Cheaper quality alternatives from countries like China are posing a threat to the survival of South Africa’s automobile industry. With the escalating cost of production, local manufacturers do not just have the wherewithal to compete.
For this reason, the Department of Trade and Industry (the dti) has boosted the competitiveness of the country’s automobile sector by approving the newly-revised guidelines for the Automotive Investment Scheme (AIS) and the People-carrier Automotive Investment Scheme (P-AIS).
The guidelines were developed to help maintain and stabilise automotive suppliers as the economic crisis post-2009 placed a strain on companies’ expansion plans.
Under the amended AIS guidelines, tooling companies are eligible to apply for the same benefits as component manufacturers. Besides, companies are eligible for a non-taxable grant.
The amended guidelines also provide relaxed and more inclusive requirements for strengthening the supply chain criteria, the introduction of support towards enterprise level competitiveness improvement costs for component manufacturers, and accelerated grant disbursements for component manufactures on a 40:30:30 split are also new provisions included in the guidelines.
The guidelines do not leave no stone unturned, said DTI’s Minister, Robbie Davies.
“Empowerment is now included as part of the economic benefit criteria and a clearer description of Research and Development requirements has been provided. The guidelines also make provision for increased support for component manufacturers with the grant increasing to between 25% and 35% of the value of qualifying investment in productive assets approved by the dti.”