New truck, bus incentive framework focuses on localisation and jobs

29th August 2014

By: Irma Venter

Creamer Media Senior Deputy Editor

  

Font size: - +

It is clear that government’s proposed Medium and Heavy Commercial Vehicle Automotive Investment Scheme (MHCV-AIS) does not plan to incentivise the status quo, says National Association of Automobile Manufacturers of South Africa director Nico Vermeulen.

Truck assemblers currently pay no import duties if they practise semi-knockdown assembly (SKD, or partial assembly) of their vehicles locally.

The MHCV-AIS was released for comment in July this year.

Government’s current Auto- motive Production and Develop-ment Programme (APDP) has no truck and bus support programme, with these industries still operating largely under the programme preceding the APDP, the Motor Industry Development Programme, which expired in 2012.

Now, however, the MHCV-AIS aims to change this dispensation.

“We have commented on the scheme guidelines, and have had a meeting with the Department of Trade and Industry,” says Vermeulen.

He says the proposed scheme “clearly has two goals”.

The first is to encourage already established truck and bus assemblers to add value to their products, increase localisation and, through this practice, increase their labour contingent.

For truck and bus brands currently importing their products, the goal is to use incentives to move them to SKD assembly, says Vermeulen.

He says while APDP incentives for car and components manufacturers are, among other factors, driven by volume production, it appears that truck and bus assembly will be investment-incentive-driven, because of low-volume commercial vehicle production in South Africa.

It is currently proposed, under the published guidelines, that the MHCV-AIS will return 20% of the total value of their investments to relevant vehicle manufacturers and 25% to components and tooling companies.

“At this point, this is all we can say,” notes Vermeulen.

Truck brands such as Mercedes-Benz, MAN, Tata, Isuzu, Hino, Volvo and UD Trucks assemble vehicles in South Africa, with Hyundai and FAW having been added to the fold this year.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION