South Africa plans to phase out its support for car plants that assemble nearly complete imported vehicles, Minister of Trade and Industry Parks Tau announced in Durban on Thursday, 15 October. The government wants manufacturing to be more firmly rooted in the country.
The scheme targets so-called SKD operations, in which large sets arrive already assembled before the final assembly stages. New facilities of this type will no longer benefit from automotive policy support. Medium and heavy commercial vehicles are excluded from this approach, the ministry said.
The authorities also want to strengthen the legal definition of completely knocked-down, or CKD, manufacturing. This production involves more local parts than SKD assembly, according to Engineering News.
Parks Tau also announced that he will ask the International Trade Commission, ITAC, to study the competitiveness of light commercial vehicles with separate chassis, including pick-ups. Any additional protection should be linked to manufacturers' commitments on production, jobs, investment and exports, according to the ministry.
The reform is part of the revision of the Automotive Production and Development Programme, APDP2, carried out with the automotive council Naamsa, the components manufacturers' association Naacam and the trade unions. The programme, which took effect in July 2021, remains the sector's main industrial support framework, the government agency SAnews notes.
The South African automotive plan sets a target of 60% local content by 2035, compared with a current average of 38%, and aims to double employment in the sector, according to the objectives cited by Reuters.