High-level announcement on MIDP imminent

THE MOTOR Industry Development programme (MIDP) will move away from export incentives in its revised form, according to Nimrod Zalk, the department’s chief director industrial policy, enterprise and industry development. Zalk said recently that subsidies linked directly to exports or local content would be viewed as “redlight subsidies” by the World Trade Organisation (WTO). Australia has already used these regulations to successfully remove MIDP credits from exports of vehicle leather. Zalk declined to give further details on the planned changes because a “high-level announcement” on the architecture of the programme would be made later this month by trade and industry minister Mandisi Mpahlwa. It would be followed by a more detailed announcement in June on the revised MIDP. Local vehicle and component manufacturers have repeatedly warned that some form of support is needed to retain the industry in this country by countering the high logistics costs and distance from the primary global markets. Africa as a whole accounts for about 1 % of new vehicle sales around the world.