Support for the automotive sector is set to increase says Rob Davies, Minister at the Department of Trade and Industry (dti.
Davies was speaking during the dti budget vote in Cape Town.
“Firstly, we see acceleration in the automotive sector, where the Automotive Production Development Programme (APDP) has already supported significant new investment in the sector. Projected capital expenditure for 2014 is anticipated to reach a record level of R7.9 billion.”
The work of the APDP has been acknowledged by big industry role players such as the National Association of Automobile Manufacturers of South Africa (Naamsa), who have largely attributed the relatively high levels of capital expenditure to this programme.
The APDP’s objective is to raise the volume of cars manufactured in South Africa to 1.2 million annually by 2020, as well as to diversify the component chain.
Adds Davies, “In the coming year, the APDP will undergo an early review.”
“[This] will make us take stock of efforts and determine what more can be achieved in growing the industry in South Africa.”
In other efforts to grow the sector, the Automotive Supply Chain Competitiveness Initiative (ASCCI) was launched last year to enhance localisation, production and supplier capabilities.
According to Davies this was proving to be a success, and his department will continue to expand the programme.
“Since the introduction of the Automotive Investment Scheme (AIS) in 2010/11, public sector-approved incentives amounted to R6.3 billion and supported investments worth R23 billion by original equipment manufacturers (OEMs) in the automotive sector.”
“The intention of the AIS is to grow and develop the automotive sector through investment in new and replacement models, as well as the manufacturing of automotive components. The objective here is to increase plant production volumes, sustain employment and strengthen the automotive value chain.”
“Given that automotives comprises 30% of our industrial sector, with strong linkages to other manufacturing sub-sectors, the impact of such investment on our domestic economy is significant.”
Concluding, “The country’s automotive sector employs in excess of 100 000 people and it is an important sector which we will continue to support.”
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