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According to Trade and Industry Minister Dr Rob Davies the so-called auto masterplan aims to bolster competitiveness and expand vehicle production in South Africa to 1% of global output. The plan is likely to be adopted in December.

Rob DaviesThis initiative aims to increase the local content of assembled cars to 60% by 2035 from around 38% currently, and will come into effect in 2021. Reuters reports that Davies does not want to divulge details of the new plan before it goes before cabinet, but said it would be anchored on the existing auto sector incentive package that ends in 2020.

The current incentive package, named the Automotive Production and Development Programme, rewards increased motor vehicle output and refunds import duties based on the amount of local modifications carried out on vehicles. “So that we are not just a footloose place where assembly can take place for the short term, but where there is an ecosystem that is grown in and around the auto sector,” Davies told Reuters in an interview.

B&M Analysts, a research consultancy which worked on the new incentive plan, said increasing local content in South African-built cars to 60% could add around R135-billion ($10-billion) in the domestic auto sector, Reuters reported.

Image credit: https://www.thedti.gov.za/about_dti/minister.jsp

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