The 2020 target of producing 1.2 million vehicles per year under the Automotive Production and Development Programme (APDP), is unlikely to be achieved, according to the Minister of Trade and Industry, Dr Rob Davies.
He was reacting to the findings of the Automotive Production and Development Programme (APDP) review, published last week, noting that this was due to a variety of reasons such as the fact that the global economy was still recovering from the effects of the 2008/9 financial crisis.
“Secondly, it will also be extremely difficult to achieve significant expansion and deepening of the local supplier base under the prevailing economic conditions,” said Davies, adding that government remained committed to further development of the automotive industry in line with the National Industrial Policy Framework (NIPF) and the Industrial Policy Action Plan (IPAP).
In an effort to sustain and grow the industry whilst steering it towards the APDP vision of high-volume vehicle production, the following proposals will be implemented:
1. The volume threshold for vehicle production will be reduced from 50 000 units to 10 000 units per annum in order to allow new entrants into the local industry from 2016.
2. The Volume Assembly Allowance (VAA) will be offered on a sliding scale based on volume commencing at 10% for 10 000 units to 18% at 50 000 units from January 2016.
3. A suitable capital incentive (AIS) level will be provided for new entrants at the less than 50 000 pa threshold (details will be captured in guidelines that should be finalised by April 2016).
