Minister of Trade, Industry and Competition, Parks Tau, applauded the strides made in South Africa’s automotive sector, thanks to critical incentives and policy frameworks provided by the Automotive Production and Development Programme (APDP). Speaking at the South Africa Auto Week in Cape Town, Tau explained his views on the role of these initiatives in attracting investment, catalysing innovation, and generating employment.
Minister Parks Tau applauded the resillience of the SA auto industry
Tau was quick to mention the impact of the Automotive Investment Scheme (AIS), which has disbursed R20.7bn to component manufacturers and OEMs since its inception in 2011.
“AIS funding to over 150 projects has resulted in an investment of over R76bn from the 2016/17 financial year to September 2024, generating a simple investment multiplier of five,” he said.
“This means that for every R1 of incentive spending, R5 of investment was spent by the project…the average grant disbursed was 20% of the total investment generated by the project.”
Tau also pointed to the transformative reach of AIS, mentioning that half of the R15.2bn disbursed was allocated to projects outside the five main metros, contributing to spatial transformation.
However, he acknowledged the need for more deliberate efforts in promoting ownership diversity within the sector.
“In terms of ownership, R227m, which is one percent of AIS funding, was accessed by black-owned projects, and two percent, amounting to R242m, was accessed by SMEs, R3m by youth-owned, and R7.9m by women-owned projects,” he said
“This shows that a more deliberate approach to transformation is required in the sector. We are, however, aware that we can do more.”
Building infrastructure
During the same event, Deputy Minister of Trade, Industry and Competition, Andrew Whitfield, participated in a panel discussion on infrastructure investment.
Whitfield spoke of the importance of infrastructure development as outlined in the 2024 Government of National Unity (GNU) statement of intent.
“The fact that we have the Presidential National Logistics Crisis Committee (NLCC), established by the South African Government to address the country’s transport and logistics indicates and recognises that we have a crisis of infrastructure in the country,” he said.
“South Africa has the skills and talent to resolve these challenges, but the skills and talent cannot exist in silos. We all need to work together to unlock these challenges.”
Core mission
He further highlighted the DTIC’s core mission through the GNU to facilitate business growth and job creation.
“We also need to heed President Ramaphosa’s instruction to cut red tape and produce key performance indicators that will drive the plan to make it easier for businesses to do business, grow and create jobs,” noted Whitfield.
He concluded by stressing the urgency of addressing South Africa’s unemployment crisis and unlocking the country’s infrastructure potential.
