Categorized | Supply Chain

dti’s APDP to boost local Automotive industry

Rob-Davies

The word ‘Game Changer’ has been abused, loosely used, misplaced. So, could the Department of Trade and Industry’s (dti’s) Automotive Production and Development Programme (APDP), which the Trade and Industry Minister, Robbie Davies, announced this year, fit the bill in 2016?

Players in the automotive industry, vehicle manufacturers and component manufacturers, are eager to witness how the proposed amendments will give them a competitive edge in a generally tough trading environment.

So far, the industry has lauded the lowering the barriers of entry to the automotive industry for potential new investors. The dti has proposed the reduction of the minimum volume of vehicles to be manufactured to 10,000 per annum, which will qualify manufacturers for a reduced volume assembly allowance (VAA) of 10% as well as a suitable capital incentive for the investment in capital equipment.

As of now, the impression is that the provisional APDP is biased towards vehicle manufacturers and leaves component manufacturers with a virtually short end of the stick. Hopefully, at the conclusion of ongoing discussions in April 2016, this matter would have been addressed, all parties will endorse it.

The industry will benefit immensely. Lowering the barriers of entry takes away the responsibility of the current original equipment manufacturers (OEMs) that are battling to manufacture 50,000 units. However, the grey area is that is whether the dti will reduce this VAA accordingly for production targets not met.

Automotive bodies is involved in discussions with the dti include National Association of Automobile Manufacturers of South Africa (NAAMSA), the National Association of Automotive Components and Allied Manufacturers (NAACAM) and the National Union of Metal Workers of South Africa (NUMSA).

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