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).