Automotive Business Review February 2015 | Page 38

by Frank Beeton

M

oving
atters

Frank Beeton scans the transport world for news pertinent to the Logistics Sector.

who have decided, on economic grounds, to import their
cabs in built-up and finished condition. While the process
of assembling and trimming cabs is not unduly onerous,
requiring only relatively simple fixtures, the need to apply
adequate corrosion protection, which usually involves the
dip application of electrophoretic e-coat primer before
final painting, and is very necessary for vehicles destined
for our coastal areas, will require substantial up-front
investment.

More on the Truck
Investment Scheme

moving matters

Last October, we reported and commented on
the Department of Trade and Industry’s document
entitled “Programme Guidelines for the Medium
and Heavy Commercial Vehicles Automotive
Investment Scheme”, which was first published for
comment on July 1st, 2014.

Even with the incentives available, the relatively low sales
volumes available in the local truck market will make the
amortisation of such an investment a lengthy process,
particularly if the entire painting operation is ring-fenced
for MHCV products alone, as apparently required by this
programme.

S

ubsequently, on November 23rd, the Department
issued the approved version of the document, which
had been duly signed off by Minister Rob Davies.
After laying the two 27-page documents side-by-side for
comparison, we discovered two significant differences, in
that local assembly of truck cabs would become a nonnegotiable qualifier for participation in the scheme from 1st
April, 2016, and a provision which allowed bus and truck
body manufacturers to access incentives, provided that they
are part of the supply chain linked to medium and/or heavy
commercial vehicle original equipment manufacturers.
Other than the aforementioned, there were only some
detailed revisions which did not materially alter our original
reaction to the programme. In October, we said: “From our
perspective, it is important to understand, first off, that this
is not a local content programme, but only an incentive
for new investment in vehicle assembly or component
manufacture activities.
There are no additional penalties for manufacturers and
importers who elect to continue importing vehicles in CBU
condition. The decision to invest in local assembly remains,
therefore, completely voluntary, and can be made on
economic grounds.
The fact that both locally assembled and imported vehicles
currently compete in the South African market also suggests
that the present level of import duties imposed on the latter
are not unduly punitive.”
That position has not changed. The introduction of the cab
assembly qualifier is not likely to influence the attitude of
manufac