Dti welcomes launch of Toyota plant

Department of Trade and Industry (dti) Minister Rob Davies has welcomed the launch of Toyota’s Quantum Ses’fikile Complete Knock Down (CKD) plant.

“As government, we want to convey our support to the Toyota South Africa motor company on this R476 million project to migrate your production process to CKD. This is a step in the right direction and supports our Industrial Policy Action Plan (IPAP) 2015,” said the Minister.

Speaking at the launch on Monday, Minister Davies said it took place at a time when the automotive sector industrial policy instruments have supported investments of approximately R24.5 billion since the launch of the Automotive Production and Development Programme (APDP) in January 2013 with further investments expected in the near future.

Minister Davies said the country’s industrial policy work is aimed at providing support to the automotive industry towards deepening value-addition and improving the competitiveness of the domestic industry.

He said that the minibus industry in South Africa has for long been characterised by Complete Built Units (CBU) imports until 2011 when in partnership with industry and labour the (Semi Knock Down) SKD programme was formulated.

The SKD programme was a temporary or bridging policy measure to facilitate the re-establishment of the minibus vehicle assembly in South Africa with support for SKD operations being for the period 2011 ending on 30 April 2015. This SKD programme afforded the minibus assembly industry reasonable time to plan their investments for the migration to full CKD operation.

“I am happy today that we have reached that milestone and this event today is testimony of what is possible when we work together in an integrated and solutions based manner,” explained the Minister.

In 2012, the People Carriers Automotive Investment Scheme (P- AIS) was established as a support measure to the SKD programme and later to the planned CKD programme.

P-AIS is a sub-component of the Automotive Investment Scheme (AIS), an incentive designed to grow and develop the automotive sector through investment in new or replacement models and components that will increase plant production volumes, sustain employment and strengthen the automotive value chain.

The P-AIS provides a non-taxable cash grant of between 20% and 35% of the value of qualifying investment in productive assets approved by the dti.

Since inception in 2012, this support scheme has approved three projects in the mini bus assembly industry to the tune of approximately R158 million supporting 680 direct jobs.

“We anticipate a growth in both investment and employment with the new CKD dispensation both at mini bus assembly as well as in the supply chain. This intervention is part of broader policy support programme for the industry commonly referred to as the Automotive Production and Development Programme (APDP).”

The APDP is aimed at creating an environment that will enable the domestic industry to significantly grow production volumes as well as local value addition leading to the creation of additional employment opportunities across the value chain, in line with Vision 2020 that aims to double of local vehicle production and broadening and deepening of component manufacture by the year 2020.

The Minister said that transformation of the economy remains a key challenge in the country.

“Our industrialisation path would be a failure if the historically disadvantaged people are not part of this process. We view this sector as one of our real potential agents to changing the status quo. We would engage more closely with industry to establish common ground on transformation including the work on the promotion of black industrialists.” –