Auto incentive plan 'by year-end'
18 September 2007
South Africa's automotive sector has a significant role to play in boosting the country's economic growth rate, President Thabo Mbeki said last week, vowing that the government would complete the review of its Motor Industry Development Programme (MIDP) by the end of the year.
"With its 7.5% contribution to the country's gross domestic product (GDP) in 2006, it is self-evident that this sector will play a significant role in ensuring that South Africa achieves the higher rate of economic growth we need," Mbeki said.
He was speaking at the opening of DaimlerChrysler South Africa's new plant for the production of the luxurious Mercedes Benz W 204 C-Class series in East London.
The government's review of the MIDP, an incentive scheme that has helped attract significant investment in South Africa's automotive industry, began in 2005 and was originally due to be completed in mid-2008.
The review, Mbeki explained, sought to evaluate the performance of the industry against the MIDP's stated objectives - such as making vehicles more affordable, growing exports, rationalising production platforms and growing employment.
At the same time, the review aimed to ensure that South Africa's automotive industry remained globally competitive and was integrated into the global value chain, Mbeki said.
He emphasised, however, that the government and the industry had to ensure that they did not expose themselves to challenges in terms of World Trade Organisation rules and agreements.
"Our government will therefore honour its obligation consistently to engage all our relevant social partners to produce an agreement that meets our common desire to ensure the further and rapid expansion of the automobile sector."
SouthAfrica.info reporter and BuaNews
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