South Africa to end support for assembly of cars from imported kits — TimesLIVE

The South African government will gradually end support for carmakers that import nearly complete vehicles for assembly from imported kits. Minister of Trade, Industry and Competition Parks Tau said this during South African Auto Week, TimesLIVE reports.

This concerns so-called SKD, or semi knocked-down, assembly: vehicle bodies and most components are imported into the country as kits and then assembled locally. According to Tau, existing facilities of this type will gradually be excluded from the support policy, while new enterprises will not receive such assistance.

Course toward local production

South African authorities want to encourage manufacturers to deepen the localisation of vehicle production and procure components within the country. South Africa’s Automotive Masterplan provides for increasing the share of local components from the current average of 38% to 60%, doubling employment in the industry and raising the country’s share of global vehicle production to 1% by 2035.

The changes will not apply to medium and heavy commercial vehicles. At the same time, authorities plan to tighten the legal definition of full CKD production, under which a vehicle is assembled from scratch using locally sourced parts.

More current news is available on the UA.News Telegram channel Telegram.

Review of the incentive system

The government is reviewing the Automotive Production and Development Programme, which is an incentive system for the industry. The review involves the industry association Naamsa, the component manufacturers’ association Naacam and organised labour.

Tau also said he would instruct the International Trade Administration Commission of South Africa to conduct an investigation into possible additional support for the body-on-frame light commercial vehicle segment, including pickups. A final decision will be made after this investigation. According to him, any additional protection must be accompanied by commitments on production, localisation, employment, transformation, exports and investment.

Earlier, BMW Group South Africa head Peter van Binsbergen called for closing what he described as a loophole for SKD manufacturers. Toyota South Africa Motors CEO Andrew Kirby also advocated a gradual phase-out of SKD assembly and strengthening the competitiveness of CKD production.