Erwin extends motor industry incentive scheme

MIDP to run until 2012 Ed Richardson GOVERNMENT HAS decided to extend the Motor Industry Development Plan (MIDP) to 2012. That's the word from trade and industry minister Alec Erwin who made the announcement at the recent Automechanika Trade Fair 2002 in Frankfurt, Germany. The MIDP has been the driving force behind the export successes of both vehicle and component manufacturers. The announcement is expected to unlock more direct investment into the South African automotive industry. Through the MIDP, original equipment manufacturers can offset import duties of completely built up vehicles against exports of components and passenger cars. According to official customs figures, South African automotive component exports rose by over 47% from 2000 to 2001, and continue to accelerate. Fuelling the rise is a combination of competitive pricing, world-class quality and delivery, and incentives through the country's Motor Industry Development Programme (MIDP). By far the majority of exports Ð 70.5% Ð went to the European Union, followed by Nafta, (12.1%) and the rest of Africa (7.1%). Further growth is expected, particularly once the global auto market starts improving. Erwin said the finer details regarding the programme's regulations would be determined after consultations between government and industry stakeholders. He told delegates that South Africa had a strategy to make itself a "competitive world economy" by focusing on lowering tariffs. Adding to the cost advantage for investors, South Africa had an abundance of efficient energy suppliers, and its strength in information and communication technology enabled it to compete internationally. "We see ourselves as an important platform with the capacity to produce high-quality goods," Erwin said.