Moving Matters
by Frank Beeton
Truck
Investment
Scheme
Emerges
– At Last!
Will the MHCV-AIS bring more truck assembly operations to South Africa?
On July 1st, 2014, the Department
decessor concentrated on improving
levels that prevailed under that regime
of Trade and Industry published
the international competitiveness of the
for medium/heavy vehicles, i.e. 20%
local vehicle manufacturing industry.
for Completely Built Up (CBU) vehicles,
a document entitled “Programme
The APDP is a voluntary participation
zero duty for Completely Knocked Down
Guidelines for the Medium and
programme, made up of four main
(CKD) components (including Semi-
Heavy Commercial Vehicles
elements, i.e. Import Duty, a Volume
Knocked-Down vehicles) and 15% for
Assembly
Imported Medium/Heavy Commercial
Automotive Investment Scheme”.
Comments, by interested parties,
on this 27-page MHCV-AIS
Incentive,
Allowance,
and
the
a
Production
Automotive
Investment Scheme.
Vehicle tyres, were continued.
The newly-announced MHCV-AIS is a
background sketched below.
H
owever, it was notable that
no public domain comment
on the document was evident
until
August
18th,
when Irma Venter of Engineering News
Automotive Investment Scheme, and is
intended to grow and develop the auto-
and 20% respectively, defined duty-free
motive sector volumes, employment
import credits for local assemblers
and value chain through investment in
new and/or replacement models and
consumption and export, additional
ridiculously short time, given the
sub-component of the abovementioned
the fixing of import duties on vehicles
of vehicles destined for both local
by 22nd July, which seemed a
The most important provisions include
and components at levels of 25%
document were to be submitted
components.
duty-free import credits based on the
margin of local value added, and a
minimum qualification level of 50 000
units per annum for participation by
registered vehicle manufacturers.
Although
somewhat
lengthy,
the
essence of the MHCV-AIS provisions
include the refund, by non-taxable cash
grant, of 20% of the value of qualifying investments made by commercial
reported on a brief interview with
However, the APDP was applicable only
vehicle manufacturers in productive
National Association of Automobile
to light motor vehicles, effectively those
assets, or 25% of equivalent invest-
Manufacturers
with Gross Vehicle Mass ratings not
ments by component manufacturers
exceeding 3 500 kg. The only provision
and tooling companies, both over a
that was specifically applicable to heavi-
three-year period.
of
South
Africa
(NAAMSA) director Nico Vermeulen.
By way of background, it will be
remembered that, on January 1st,
2013, the Automotive Production and
Development Programme (APDP) took
effect, replacing the Motor Industry
Development Programme (MIDP) that
had run since September, 1995. This
new programme was intended to place
er vehicles with GVM ratings in excess
of 3½ tons (i.e Medium, Heavy and
Extra-Heavy Commercial Vehicles and
Buses) was that allowing component
manufacturers to claim a production
incentive on local parts manufactured
for these vehicle categories.
Additional 5% and 10% cash grants
are also to be available if participants
are able to demonstrate required levels of employment continuity and the
advancement of local industry capacity.
Qualifiers for the additional discretionary grants include increases in produc-
a greater emphasis on volume and
Even though the MIDP had been officially
ti ۈ