Government’s proposed Medium and Heavy Commercial Vehicle Automotive Investment Scheme (MHCV-AIS) is unlikely to have any real impact on Isuzu Trucks South Africa’s automotive assembly business, as the monetary benefits of the incentive would be too insignificant to make a real difference to the company’s efficiencies, COO Craig Uren said on Monday.

After noting that he had last week met with the Department of Trade and Industry, he told the media during a visit to the company’s Port Elizabeth-based plant that, as an existing manufacturer, there was little advantage to partaking in the scheme.

“We’re already there; we’ve already invested [the amounts offered by the incentive]. A R20-million to R30-million investment is not what we need, as it might add a few jobs, but will have little downstream benefit, which is where the industry really needs it,” he asserted.

Released for comment in July, Engineering News Online reported last month that MHCV-AIS would provide a support programme for the truck and bus industries, which still operated largely under the Motor Industry Development Programme, which expired in 2012 and which was replaced by the Automotive Production and Development Programme.

The MHCV-AIS, however, aimed to change this dispensation and encourage established truck and bus assemblers to add value to their products, increase localisation and increase their labour contingent.

“For truck and bus brands currently importing their products, the goal is to use incentives to move them to semi-knockdown assembly,” National Association of Automobile Manufacturers of South Africa director Nico Vermeulen told Engineering News Online at the time.

Meanwhile, anticipating market growth of only 3% in the coming year, Uren said that, while the South African industry remained beset by challenges, automotive manufacturers would do well to accept market realities and adapt their strategies accordingly, rather than wait for a swing in fundamentals.

“At the end of the day, the 2014 variables are the same as those seen last year. We need to accept that these are the [realities] and that we’re in a pretty constant volatile environment,” he noted.

Uren also told journalists that a R170-million injection into the company’s assembly plant, in Port Elizabeth, had resulted in “radical” changes and had boosted the facility’s output capacity from 13 units a day to 20 units a day – or 4 500 vehicles a year – despite no change in the plant’s 110-strong labour force.

Isuzu assembles the N-series, F-series and FX-series trucks at the 44 000 m² facility from components imported from Japan.

“Without [the help of] incentives and programmes, Isuzu South Africa is becoming globally competitive. We’re doing it off our own bat,” he enthused, adding that capacity at the plant was likely to increase in future.

Uren added that the plant’s location adjacent to the Port Elizabeth harbour allowed the group to ship completed vehicles into regions it viewed as key growth nodes.

Isuzu’s market in Africa grew to 25 000 trucks in 2013, with 10 524 sold into Egypt, 4 598 in Algeria, 3 080 in Kenya and 4 019 in South Africa.

Sales of medium commercial vehicles by Isuzu South Africa so far this year were slightly behind the volumes seen last year, but Uren expected these to recover somewhat by December.

“The light heavy commercial vehicle market, meanwhile, is very grouped and heavy, and is largely dictated by replacements, so it’s quite easy to plan for. Further, the extra-heavy commercial vehicle market remains demand-driven,” he noted.

Meanwhile, the global Isuzu Motors group, which increased its vehicle shipment volumes from 598 000 units in 2011 to 829 000 units in 2014, aimed to grow this to one-million units by 2016.

Similarly, the automotive manufacturer looked to grow its output of diesel engines from 1.27-million units in 2014 to 1.5-million.

Isuzu Trucks South Africa was currently the title sponsor of the four-day, 357 km Port Elizabeth to Plettenberg Bay mountain biking challenge, the proceeds of which would assist the Diepsloot Mountain Biking academy.

“Isuzu Truck South Africa looks forward to a potentially prosperous relationship with the race, which is [held] yearly and in opposite directions,” the company said in a statement.