The MIDP will be replaced by a new programme – the Automotive Production and Development Programme (APDP) – in 2013.
“Still under MIDP, a total investment of at least R4 billion is to be made during 2011, whilst more than R32 billion has been cumulatively invested since year 2000,” said Davies at the launch of the Johannesburg International Motor Show on Monday night.
The motor industry is a substantial employer in South Africa, contributing at least 6 percent to the country’s Gross Domestic Product, and the sector exports constituting almost 12 percent of total exports. Despite the knock the industry took as a whole due to the recession, 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,” explained Davies.
The APDP aims to pick up where the MIDP will leave off by stimulating the expansion of automotive vehicle production to 1.2 million vehicles per annum in 2020.
Davies said the sector will benefit with the new preferential procurement regulations that come into effect on 7 December. The regulations will empower the Trade and Industry Department to designate specific industries where tenders should prescribe that only locally manufactured products will be considered or that only locally manufactured products with a prescribed minimum threshold for local content will be considered.
“Government is also embarking on a procurement effort in support of local production. 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,” said Davies. – BuaNews