% of
value added computed in simple terms as sales less raw materials, in the form
of a duty rebate credit, will replace the current export based scheme. Thus the
actual benefit will be 55% X value add X applicable duty rate in 2013.
Automotive
Investment Allowance: From 2009, this assistance
will replace the current Productive Asset Allowance and will be 20% of
qualifying investment paid over to participants over a three year period.
The new tariffs are meant to protect
continued local vehicle assembly. Besides having the huge
This support is effectively providing a
lower duty rate for local assemblers and should provide enough encouragement
for high volume vehicle production in line with the target of doubling
production.
The value-added support aims encourage increasing levels of local value addition along the automotive value chain with positive spin-offs for employment creation. The industry generates strong linkages with:
Input industries such as aluminium, chemicals, electronics, leather & textiles, plastics, steel, machinery and equipment,
Service industries such as engineering, logistics, tooling,
Others such as financial, wholesale &
retail, advertising.
More than 50 major automotive component suppliers are located in KZN, with 18 of them being secondary suppliers who provide individual components or raw materials to the manufacturers of components or sub-assemblies for the motor assembly plants.