SOUTH AFRICA’S AUTOMOTIVE ENVIRONMENT

EDD mandate and oversight The Economic Development Department was established in 2009. It has assumed responsibilities for the creation of decent employment through inclusive growth including implementing the National Development Plan, the New Growth Path, IPAP, APAP and the National Infrastructure Plan.

EDD mandate and oversight EDD’s mandate includes oversight of the following legislation: the Industrial Development Corporation Act the Competition Act the International Trade Administration Act the Infrastructure Development act

IDC Investment Over the last 5 financial years IDC’s net approvals were R3.6bn to 51 companies in the automotive sector This created and saved 12,660 jobs over the same period of time

Role of ITAC ITAC administers the APDP which is the dti’s incentive scheme that supports domestic manufacturers of automotive products. The support is mainly in the form of customs duties and rebates. Tariffs – domestic assemblers of vehicles enjoy customs duty of: 25% on fully built up vehicles 20% on imported automotive components.

Role of ITAC cont Rebate credits issued to automotive manufacturers from 1 April 2009 to 31 March 2015 in Rand Billion 2009 to 2010 2010 to 2011 2011 to 2012 2012 to 2013 2013 to 2014 2014 to 2015 R2,8 R21,6 R27 R 25 R 34,2 R9,2 

Role of ITAC cont Tariff amendments were made to support the automotive industry including: 2010/2011 ITAC reduced the customs duty on pistons for motor vehicle engines from 20% to free of duty 2012/2013 reducing customs duty on hydraulic brake fluid from 10% to free to duty 2013/2014 reducing the customs duty on CV joints from 20% to free of duty ITAC finalised or amended rebates to support the automotive industry including: 2010/2011 ITAC finalised a rebate for the duty on insulated electrical cables used for manufacture of automotive wiring harnesses 2012/2013 ITAC finalised the creation of rebate 317.03 where APDP-Automotive manufacturers have to register under this rebate item to participate under the programme

ITAC Import and Export Control Control of vehicles. Import permits issued in the following circumstances for used or second hand cars: Immigrants importing their private passenger vehicle Returning SA residents and nationals Physically disabled requiring special vehicles Vintage and collectors passenger vehicles Racing cars by a licenced racing driver Can import with a permit Specially designed vehicles e.g. mobile cranes where there is a similar or local substitute Used components and spare parts for taxi and agricultural industries (limited) Enforcement

Role of Competition Commission Competition Commission received information of a wide spread collusion by manufacturers of automotive components. It in is the process of initiating an investigation in respect of each automotive component that was subjected to collusion as per the evidence in its possession. Information indicates 121 automotive components have been subject to collusion by manufacturers of automotive components. The Commission has launched investigation in respect of 85 components and in the process of finalising launching investigation in respect of the outstanding components. Investigation into two panel beaters (Precision & Sons and Eldan Auto Body) that colluded on auto body repairs or panel beating work they were getting from insurance companies The firms were raided in 2014 and evidence of collusion was seized The investigation was finalised and referred to the Tribunal for consideration at the end of May 2015

Policy Developments Electric Vehicles and “Green” Production Finalization of SA EV Roadmap: multi-departmental approach Framework is based on two main pillars; Creating an environment in which electric vehicles can be operated on the South African roads; and Supporting the development and production of electric vehicles and relevant EV components. Supporting emerging regional production locations Other SSA countries looking to kick-start nascent auto industry Assembly in such countries present opportunity for SA supply chain in the short-medium term Medium Heavy Commercial Vehicle (MHCV) segment Significant MHCV opportunity: Encourage higher levels of localization e.g. through Preferential Procurement Support increased levels of R&D spend relative to and encourage commercialization of R&D Support deepening of component manufacture Widen distribution and after sales support in regional markets

Thank you!