DTI laucnhes Automotive Incentive Scheme

The Minister of Trade and Industry, Rob Davies approved this week an investment support programme called People-carrier Automotive Investment Scheme (P-AIS), a sub-component of the Automotive Incentive Scheme (AIS).

The P-AIS is designed to stimulate a growth path for the people carrier vehicles industry through investment in new and/or replacement models and components that will result in new or retention of employment and/or strengthen the automotive vehicles value chain. It is a critical component of the Industrial Policy Action Plan (IPAP).

In a statement released this week the department of trade and industry (DTI) said Projects that are eligible for this scheme are:
The Semi-knockdown Investments, which are assemblers of motor vehicles that are trimmed or untrimmed and painted but not fitted with engines, transmission assemblies, axles, radiators, suspension components or braking equipment. The grant percentage for these investments is 20% with an additional 5% (totaling 30%) for meeting certain economic benefit criteria;
Complete Knocked Down Investments, which comprise of motor vehicles where the floor panels, body sides or roof panels are not permanently attached to each other; the engine and transmission assemblies, axles, radiators, suspension components, steering mechanisms, braking or electrical equipment or instrumentation are not fitted to such floor pans or chassis frames; and the bodies/cabs are not fitted to floor pans or chassis frames. The grant percentage for these investments is 25% with an additional 10% (totaling 35%) for meeting the economic benefit criteria;
The DTI added that qualifiers will be Component Manufacturers that can prove that a contract is in place and/or a contract has been awarded and/or a letter of intent has been received for the manufacture of components to supply into the people-carrier manufacturer supply chain locally and/or internationally. These manufacturers should also be able to  prove that after this investment they will achieve at least 25% of total entity turnover or R10m annually by the end of the first full year of commercial production, as part of automotive (inclusive of people carrier and light motor vehicle) manufacturer supply chain locally and/or internationally. The grant percentage for component manufacturers is 20% with an additional 10% (totaling 30%) for meeting the economic benefit criteria.

The DTI added that there is also an additional benefit for component manufacturers in the form of a competitiveness improvement grant aimed at enhancing the competitiveness of component manufacturers. This is done through the improvement of processes, products, quality standards and related skills development through the use of business development services. This grant is linked to the cost sharing percentage that the component manufacturer is approved for.

The scheme is open for applications from 01 December 2012 and application forms are available on line on the dti website.

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