The government is proposing car makers, including Toyota, Ford and BMW, more than double production in return for tax breaks so generous the companies can ship the cars to Europe.
The automotive industry accounts for about 7% of SA’s GDP and has been one of the few highlights of a period of sluggish economic growth, according to the National Association of Automobile Manufacturers of SA (Naamsa).
This can be put down to a state-incentive programme that expires at the end of 2020, which both the car makers and the Minister of Trade and Industry Rob Davies are keen to extend for another 15 years.
At stake is a potential reversal of a steady flow of new investment by car makers. BMW has spent more than R6bn on a plant in Rosslyn, north of Pretoria, and last month started production of the X3 SUV at the site, the first time it’s been made outside the US. Volkswagen (VW) and Nissan both announced major expansion plans in 2015, while China’s Beijing Automotive International Corporation (BAIC) is constructing an R11bn facility in Port Elizabeth.
