MINISTER DAVIES APPROVES GUIDELINES TO STIMULATE PRODUCTION OF MEDIUM AND HEAVY COMMERCIAL VEHICLES

MINISTER DAVIES APPROVES GUIDELINES TO STIMULATE PRODUCTION OF MEDIUM AND HEAVY COMMERCIAL VEHICLES

The Minister of Trade and Industry, Dr Rob Davies has approved the new Medium and Heavy Commercial Vehicles - Automotive Investment Scheme (MHCV-AIS) guidelines in order to stimulate investment in the production of medium and heavy commercial vehicles in South Africa. The MHCV-AIS is a sub-component of the Automotive Investment Scheme (AIS), an incentive designed to grow and develop the automotive sector in South Africa.

The MHCV-AIS made available to investment projects with a start of production date of 1 April 2014. The commissioning period for these projects may not exceed eighteen (18) months prior to start of production date.

“The broadening of the scope of the AIS to include medium and heavy commercial vehicle manufacturers is in line with the broader objectives of the AIS programme as well as vision 2020.  The medium and heavy commercial vehicles sector value chains are highly under-developed and there are opportunities to deepen their value addition and potential for employment creation,” says Minister Davies.

He adds that the extension of the programme to these manufacturers is required to achieve the developmental objectives which are set to increase market size, investment, deepening supply chain, technology transfer and to create and sustain jobs in the automotive sector.

The MHCV-AIS provides a non-taxable cash grant of twenty percent (20%) of the value of qualifying investment in productive assets by medium and heavy commercial vehicles manufacturers and twenty five percent (25%) of the value of qualifying investment in productive assets by component manufacturers and tooling companies for MHCVs as approved by the Department of Trade and Industry (the dti)

An additional non-taxable cash grant of five percent (5%) of the value of qualifying investment in productive assets may be available to projects that meet two (2) of the following economic benefit criteria:

•           Tooling;

•           Research and Development in South African-related to the project;

•           Employment Creation;

•           Strengthening the automotive supply chain;

•           Value-addition;

•           Empowerment.

“It is envisaged that these guidelines, whose main theme is to stimulate investment in the production of medium and heavy commercial vehicles, will result in increased support and will lead to growth and development of the automotive sector in South Africa,” says Minister Davies