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South Africa: Grant plan for motor industry publicised

Published date:
Monday, 12 April 2010

Guidelines for grants that will be available to vehicle and component manufacturers through the Automotive Investment Scheme (AIS), which forms part of the government's new Automotive Production and Development Programme (APDP), have been completed.

The scheme is meant to deepen the domestic automotive manufacturing industry.

The South African government has also proposed to the US government that it roll over the African Growth and Opportunity Act (Agoa) for "a reasonable period of time".

Trade and Industry Minister Rob Davies confirmed this last week at a function at which Ford announced it had doubled its investment in its South African operations to R3 billion.

Benefits available in terms of Agoa, a non-reciprocal gesture by the US aimed at liberalising trade and assisting growth and development in sub-Saharan countries through duty-free and quota-free access into the US for a broad range of products, are scheduled to end in 2015.

Davies said the South African government had suggested that a reasonable rollover period created more certainty. The US Congress will make the final decision on whether Agoa is rolled over and modified.

Davies said the work done on the AIS had been very important in facilitating automotive investments in South Africa. He said investments by BMW, Volkswagen and Ford totalled R9bn between last year and 2013 and would support at least 3 500 direct jobs in vehicle assembly.

"These investments will catalyse an estimated R4bn of investment by component manufacturers, sustaining a further 20 000 jobs during the same period."

The APDP will be implemented after the Motor Industry Development Programme expires in 2012.

Davies said the AIS provided a 20 percent allowance to qualifying investments, rising to 30 percent for manufacturers that reached higher levels of employment and local content, payable over the period of the investment.

He said it had made a budget request for the estimated cost of the AIS in the medium term and it had been accommodated.

Davies said the benefits of the government support for the industry was that South Africa had manufacturing capacity in the country that had huge linkages to other industries.

“ Latest AGOA Trade Data currently available on

Click here to view a sector profile of South Africa's bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.

Other regularly updated trade statistics on include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.

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