South African truck assemblers are currently operating without an official incentive scheme to reward and stimulate local production, as government’s Motor Industry Development Programme (MIDP) officially ended in 2012.
One of the challenges for 2013 is for the truck and bus portion of the new Automotive Production and Development Programme (APDP) to be gazetted ,“so we can take action around it – we were hoping to have the new legislation in place by the end of 2012”, says UD Trucks Southern Africa (UDTSA) corporate planning and marketing GM Rory Schulz.
He adds, however, that the MIDP benefits remain in place until work on the new truck programme has been wrapped up.
“To my knowledge, [the new APDP truck programme] is lying with one of the Ministers to be signed off.”
UDTSA assembles trucks at its Rosslyn facility, outside Pretoria.
Schulz says incentives under the truck programme appear similar in nature to APDP passenger car incentives. One portion of the truck programme’s incentives will be taxable grants to develop and assemble as many trucks locally as possible.
Currently, under the MIDP, trucks that are imported as semi-knocked-down (SKD) vehicles and assembled locally are subject to a 20% duty that is fully rebated – which, in essence, means local assembly is a zero-duty game.
However, notes Schulz, under the APDP, this will change, as the definition of SKD will be amended, demanding more local manufacture and input before trucks can be imported duty free.
“If you assemble here, you would need to add certain elements to become duty neutral,” says Schulz.