Naamsa welcomes state commitment to auto industry

THE NATIONAL Association of Automobile Manufacturers of South Africa (Naamsa) believes the national budget tabled by finance minister Trevor Manuel in February this year shows that government is continuing to support auto manufacturing in the country. “Naamsa welcomed the Minister’s emphasis on supply-side measures to boost the productive capacity of the South African economy which would support employment stability and growth,” said Naamsa president, Dr Johan van Zyl. Manuel’s budget follows President Thabo Mbeki’s state of the nation address at the beginning of February, in which he announced that Government had budgeted R5-billion in tax incentives over the next three years to promote industrial development. A further R2.3-billion has been budgeted for “industrial policy initiatives” as part of the Industrial Policy Action Plan (IPAP). According to the Department of Trade and Industry (DTI), the Action Plan is designed to facilitate fast-track implementation of development in the four lead sectors of the South African economy – capital/transport equipment and metals; automotives and components; chemicals, plastic fabrication and pharmaceuticals; and forestry, pulp and paper, and furniture. “I would like to emphasise that we remain determined to support the automotive sector and will therefore ensure that the support given to this sector through the Motor Industry Development Programme is maintained,” said Mbeki. Government’s focus on the auto industry is understandable as it contributed 7.53% to the country’s 2006 gross domestic product (GDP). Naamsa figures show that the industry is South Africa’s leading manufacturing sector and the largest attractor of foreign direct investment in manufacturing. Naamsa says the measures announced by Manuel “would support investment and economic development and were expected to be well received by the business community generally”. On going green, Van Zyl said Naamsa had taken note of the proposed environmental tax reform measures to be implemented from 2009 R5-bn budgeted in tax incentives over next three years onwards and particularly the possibility of vehicle taxes aimed at promoting fuel efficiency. “The automotive industry planned to engage National Treasury on these issues.”