Auto and Motor

MIDP gets Cabinet thumbs up!Woody Aroun

On September 3 2008 the Department of Trade and Industry (DTI) released the long awaited Motor Industries Development Programme (MIDP) as part of its National Industrial Policy Framework (NIPF) and 2007/8 Industrial Policy Action Plan (IPAP).

Following Cabinet’s approval of the new MIDP, Minister Mandisi Mpahlwa of DTI is of the view that the “long-term development of the sector will be achieved by doubling production to 1.2 million vehicles by 2020 with associated deepening of the local components industry”.

In August 2008 Numsa submitted its proposals on a range of issues relevant to the MIDP. In its submission Numsa emphasized the need to:* substantially increase tariffs (80%) on imported vehicles, * place restrictions on the number of vehicles and tyres imported into the country, * protect and create new jobs, * increase local content, * avoid further reduction of vehicle platforms and * channel additional resources to make up for short time and lay-offs.

Numsa also argued that the issue of ownership and Broad Based Black Economic Empowerment be placed firmly on the agenda between the DTI and the union.

How does the revised document compare with the submissions made by NUMSA? For starters the newly released MIDP document has been crafted to meet the requirements of the World Trade Organisation (WTO):

In his communiqué the Minister went on to say that “the revised MIDP would therefore seek to provide industry with a reasonable level of support in a market neutral manner (that is, it cannot be an export incentive anymore as this might be inconsistent with WTO, therefore there will be no discrimination for products sold domestically and those exported)”.

On tariffs the revised MIDP recommends that the current rate for 2012 will be 25% for CBU (Completely Built Units) and 20% for CKD (Completely Knocked Down) components.

These rates will continue to apply from 2013-2020. In its submission Numsa proposed shifting the tariff back to 80% with further restrictions on the number of imported vehicles and tyres that are currently flooding the country.

According to an article that appeared in an online version of Engineering News (September 4 2008) the President of the National Association of Automotive Component and Allied Manufacturers (Naacam) indicated that he “was, however, not entirely impressed with the 25% tariff freeze on vehicles imports from 2013 to 2020, arguing that it was simply too low to stem the tide of importation and was also lower than the protection levels enjoyed by a number of South Africa's auto-industry peers.

It is understood, for instance, that Brazil has tariff protection of 35%”. Apart from the issue of tariffs to protect the local industry, the revised document is taking a 'carrot' approach by offering incentives for the automotive industry if they:* assemble locally* produce locally and* invest in the expansion of local automotive manufacturing.

It hopes that with these 'carrots' the private sector will increase local content and pump up its production volumes. However it is dangling no carrots to tempt the sector to speed up transformation, nor encourage skills acquisition and training.

The MIDP also fails to provide the sort of leverage that the union wants on issues such as increased tariffs, short-time and lay-offs and job creation and employment security. Above all the union believes that the new MIDP should play an interactive and complimentary role in propping up a badly needed transport system for the country.

Critical issues around ownership still need to be ironed out, but the DTI is hopeful that these and other issues will be addressed through a Customized Sector Programme (CSP) for the automotive sector.

Numsa gives it a thumbs-down!

What Numsa wanted:

What the DTI has decided on:

* increase tariffs to 80% on imported vehicles and place restrictions on the number of vehicles and tyres imported into the country

* tariffs set at 25% for CBU (Completely Built Units) and 20% for CKD (completely knocked down components)* no restrictions on what is imported into the country

* protect and create new jobs

* DTI hopes that the new incentives will encourage the industry to invest and expand local production and so create new jobs

* increase local content

* the MIDP will offer incentives to the industry if inputs are produced locally

* avoid further reduction of vehicle platforms

* no specific measures to safeguard this

* channel additional resources to make up for short time and lay-offs.

* no specific measures to safeguard this

* MIDP should support an ailing and unsafe public transport system

* no specific measures to encourage this

* more investment in skills development and skills and technology transfer across continents

* no specific measures to encourage this

* more BBBEE

* left up to individual companies to implement

I-MIDP ayinakho ukukhathazeka kwe-NumsaINumsa iphoxekile ngezinye izinto zoHlelo Lwentuthuko Yezimboni Zezimoto olubukeziwe lukahulumeni (Motor Industriees Development Programme (MIDP), uhlelo oluzama ukusiza ingxenye yezimoto.

INumsa ikhathazekile ngokuthi i-MIDP ayihambi ibanga elanele ukuqinisekisa ukuthi imisebenzi iyandiswa futhi iyavikelwa. Iyakhathazeka futhi ngemali eshiwo i-MIDP yokukhokhela izimoto ezivela kwamanye amazwe kanye nezingxenye ukuthi iphezulu ngokwanele yini ukuze kumiswe ukugcwalisa imakethe yethu ngezimoto ezivela kwamanye amazwe.

Ontwikkelingsplan vir die Motorbedryf (MIDP) spreek nie Numsa se kwellinge aan nieNumsa is teleurgesteld met sommige aspekte van die regering se hersiene Ontwikkelingsplan vir die Motorbedryf (MIDP), die program wat daarop gemik is om die motorbedryf aan te help.

Numsa is besorgd dat die MIDP nie ver genoeg gaan daarin om te verseker dat werksgeleenthede uitgebrei word en beveilig word nie. Die unie is ook bekommerd daaroor dat invoertariewe wat die MIDP instel ten opsigte van ingevoerde motors en onderdele nie hoog genoeg is om te verhoed dat ons markte met invoere oorstroom word nie.

MIDP ha e tsotelle matshwenyeho a NumsaNumsa e nyahame hampe ka dintlha tse ding tse lekotsweng botjha tsa mmuso tse mabapi le Lenaneo la Ntshetsopele ya Indasteri ya Makoloi e leng Motor Industries Development Programme (MIDP), lenaneo le lekang ho thusa mokgeng wa makoloi.

Numsa e tshwenyehile haholo ha e le mona MIDP e sa etse ka matla ho netefatsa hore mesebetsi e ya atoloswa hape e sireletsehile.

E tshwenyehile hape le ka ditefiso tseo MIDP e di behileng makoloing a tswang ka ntle mme le dikarolo ha di hodimo ha kaalo bakeng sa ho thibela phallelo e hodimo ya ditswantle mmarakeng wa rona.


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