http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.55Change: 0.00
R/$ = 12.17Change: -0.01
Au 1174.28 $/ozChange: -0.23
Pt 1083.50 $/ozChange: 4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Oct 11, 2012

Auto component production not sufficiently incentivised – Naacam

Back
Port|Port Elizabeth|Africa|Components|Export|System|Africa|South Africa|Automotive|Local Component Manufacturing Sector|Manufacturing|Roger Pitot
Port||Africa|Components|Export|System|Africa||Automotive|Manufacturing|
port|port-elizabeth|africa-company|components|export|system|africa|south-africa|automotive|local-component-manufacturing-sector|manufacturing|roger-pitot
© Reuse this



The incentive structure of the new Automotive Production and Development Programme (APDP) did not do enough to motivate vehicle manufacturers (OEMs) to increase the percentage of locally produced components they use on vehicles rolling off their assembly lines, said National Association of Automotive Component and Allied Manufacturers (Naacam) executive director Roger Pitot on Thursday.

Speaking at the South African Automotive Week, held in Port Elizabeth, Pitot said the APDP retained the duty-offset system of the Motor Industry Development Programme (MIDP) it would replace in 2013, whereby OEMs cash in their benefits by importing vehicles and components at lower duty rates, thereby providing little or no protection to component makers in South Africa as there was “effectively no import duty paid on components”.

“The APDP is still a duty rebate system. So, the more OEMs export and add value, the more they can also import,” said Pitot.

He noted that high enough vehicle exports – such as 80% of vehicle production from a plant - could ensure that OEMs could import all their component requirements duty-free.

Why would they then source their components locally, asked Pitot.

He added that OEMs had, from 2009 to 2011, imported R108-billion worth of components and subcomponents, while duties paid on these were R446-million, or 0.41%, compared with the R21-billion, or 20% which would have applied without the MIDP duty rebate.

Pitot also emphasised, however, that Naacam regarded the APDP’s production incentive, which rewarded local value addition, as a positive opportunity for the local component manufacturing sector.

He said real local content on locally produced vehicles was around 35% compared with the 55% to 60% often quoted, as the imported content of locally made parts had to be substracted first.

“The correct way is to measure the total component cost, less [the value of] all imports of components, subcomponents and materials,” he said.

“Many tier-one [component] suppliers still import substantial amounts of materials and subcomponents.”

Pitot said a bigger production incentive under the APDP would assist in curbing this trend. It would also promote the expansion of “sunrise type” of component industries in South Africa, seeing to the increased production of parts currently not flourishing under the MIDP’s incentive structure.

“Naacam believes the Department of Trade and Industry must relook the APDP mechanisms as soon as possible to ensure it’s an appropriate framework for industry and government to meet its objectives, namely doubling vehicle production volumes and substantially increasing local content,” he added.

When discussing general barriers to global competitiveness, Pitot noted that vehicle volume production were still low in South Africa, which constrained component manufacturers’ ability to achieve OEM demands for real cost savings.

Pitot noted that production of 100 000 units a year allowed for a far greater competitive advantage than 50 000 units a year.

“Monopolistic costs”, such as electricity tariffs, were also pushing up costs, while wage increases were not matched by productivity improvements.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Components News
Ashok Thakur
India’s largest utility vehicle and tractor producer, Mahindra & Mahindra, has established a new business unit specifically focussed on emerging opportunities in Africa. The African business unit will be headed by current Mahindra South Africa (MSA) CEO Ashok Thakur,...
Mahindra South Africa (MSA) hopes to see between 20% and 25% growth in sales in the current financial year compared with the previous financial year, “this despite the local market declining”, says CEO Ashok Thakur. MSA sold around 4 000 units in the previous...
MEASURING DEVICES Bosch has released a mobile app that enables the measurements made with measuring devices to be sent and used directly on the app for accuracy and on-site quoting
Industrial tool manufacturer Bosch has increased the compatibility of many batteries in its range of blue industrial power tools and has released mobile-device applications (apps) for users of the tools, says Bosch South Africa training manager Peter du Bruyn. Many...
More
 
 
Latest News
Updated 7 hours ago Gauteng Premier David Makhura recommitted the provincial government’s support to the revival of Gauteng’s manufacturing base, telling the second yearly Manufacturing Indaba on Tuesday that policymakers would drive legislation that created an environment in which the...
The Competition Commission has reached a settlement agreement with Japanese shipping liner Nippon Yusen Kabushiki Kaisha (NYK) for contravening the Competition Act in the transportation of motor vehicles to and from South Africa by sea. This settlement followed the...
State-owned aerospace and defence technology conglomerate Denel on Tuesday launched a book to demystify defence technology to South African learners and attract them to the defence industry’s career opportunities, while creating greater awareness about innovation and...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
JSE-listed Afrimat will make a cash offer to acquire the entire remaining issued share capital of subsidiary Infrasors that it does not already own.
TEAMWORK Aggreko Europe, Middle East & Africa MD David Taylor-Smith; Aggreko Zambia chairperson Dr. Sixtus Mulenga; Aggreko Africa MD James Shepherd
Temporary power generation services provider Aggreko announced earlier this month that it had appointed Dr Sixtus Mulenga as nonexecutive chairperson of Aggreko Zambia, a move it believed was integral to the ongoing expansion of its operations in Zambia and the rest...
Major global aircraft manufacturer Airbus Commercial Aircraft is maintaining a steady course. "I don't have any big news, good or bad," company President and CEO Fabrice Brégier told international aviation journalists in Toulouse, France, at the company’s recent...
MEASURING DEVICES Bosch has released a mobile app that enables the measurements made with measuring devices to be sent and used directly on the app for accuracy and on-site quoting
Industrial tool manufacturer Bosch has increased the compatibility of many batteries in its range of blue industrial power tools and has released mobile-device applications (apps) for users of the tools, says Bosch South Africa training manager Peter du Bruyn. Many...
The new Nissan Navara has been launched onto the global market, but Nissan South Africa (NSA) will only know in August whether the local Rosslyn plant will assemble the one-ton pickup. The NSA plant currently produces the old NP300 Hardbody one-ton bakkie, as well as...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96