Component suppliers, worried about lower government export incentives due from 2013, have been reassured that there will be a ‘transitional support period’, according to media reports in Johannesburg.
Speaking to reporters at this week’s Car Conference coinciding with the Johannesburg motor show, Nimrod Zalk, Department of Trade and Industry deputy director-general, said the support package was “close to being wrapped up.”
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South Africa’s Automotive Production Development Programme (APDP) is due to replace the long-standing and very successful Motor Industry Development Programme (MIDP) in 2013. The MIDP has helped steer SA’s automotive exports to ZAR69.5bn (US$8.8bn) last year from just ZAR4.2bn in 1995.
Support in the form of duty credits or similar would continue for a couple of years, said Zalk, but in return component suppliers – especially those in what are seen as vulnerable sectors such as leather and catalytic converters – would be expected to raise their competitiveness.
“We don’t want to see sectors that are no more competitive three years from the start of the APDP than they are now. We want commitments from these manufacturers,” told Engineering News Online.
One of the commitments DTI would like to see, he said, was that the ceramic wafer inside a catalytic converter was produced locally, and no longer imported, and then simply coated and canned.
“We want to see investment in substrate manufacturing in South Africa,” Zalk told the online newspaper.
