The Minister of Trade and Industry, Dr Rob Davies, has approved the newly-revised guidelines for the Automotive Investment Scheme (AIS) and the People-carrier Automotive Investment Scheme (P-AIS).

According to Minister Davies, the revision of the guidelines is the result of consultative engagements which the Department of Trade and Industry (the dti) held with stakeholders in the automotive sector.

“During these sessions, the department received feedback indicating that many companies were looking at business maintenance and stability strategies as opposed to investment growth due to the levels of investment amongst automotive suppliers especially as the economic crisis post-2009 placed a strain on companies’ expansion plans,” says Minister Davies.

The amended AIS guidelines provide clarity on the non-taxability of the grant as well as on the eligibility of tooling companies to apply for the same benefits as component manufacturers under the scheme.

“Empowerment is now included as part of the economic benefit criteria and a clearer description of Research and Development requirements has been provided. The guidelines also make provision for increased support for component manufacturers with the grant increasing to between 25% and 35% of the value of qualifying investment in productive assets approved by the dti,” adds Minister Davies.

The amended guidelines also provide relaxed and more inclusive requirements for strengthening the supply chain criteria, the introduction of support towards enterprise level competitiveness improvement costs for component manufacturers, and accelerated grant disbursements for component manufactures on a 40:30:30 split are also new provisions included in the guidelines.

The P-AIS guidelines have been amended to align them to the revised AIS guidelines specifically on conditions applicable to competitiveness improvements, administrative requirements and increased grant support applicable to component manufacturers and tool making companies.

The P-AIS, a sub-component of the AIS has to date approved two applications both of which were Original Equipment Manufacturers (OEMs). The total incentive approved is R26, 1 million and a total of 191 jobs have been created in this sector.

The AIS is an incentive that aims to grow and develop the automotive sector and has been administered by the dti from July 2009.  As in March 2014, 195 projects were approved with the total incentive value of R6.2 billion of which R4.8 billion were Original Equipment Manufacturers (OEMs) and 177 for Component Manufacturers (CMs) valued at R1.3 billion. A total of 46 373 jobs were sustained and 9 850 created as a result of the investments by the approved companies and the incentive disbursed.

Issued by: The Department of Trade and Industry