April is crunch month for MIDP review

Cost benefit analysis will precede roll-out
ALAN PEAT
THE REVIEW of the Motor Industry Development Programme (MIDP) by Blueprint International, the management consultants appointed by the department of trade and industry (dti), is due to be submitted to the minister at the end of April, according to Nico Vermeulen, director of the National Association of Automobile Manufacturers of SA (Naamsa). The objective of the review, initiated on May 1 last year, is to strengthen and modernise the MIDP, said the department, and ensure that the SA auto industry continues to enhance its already significant contribution to the economy by continuously improving its capacity to compete globally in a sustainable manner, and over the long-term. The future success of SA’s booming export trade in motor vehicles and components is highly dependent on what happens to the MIDP, according to Norman Lamprecht, executive manager of Naamsa and head of its automotive industry export council (AIEC). “SA automotive exports only became significant from 1995,” he told FTW, “when the MIDP was implemented. This structural adjustment programme provided an incentive to export by enabling import duties to be reduced through export credits.” So the main challenge of the moment, he added, is basically the MIDP extension and policy certainty. “For the motor vehicle manufacturers to invest in new generation models and remain in SA they need attractive incentives and support under the MIDP,” Lamprecht said. But, while the initial report is close to being ready, it’s difficult to be precise about when the announcement of the revised MIDP will be made. Vermeulen added. “After presentation,” he said, “it will still have to be studied by government – and after this the minister of trade and industry has ordered that a cost-benefit analysis must be completed before the MIDP is rolled out.” The present MIDP lasts until 2009.