Automotive Investment Scheme
The Automotive Investment Scheme is an incentive designed to grow and develop the automotive sector through investment in new and/or replacement models and components that will increase plant production volumes, sustain employment and/or strengthen the automotive value chain.
- Grow South African vehicle production to 1% of global output;
- Increase local content in South African assembled vehicles as envisaged in the SAAM;
- Double total employment in the automotive value chain;
- Transformation of the South African automotive industry value chain; and
- Deepen value addition within South African automotive value chains.
The scheme provides for a non-taxable reimbursable cash grant as follows:
- Twenty percent (20%) of the value of qualifying investment in productive assets by original equipment manufacturers; and
- Twenty five percent (25%) of the value of qualifying investment in productive assets by component manufactures and tooling manufacturers as approved by the Department.
- Notwithstanding the maximum investment, the maximum incentive amount will be guided by funds at hand and the investment proposition.
Objectives of incentive scheme
- Strengthen and diversify the sector through investment in a new and/or replacement models and components.
- Increase plant production volumes.
- Sustain employment and/or strengthen the automotive value chain.
The Automotive Investment Scheme is a non-taxable, reimbursable cash grant in respect of qualifying investment in productive assets used in South African operations by:
— Original equipment manufacturers (OEMs) with a qualifying investment greater
than R50 million and a minimum production volume of 50 000 units per annum
per plant (20% grant);
— Automotive component manufacturers (CMs) with a qualifying investment greater
than R2 million and a local or international OEM supply chain turnover of at least
25% of total entity turnover or R10m in OEM supply chain invoicing per annum;
OR a contract has been awarded of above R2 million by an entity with a turnover
of at least R50 million for the manufacture of components to supply directly into
an automotive investment project locally and/or internationally (25% grant);
— Automotive tooling manufacturers (25% grant);
— New energy vehicle (NEV) manufacturers (30% grant); and
— Energy efficient (EE) vehicle manufacturers (30% grant).
Should you be interested in applying for the business grant, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Automotive Investment Scheme.